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  • General Election Manifestos : 1979 Conservative Party

    General Election Manifestos : 1979 Conservative Party

    The 1979 Conservative Party manifesto.

    Contents

    FOREWORD by The Rt. Hon. Margaret Thatcher

    1. OUR FIVE TASKS
    2. RESTORING THE BALANCE

    The control of inflation
    Better value for money
    Trade union reform
    1. Picketing
    2. The closed shop
    3. Wider participation
    Too many strikes
    Responsible pay bargaining

    3. A MORE PROSPEROUS COUNTRY

    Cutting income tax
    A property-owning democracy
    Industry, commerce and jobs
    Nationalisation
    Fair trade
    Small businesses
    Energy
    Agriculture
    Fishing
    Animal welfare

    4. THE RULE OF LAW

    The fight against crime
    Deterring the criminal
    Immigration and race relations
    The supremacy of Parliament
    Northern Ireland

    5. HELPING THE FAMILY

    Homes of our own
    The sale of council houses
    Reviving the private rented sector
    Protecting the environment
    Standards in education
    Parents’ rights and responsibilities
    The arts
    Health and welfare
    Making sense of social security
    The elderly and the disabled

    6. A STRONG BRITAIN IN A FREE WORLD

    Improving our defences
    The European Community
    Africa and the Middle East
    Rhodesia
    Trade, aid and the Commonwealth

    7. A NEW BEGINNING


    Foreword

    FOR ME, THE HEART OF POLITICS is not political theory, it is people and how they want to live their lives.

    No one who has lived in this country during the last five years can fail to be aware of how the balance of our society has been increasingly tilted in favour of the State at the expense of individual freedom.

    This election may be the last chance we have to reverse that process, to restore the balance of power in favour of the people. It is therefore the most crucial election since the war.

    Together with the threat to freedom there has been a feeling of helplessness, that we are a once great nation that has somehow fallen behind and that it is too late now to turn things round.

    I don’t accept that. 1 believe we not only can, we must. This manifesto points the way.

    It contains no magic formula or lavish promises. It is not a recipe for an easy or a perfect life. But it sets out a broad framework for the recovery of our country, based not on dogma, but On reason, on common sense, above all on the liberty of the people under the law.

    The things we have in common as a nation far outnumber those that set us apart.

    It is in that spirit that I commend to you this manifesto.

    Margaret Thatcher


    I. Our five tasks

    THIS ELECTION is about the future of Britain – a great country which seems to have lost its way. It is a country rich in natural resources, in coal, oil, gas and fertile farmlands. It is rich, too, in human resources, with professional and managerial skills of the highest calibre, with great industries and firms whose workers can be the equal of any in the world We are the inheritors of a long tradition of parliamentary democracy and the rule of law.

    Yet today, this country is faced with its most serious problems since the Second World War. What has happened to our country, to the values we used to share, to the success and prosperity we once took for granted?

    During the industrial strife of last winter, confidence, self-respect, common sense, and even our sense of common humanity were shaken. At times this society seemed on the brink of disintegration.

    Some of the reasons for our difficulties today are complex and go back many years. Others are more simple and more recent. We do not lay all the blame on the Labour Party: but Labour have been in power for most of the last fifteen years and cannot escape the major responsibility.

    They have made things worse in three ways. First, by practising the politics of envy and by actively discouraging the creation of wealth, they have set one group against another in an often bitter struggle to gain a larger share of a weak economy.

    Second, by enlarging the role of the State and diminishing the role of the individual, they have crippled the enterprise and effort on which a prosperous country with improving social services depends.

    Third, by heaping privilege without responsibility on the trade unions, Labour have given a minority of extremists the power to abuse individual liberties and to thwart Britain’s chances of success. One result is that the trade union movement, which sprang from a deep and genuine fellow-feeling for the brotherhood of man, is today more distrusted and feared than ever before.

    It is not just that Labour have governed Britain badly. They have reached a dead-end. The very nature of their Party now

    prevents them from governing successfully in a free society and mixed economy.

    Divided against themselves; devoid of any policies except those which have led to and would worsen our present troubles; bound inescapably by ties of history, political dogma and financial dependence to a single powerful interest group, Labour have demonstrated yet again that they cannot speak and dare not act for the nation as a whole.

    Our country’s relative decline is not inevitable. We in the Conservative Party think we can reverse it, not because we think we have all the answers but because we think we have the one answer that matters most. We want to work with the grain of human nature, helping people to help themselves – and others. This is the way to restore that self-reliance and self-confidence which are the basis of personal responsibility and national success.

    Attempting to do too much, politicians have failed to do those things which should be done. This has damaged the country and the authority of government. We must concentrate on what should be the priorities for any government. They are set out in this manifesto.

    Those who look in these pages for lavish promises or detailed commitments on every subject will look in vain. We may be able to do more in the next five years than we indicate here. We believe we can. But the Conservative government’s first job will be to rebuild our economy and reunite a divided and disillusioned people.

    Our five tasks are:

    (i) To restore the health of our economic and social life, by controlling inflation and striking a fair balance between the rights and duties of the trade union movement.

    (2) To restore incentives so that hard work pays, success is rewarded and genuine new jobs are created in an expanding economy.

    (3) To uphold Parliament and the rule of law.

    (4) To support family life, by helping people to become home-owners, raising the standards of their children’s education, and concentrating welfare services on the effective support of the old, the sick, the disabled and those who are in real need.

    (5) To strengthen Britain’s defences and work with our allies to protect our interests in an increasingly threatening world.

    This is the strategy of the next Conservative government.

    2. Restoring the balance

    SOUND MONEY and a fair balance between the rights and obligations of unions, management and the community in which they work are essential to economic recovery. They should provide the stable conditions in which pay bargaining can take place as responsibly in Britain as it does in other countries.

    THE CONTROL OF INFLATION

    Under Labour prices have risen faster than at any peacetime period in the three centuries in which records have been kept, and inflation is now accelerating again. The pound today is worth less than half its 1974 value. On present form it would be halved in value yet again within eight years. Inflation on this scale has come near to destroying our political and social stability.

    To master inflation, proper monetary discipline is essential, with publicly stated targets for the rate of growth of the money supply. At the same time, a gradual reduction in the size of the Government’s borrowing requirement is also vital. This Government’s price controls have done nothing to prevent inflation, as is proved by the doubling of prices since they came to power. All the controls have achieved is a loss of jobs and a reduction in consumer choice.

    The State takes too much of the nation’s income; its share must be steadily reduced. When it spends and borrows too much, taxes, interest rates, prices and unemployment rise so that in the long run there is less wealth with which to improve Our standard of living and our social services.

    BETTER VALUE FOR MONEY

    Any future government which sets out honestly to reduce inflation and taxation will have to make substantial economies, and there should be no doubt about our intention to do so. We do not pretend that every saving can be made without change or complaint; but if the Government does not economise the sacrifices required of ordinary people will be all the greater.

    Important savings can be made in several ways. We will scrap expensive Socialist programmes, such as the nationalisation of building land. We shall reduce government intervention in industry and particularly that of the National Enterprise Board, whose borrowing powers are planned to reach £4.5 billion. We shall ensure that selective assistance to industry is not wasted, as it was in the case of Labour’s assistance to certain oil platform yards, on which over £20 million of public money was spent but no orders received.

    The reduction of waste, bureaucracy and over-government will also yield substantial savings. For example, we shall look for economies in the cost (about £1.2 billion) of running our tax and social security systems. By comparison with private industry, local direct labour schemes waste an estimated £400 million a year. Other examples of waste abound, such as the plan to spend £50 million to build another town hall in Southwark.

    TRADE UNION REFORM

    Free trade unions can only flourish in a free society. A strong and responsible trade union movement could play a big part in our economic recovery. We cannot go on, year after year, tearing ourselves apart in increasingly bitter and calamitous industrial disputes. In bringing about economic recovery, we should all be on the same side. Government and public, management and unions, employers and employees, all have a common interest in raising productivity and profits, thus increasing investment and employment, and improving real living standards for everyone in a high-productivity, high-wage, low-tax economy. Yet at the moment we have the reverse an economy in which the Government has to hold wages down to try to make us competitive with other countries where higher real wages are paid for by higher output.

    The crippling industrial disruption which hit Britain last winter had several causes: years with no growth in production; rigid pay control; high marginal rates of taxation; and the extension of trade union power and privileges. Between 1974 and 1976, Labour enacted a ‘militants’ charter’ of trade union legislation. It tilted the balance of power in bargaining throughout industry away from responsible management and towards unions, and sometimes towards unofficial groups of workers acting in defiance of their official union leadership.

    We propose three changes which must be made at once. Although the Government refused our offer of support to carry them through the House of Commons last January, our proposals command general assent inside and outside the trade union movement.

    I. PICKETING

    Workers involved in a dispute have a right to try peacefully to persuade others to support them by picketing, but we believe that right should be limited to those in dispute picketing at their own place of work. In the last few years some of the picketing we have witnessed has gone much too far. Violence, intimidation and obstruction cannot be tolerated. We shall ensure that the protection of the law is available to those not concerned in the dispute but who at present can suffer severely from secondary action (picketing, blacking and blockading). This means an immediate review of the existing law on immunities in the light of recent decisions, followed by such amendment as may be appropriate of the 1976 legislation in this field. We shall also make any further changes that are necessary so that a citizen’s right to work and go about his or her lawful business free from intimidation or obstruction is guaranteed.

    2. THE CLOSED SHOP

    Labour’s strengthening of the closed shop has made picketing a more objectionable weapon. In some disputes, pickets have threatened other workers with the withdrawal of their union cards if they refuse to co-operate. No union card can mean no job. So the law must be changed. People arbitrarily excluded or expelled from any union must be given the right of appeal to a court of law. Existing employees and those with personal conviction must be adequately protected, and if they lose their jobs as a result of a closed shop they must be entitled to ample compensation.

    In addition, all agreements for a closed shop must be drawn up in line with the best practice followed at present and only if an overwhelming majority of the workers involved vote for it by secret ballot. We shall therefore propose a statutory code under Section 6 of the 1975 Employment Protection Act. We will not permit a closed shop in the non-industrial civil service and will resist further moves towards it in the newspaper industry. We are also committed to an enquiry into the activities of the SLADE union, which have done so much to bring trade unionism into disrepute.

    3. WIDER PARTICIPATION

    Too often trade unions are dominated by a handful of extremists who do not reflect the common-sense views of most union members.

    Wider use of secret ballots for decision-making throughout the trade union movement should be given every encouragement. We will therefore provide public funds for postal ballots for union elections and other important issues. Every trade unionist should be free to record his decisions as every voter has done for a hundred years in parliamentary elections, without others watching and taking note.

    We welcome closer involvement of workers, whether trade unionists or not, in the decisions that affect them at their place of work. It would be wrong to impose by law a system of participation in every company. It would be equally wrong to use the pretext of encouraging genuine worker involvement in order simply to increase union power or facilitate union control of pension funds.

    TOO MANY STRIKES

    Further changes may be needed to encourage people to behave responsibly and keep the bargains they make at work. Many deficiencies of British industrial relations are without foreign parallel. Strikes are too often a weapon of first rather than last resort. One cause is the financial treatment of strikers and their families. In reviewing the position, therefore, we shall ensure that unions bear their fair share of the cost of supporting those of their members who are on strike.

    Labour claim that industrial relations in Britain cannot be improved by changing the law. We disagree. If the law can be used to confer privileges, it can and should also be used to establish obligations. We cannot allow a repetition of the behaviour that we saw outside too many of our factories and hospitals last winter.

    RESPONSIBLE PAY BARGAINING

    Labour’s approach to industrial relations and their disastrous economic policies have made realistic and responsible pay bargaining almost impossible. After encouraging the ‘social contract’ chaos of 1974-5, they tried to impose responsibility by the prolonged and rigid control of incomes. This policy collapsed last winter as we warned that it would. The Labour government then came full circle with the announcement of yet another ‘social contract’ with the unions. For five years now, the road to ruin has been paved with such exchanges of promises between the Labour government and the unions.

    To restore responsible pay bargaining, we must all start by recognising that Britain is a low-paid country because we have steadily become less efficient, less productive, less reliable and less competitive. Under this Government, we have more than doubled our pay but actually produced less in manufacturing industry. It will do yet further harm to go on printing money to pay ourselves more without first earning more. That would lead to even higher prices, fewer jobs and falling living standards.

    The return to responsibility will not be easy. It requires that people keep more of what they earn; that effort and skill earn larger rewards; and that the State leaves more resources for industry. There should also be more open and informed discussion of the Government’s economic objectives (as happens, for example, in Germany and other countries) so that there is wider understanding of the consequences of unrealistic bargaining and industrial action.

    Pay bargaining in the private sector should be left to the companies and workers concerned. At the end of the day, no one should or can protect them from the results of the agreements they make.

    Different considerations apply to some extent to the public sector, of whose seven million workers the Government directly employs only a minority. In the great public corporations, pay bargaining should be governed, as in private ones, by what each can afford. There can be no question of subsidising excessive pay deals.

    Pay bargaining in central and local government, and other services such as health and education, must take place within the limits of what the taxpayer and ratepayer can afford. It is conducted under a variety of arrangements, some of long standing, such as pay research. In consultation with the unions, we will reconcile these with the cash limits used to control public spending, and seek to conclude no-strike agreements in a few essential services. Bargaining must also be put on a sounder economic footing, so that public sector wage settlements take full account of supply and demand amid differences between regions, manning levels, job security and pension arrangements.

    3. A more prosperous country

    LABOUR HAVE GONE to great lengths to try to conceal the damage they have done to the economy and to our prospects of economic expansion. Even in the depression of the 1930s the British economy progressed more than it has under this Labour government. Their favourite but totally false excuse is that their appalling record is all due to the oil crisis and the world-wide economic depression. Yet since the oil crisis, despite our coal, and gas and oil from the North Sea, prices and unemployment in Britain have risen by more than in almost any other major industrial country. And output has risen by less. With much poorer energy supplies than Britain, the others have nonetheless done much better because they have not had a Labour government or suffered from Labour’s mistakes.

    To become more prosperous, Britain must become more productive and the British people must be given more incentive.

    CUTTING INCOME TAX

    We shall cut income tax at all levels to reward hard work, responsibility and success; tackle the poverty trap; encourage saving and the wider ownership of property; simplify taxes – like VAT; and reduce tax bureaucracy.

    It is especially important to cut the absurdly high marginal rates of tax both at the bottom and top of the income scale. It must pay a man or woman significantly more to be in, rather than out of; work. Raising tax thresholds will let the low-paid out of the tax net altogether, and unemployment and short-term sickness benefit must be brought into the computation of annual income.

    The top rate of income tax should be cut to the European average and the higher tax bands widened. To encourage saving we will reduce the burden of the investment income surcharge. This will greatly help those pensioners who pay this additional tax on the income from their life-time savings, and who suffer so badly by comparison with members of occupational or inflation-proofed pension schemes.

    Growing North Sea oil revenues and reductions in Labour s public spending plans Will not be enough to pay for the income tax cuts the country needs. We must therefore be prepared to switch to some extent from taxes on earnings to taxes on spending. Value Added Tax does not apply, and will not be extended, to necessities like food, fuel, housing and transport. Moreover the levels of State pensions and other benefits take price rises into account.

    Labour’s extravagance and incompetence have once again imposed a heavy burden on ratepayers this year. But cutting income tax must take priority for the time being over abolition of the domestic rating system.

    A PROPERTY-OWNING DEMOCRACY

    Unlike Labour, we want more people to have the security and satisfaction of owning property Our proposals for encouraging home ownership are contained in Chapter 5.

    We reject Labour’s plan for a Wealth Tax. We shall deal with the most damaging features of the Capital Transfer and Capital Gains Taxes, and propose a simpler and less oppressive system of capital taxation in the longer term. We will expand and build on existing schemes for encouraging employee share-ownership and our tax policies generally will provide incentive to save and build up capital.

    INDUSTRY, COMMERCE AND JOBS

    Lower taxes on earnings and savings will encourage economic growth. But on their own they will not be enough to secure it.

    Profits are the foundation of a free enterprise economy. In Britain profits are still dangerously low. Price controls can prevent them from reaching a level adequate for the investment we need. In order to ensure effective competition and fair pricing policies, we will review the working of the Monopolies Commission, the Office of Fair Trading and the Price Commission, with the legislation which governs their activities.

    Too much emphasis has been placed on attempts to preserve existing jobs. We need to concentrate more on the creation of conditions in which new, more modern, more secure, better paid jobs come into existence. This is the best way of helping the unemployed and those threatened with the loss of their jobs in the future.

    Government strategies and plans cannot produce revival, nor can subsidies. Where it is in the national interest to help a firm in difficulties, such help must be temporary and tapered.

    We all hope that those firms which are at present being helped by the taxpayer will soon be able to succeed by themselves; but success or failure lies in their own hands.

    Of course, government can help to ease industrial change in those regions dependent on older, declining industries. We do not propose sudden, sharp changes in the measures now in force. However, there is a strong case for relating government assistance to projects more closely to the number of jobs they create.

    NATIONALISATION

    The British people strongly oppose Labour’s plans to nationalise yet more firms and industries such as building, banking, insurance, pharmaceuticals and road haulage. More nationalisation would further impoverish us and further undermine our freedom. We will offer to sell back to private ownership the recently nationalised aerospace and shipbuilding concerns, giving their employees the opportunity to purchase shares.

    We aim to sell shares in the National Freight Corporation to the general public in order to achieve substantial private investment in it. We will also relax the Traffic Commissioner licensing regulations to enable new bus and other services to develop-particularly in rural areas-and we will encourage new private operators.

    Even where Labour have not nationalised they interfere too much. We shall therefore amend the ‘975 Industry Act and restrict the powers of the National Enterprise Board solely to the administration of the Government’s temporary shareholdings, to be sold off as circumstances permit. We want to see those industries that remain nationalised running more successfully and we will therefore interfere less with their management and set them a clearer financial discipline in which to work.

    High productivity is the key to the future of industries like British Rail, where improvements would benefit both the work-force and passengers who have faced unprecedented fare increases over the last five years.

    FAIR TRADE

    Just as we reject nationalisation, so we are opposed to the other Socialist panacea-import controls. They would restrict consumer choice, raise prices and invite damaging retaliation against British goods overseas. We will vigorously oppose all kinds of dumping and other unfair foreign trade practices that undermine jobs at home.

    We fully support the renegotiated Multi-fibre Arrangement for textiles and will insist that it is monitored effectively and speedily. We also believe in a revised ‘safeguard’ clause under GATT, to give us a better defence against sudden and massive surges of imports that destroy jobs.

    SMALL BUSINESSES

    The creation of new jobs depends to a great extent on the success of smaller businesses. They have been especially hard hit under Labour. Our cuts in direct and capital taxation, the simplification of VAT and our general economic and industrial relations policies are the key to their future. We shall make planning restraints less rigid; reduce the number of official forms and make them simpler; provide safeguards against unfair competition from direct labour; review the new 714 Certificate system for subcontractors and review with representatives of the self-employed their National Insurance and pension position. We shall amend laws such as the Employment Protection Act where they damage smaller businesses-and larger ones too-and actually prevent the creation of jobs.

    We shall also undertake a thorough review of the enforcement procedures of Customs and Excise and the Inland Revenue, and introduce an easier regime for small firms in respect of company law and the disclosure of their affairs.

    ENERGY

    The development of our energy resources provides a challenge for both our nationalised industries and the private sector. Nowhere has private enterprise been more successful in creating jobs and wealth for the nation than in bringing North Sea oil and gas ashore. These benefits will be short-lived unless we pursue a vigorous policy for energy saving. Labour’s interference has discouraged investment and could cost Britain billions of pounds in lost revenue. We shall undertake a complete review of all the activities of the British National Oil Corporation as soon as we take office. We shall ensure that our oil tax and licensing policies encourage new production.

    We believe that a competitive and efficient coal industry has an important role in meeting energy demand, together with a proper contribution from nuclear power. All energy developments raise important environmental issues, and we shall ensure the fullest public participation in major new decisions.

    AGRICULTURE

    Our agricultural and food industries are as important and as efficient as any that we have. They make an immense contribution to our balance of payments; they provide jobs for millions of people and they sustain the economy of the countryside. Labour have seriously undermined the profitability of these industries, without protecting consumers against rising food prices which have more than doubled during their term of office. We must ensure that these industries have the means to keep abreast of those in other countries.

    We believe that radical changes in the operation of the Common Agricultural Policy (CAP) are necessary. We would, in particular, aim to devalue the Green Pound within the normal lifetime of a Parliament to a point which would enable our producers to compete on level terms with those in the rest of the Community. We will insist on a freeze in CAP prices for products in structural surplus. This should be maintained until the surpluses are eliminated. We could not entertain discriminatory proposals such as those which the Commission recently put forward for milk production.

    The Uplands are an important part of our agriculture. Those who live and work there should enjoy a reasonable standard of life.

    FISHING

    The Government’s failure to negotiate with our Community partners proper arrangements for fishing has left the industry in a state of uncertainty. The general adoption of 200-mile limits has fundamentally altered the situation which existed when the Treaty of Accession was negotiated. We would work for an agreement which recognised: first, that United Kingdom waters contained more fish than those of the rest of the Community countries put together; secondly, the loss of fishing opportunities experienced by our fishermen; thirdly, the rights of inshore fishermen; last, and perhaps most important of all, the need for effective measures to conserve fish stocks which would be policed by individual coastal states. In the absence of agreement, we would not hesitate to take the necessary measures on our own, but of course on a non-discriminatory basis.

    ANIMAL WELFARE

    The welfare of animals is an issue that concerns us all. There are problems in certain areas and we will act immediately where it is necessary. More specifically, we will give full support to the EEC proposals on the transportation of animals. We shall update the Brambell Report, the codes of welfare for farm animals, and the legislation on experiments on live animals. We shall also re-examine the rules and enforcement applying to the export of live animals and shall halt the export of cows and ewes recently calved and lambed.

    4. The rule of law

    THE MOST DISTURBING THREAT to our freedom and security is the growing disrespect for the rule of law. In government as in opposition, Labour have undermined it. Yet respect for the rule of law is the basis of a free and civilised life. We will restore it, re-establishing the supremacy of Parliament and giving the right priority to the fight against crime.

    THE FIGHT AGAINST CRIME

    The number of crimes in England and Wales is nearly half as much again as it was in 1973. The next Conservative government will spend more on fighting crime even while we economise elsewhere.

    Britain needs strong, efficient police forces with high morale. Improved pay and conditions will help Chief Constables to recruit up to necessary establishment levels. We will therefore implement in full the recommendations of the Edmund Davies Committee. The police need more time to detect crime. So we will ease the weight of traffic supervision duties and review cumbersome court procedures which waste police time. We will also review the traffic laws, including the totting-up procedure.

    DETERRING THE CRIMINAL

    Surer detection means surer deterrence. We also need better crime prevention measures and more flexible, more effective sentencing. For violent criminals and thugs really tough sentences are essential. But in other cases long prison terms are not always the best deterrent. So we want to see a wider variety of sentences available to the courts. We will therefore amend the 1961 Criminal Justice Act which limits prison sentences on young adult offenders, and revise the Children and Young Persons Act 1969 to give magistrates the power to make residential and secure care orders on juveniles.

    We need more compulsory attendance centres for hooligans at junior and senior levels. In certain detention centres we will experiment with a tougher regime as a short, sharp shock for young criminals. For certain types of offenders, we also support the greater use of community service orders, intermediate treatment and attendance centres. Unpaid fines and compensation orders are ineffective. Fines should be assessed to punish the offender within his means and then be backed by effective sanctions for non-payment.

    Many people advocate capital punishment for murder. This must remain a matter of conscience for Members of Parliament. But we will give the new House of Commons an early opportunity for a free vote on this issue.

    IMMIGRATION AND RACE RELATIONS

    The rights of all British citizens legally settled here are equal before the law whatever their race, colour or creed. And their opportunities ought to be equal too. The ethnic minorities have already made a valuable contribution to the life of our nation. But firm immigration control for the future is essential if we are to achieve good community relations. It will end persistent fears about levels of immigration and will remove from those settled, and in many cases born here, the label of ‘immigrant’.

    (i) We shall introduce a new British Nationality Act to define entitlement to British citizenship and to the right of abode in this country. It will not adversely affect the right of anyone now permanently settled here.

    (ii) We shall end the practice of allowing permanent settlement for those who come here for a temporary stay.

    (iii) We shall limit entry of parents, grandparents and children over 18 to a small number of urgent compassionate cases.

    (iv) We shall end the concession introduced by the Labour government in 1974 to husbands and male fiancés.

    (v) We shall severely restrict the issue of work permits.

    (vi) We shall introduce a Register of those Commonwealth wives and children entitled to entry for settlement under the 1971 Immigration Act.

    (vii) We shall then introduce a quota system, covering everyone outside the European Community, to control all entry for settlement.

    (viii) We shall take firm action against illegal immigrants and overstayers and help those immigrants who genuinely wish to leave this country-but there can be no question of compulsory repatriation.

    We will encourage the improvement of language training in schools and factories and of training facilities for the young unemployed in the ethnic communities. But these measures will achieve little without the effective control of immigration. That is essential for racial harmony in Britain today.

    THE SUPREMACY OF PARLIAMENT

    In recent years, Parliament has been weakened in two ways. First, outside groups have been allowed to usurp some of its democratic functions. Last winter, the Government permitted strike committees and pickets to take on powers and responsibilities which should have been discharged by Parliament and the police. Second, the traditional role of our legislature has suffered badly from the growth of government over the last quarter of a century.

    We will see that Parliament and no other body stands at the centre of the nation’s life and decisions, and we will seek to make it effective in its job of controlling the Executive.

    We sympathise with the approach of the all-party parliamentary committees which put forward proposals last year for improving the way the House of Commons legislates and scrutinises public spending and the work of government departments. We will give the new House of Commons an early chance of coming to a decision on these proposals.

    The public has rightly grown anxious about many constitutional matters in the last few years – partly because our opponents have proposed major constitutional changes for party political advantage. Now Labour want not merely to abolish the House of’ Lords but to put nothing in its place. This would be a most dangerous step. A strong Second Chamber is necessary not only to revise legislation but also to guarantee our constitution and liberties.

    It is not only the future of the Second Chamber which is at issue. We are committed to discussions about the future government of Scotland, and have put forward proposals for improved parliamentary control of administration in Wales. There are other important matters, such as a possible Bill of Rights, the use of referendums, and the relationship between Members of the European Parliament and Westminster, which we shall wish to discuss with all parties.

    NORTHERN IRELAND

    We shall maintain the Union of Great Britain and Northern Ireland in accordance with the wish of the majority in the Province. Its future still depends on the defeat of terrorism and the restoration of law and order. We shall continue with the help of the courage, resolution and restraint of the Security Forces-to give it the highest priority. There will be no amnesty for convicted terrorists.

    In the absence of devolved government, we will seek to establish one or more elected regional councils with a wide range of powers over local services. We recognise that Northern Ireland’s industry will continue to require government support.

    5. Helping the family

    HOMES OF OUR OWN

    To most people ownership means first and foremost a home of their own.

    Many find it difficult today to raise the deposit for a mortgage. Our tax cuts will help them. We shall encourage shared purchase schemes which will enable people to buy a house or fiat on mortgage, on the basis initially of a part-payment which they complete later when their incomes are high enough. We should like in time to improve on existing legislation with a realistic grants scheme to assist first-time buyers of cheaper homes. As it costs about three times as much to subsidise a new council house as it does to give tax relief to a home buyer, there could well be a substantial saving to the tax and ratepayer.

    The prospect of very high mortgage interest rates deters some people from buying their homes and the reality can cause acute difficulties to those who have done so. Mortgage rates have risen steeply because of the Government’s financial mismanagement. Our plans for cutting government spending and borrowing will lower them.

    THE SALE OF COUNCIL HOUSES

    Many families who live on council estates and in new towns would like to buy their own homes but either cannot afford to or are prevented by the local authority or the Labour government. The time has come to end these restrictions. In the first session of the next Parliament we shall therefore give council and new town tenants the legal right to buy their homes, while recognising the special circumstances of rural areas and sheltered housing for the elderly. Subject to safeguards over resale, the terms we propose would allow a discount on market values reflecting the fact that council tenants effectively have security of tenure. Our discounts will range from 33 per cent after three years, rising with length of tenancy to a maximum of 50 per cent after twenty years. We shall also ensure that 100 per cent mortgages are available for the purchase of council and new town houses. We shall introduce a right for these tenants to obtain limited term options on their homes so that they know in advance the price at which they can buy, while they save the money to do so.

    As far as possible, we will extend these rights to housing association tenants. At the very least, we shall give these associations the power to sell to their tenants.

    Those council house tenants who do not wish to buy their homes will be given new rights and responsibilities under our Tenants’ Charter.

    REVIVING THE PRIVATE RENTED SECTOR

    As well as giving new impetus to the movement towards home ownership, we must make better use of our existing stock of houses. Between 1973 and 1977 no fewer than 400,000 dwellings were withdrawn from private rental. There are now hundreds of thousands of empty properties in Britain which are not let because the owners are deterred by legislation. We intend to introduce a new system of shorthold tenure which will allow short fixed-term lettings of these properties free of the most discouraging conditions of the present law. This provision will not, of course, affect the position of existing tenants. There should also be more flexible arrangements covering accommodation for students. At the same time, we must try to achieve a greater take-up in rent allowances for poorer tenants.

    PROTECTING THE ENVIRONMENT

    The quality of our environment is a vital concern to all of us. The last Conservative government had a proud record of achievement in reducing pollution, and protecting our heritage and countryside. We shall continue to give these issues a proper priority. Subject to the availability of resources we shall pay particular attention to the improvement and restoration of derelict land, the disposal and recycling of dangerous and other wastes, and reducing pollution of our rivers and canals.

    We attach particular importance to measures to reduce fuel consumption by improving insulation.

    STANDARDS IN EDUCATION

    The Labour Party is still obsessed with the structure of the schools system, paying too little regard to the quality of education. As a result we have a system which in the view of many of our parents and teachers all too often fails – at a cost of over £8 billion a year

    – even to provide pupils with the means of communication and understanding. We must restore to every child, regardless of background, the chance to progress as far as his or her abilities allow.

    We will halt the Labour government’s policies which have led to the destruction of good schools; keep those of proven worth; and repeal those sections of the 1976 Education Act which compel local authorities to reorganise along comprehensive lines and restrict their freedom to take up places at independent schools.

    We shall promote higher standards of achievement in basic skills. The Government’s Assessment of Performance Unit will set national standards in reading, writing and arithmetic, monitored by tests worked out with teachers and others and applied locally by education authorities. The Inspectorate will be strengthened. In teacher training there must be more emphasis on practical skills and on maintaining discipline.

    Much of our higher education in Britain has a world-wide reputation for its quality. We shall seek to ensure that this excellence is maintained. We are aware of the special problems associated with the need to increase the number of high-quality entrants to the engineering professions. We shall review the relationship between school, further education and training to see how better use can be made of existing resources.

    We recognise the valuable work done by the Youth Service and will continue to give help to those voluntary bodies which make such a considerable contribution in this field.

    PARENTS’ RIGHTS AND RESPONSIBILITIES

    Extending parents’ rights and responsibilities, including their right of choice, will also help raise standards by giving them greater influence over education. Our Parents’ Charter will place a clear duty on government and local authorities to take account of parents’ wishes when allocating children to schools, with a local appeals system for those dissatisfied. Schools will be required to publish prospectuses giving details of their examination and other results.

    The Direct Grant schools, abolished by Labour, gave wider opportunities for bright children from modest backgrounds. The Direct Grant principle will therefore be restored with an Assisted Places Scheme. Less well-off parents will be able to claim part or all of the fees at certain schools from a special government fund.

    THE ARTS

    Economic failure and Socialist policies have placed the arts under threat. Lightening the burden of tax should in time enable the private sponsor to flourish again and the reform of capital taxation will lessen the threat to our heritage. We will strengthen the existing provision whereby relief from CTT is available on assets placed in a maintenance fund for the support of heritage property. We favour the establishment of a National Heritage Fund to help preserve historic buildings and artistic treasures for the nation. We will continue to give as generous support to Britain’s cultural and artistic life as the country can afford.

    Sport and recreation have also been hit by inflation and high taxation. We will continue to support the Sports Councils in the encouragement of recreation and international sporting achievement.

    HEALTH AND WELFARE

    The welfare of the old, the sick, the handicapped and the deprived has also suffered under Labour. The lack of money to improve our social services and assist those in need can only be overcome by restoring the nation’s prosperity. But some improvements can be made now by spending what we do have more sensibly.

    In our National Health Service standards are falling; there is a crisis of morale; too often patients’ needs do not come first. It is not our intention to reduce spending on the Health Service indeed, we intend to make better use of what resources are available. So we will simplify and decentralise the service and cut back bureaucracy.

    When resources are so tightly stretched it is folly to turn good money away from the NHS and to discourage people from doing more for themselves. We shall therefore allow pay-beds to be provided where there is a demand for them; end Labour’s vendetta against the private health sector; and restore tax relief on employer-employee medical insurance schemes. The Royal Commission on the Health Service is studying the financing of health care, and any examination of possible longer term changes – for example greater reliance for NHS funding on the insurance principle – must await their report.

    In the community, we must do more to help people to help themselves, and families to look after their own. We must also encourage the voluntary movement and self-help groups working in partnership with the statutory services.

    MAKING SENSE OF SOCIAL SECURITY

    Our social security system is now so complicated that even some Ministry officials do not understand it. Income tax starts at such a low level that many poor people are being taxed to pay for their own benefits. All too often they are little or no better off at work than they are on social security.

    This was one of our principal reasons for proposing a tax credit scheme. Child benefits are a step in the right direction. Further progress will be very difficult in the next few years, both for reasons of cost and because of technical problems involved in the switch to computers. We shall wish to move towards the fulfilment of our original tax credit objectives as and when resources become available. Meanwhile we shall do all we can to find other ways to simplify the system, restore the incentive to work, reduce the poverty trap and bring more effective help to those in greatest need.

    Restoring the will to work means, above all, cutting income tax. It also involves bringing unemployment and short-term sickness benefit within the tax system an objective fully shared by Labour Ministers. The rules about the unemployed accepting available jobs will be reinforced and we shall act more vigorously against fraud and abuse.

    We welcomed the new Child Benefit as the first stage of our tax credit scheme. One-parent families face much hardship so we will maintain the special addition for them.

    THE ELDERLY AND THE DISABLED

    We will honour the increases in retirement pensions which were promised just before the election.

    However, like others, pensioners have suffered from the high taxes and catastrophic inflation of Labour’s years.

    It is wrong to discourage people who wish to work after retirement age, and we will phase out the ‘earnings rule’ during the next Parliament. The Christmas Bonus, which the last Conservative government started in 1972, will continue. We will exempt war widows’ pensions from tax and provide a pension for pre-1950 widows of ‘other ranks’ who do not receive one at present.

    Much has been done in recent years to help the disabled, but there is still a long way to go. Our aim is to provide a coherent system of cash benefits to meet the costs of disability, so that more disabled people can support themselves and live normal lives. We shall work towards this as swiftly as the strength of the economy allows.

    6. A strong Britain in a free world

    IMPROVING OUR DEFENCES

    During the past five years the military threat to the West has grown steadily as the Communist bloc has established virtual parity in strategic nuclear weapons and a substantial superiority in conventional weapons. Yet Labour have cut down our forces, weakened our defences and reduced our contribution to NATO. And the Left are pressing for still more reductions.

    We shall only be able to decide on the proper level of defence spending after consultation in government with the Chiefs of Staff and our allies. But it is already obvious that significant increases will be necessary. The SALT discussions increase the importance of ensuring the continuing effectiveness of Britain’s nuclear deterrent.

    In recent times our armed forces have had to deal with a wide variety of national emergencies. They have responded magnificently despite government neglect and a severe shortage of manpower and equipment. We will give our servicemen decent living conditions, bring their pay up to full comparability with their civilian counterparts immediately and keep it there. In addition, we must maintain the efficiency of our reserve forces. We will improve their equipment, too, and hope to increase their strength.

    THE EUROPEAN COMMUNITY

    If we wish to play our full part in shaping world events over the next few critical years, we must also work honestly and genuinely with our partners in the European Community. There is much that we can achieve together, much more than we can achieve alone.

    There are some Community policies which need to be changed since they do not suit Britain’s – or Europe’s – best interests. But it is wrong to argue, as Labour do, that Europe has failed us. What has happened is that under Labour our country has been prevented from taking advantage of the opportunities which membership offers.

    Labour’s economic policies have blunted our competitive edge and made it more difficult for our companies to sell in our partners’ markets. What is more, the frequently obstructive and malevolent attitude of Labour Ministers has weakened the Community as a whole and Britain’s bargaining power within it.

    By forfeiting the trust of our partners, Labour have made it much more difficult to persuade them to agree to the changes that are necessary in such important areas as the Common Agricultural Policy, the Community budget, and the proposed Common Fisheries Policy.

    The next Conservative government will restore Britain’s influence by convincing our partners of our commitment to the Community’s success. This will enable us to protect British interests and to play a leading and constructive role in the Community’s efforts to tackle the many problems which it faces.

    We shall work for a common-sense Community which resists excessive bureaucracy and unnecessary harmonisation proposals, holding to the principles of free enterprise which inspired its original founders.

    Our policies for the reform of the CAP (see Chapter 3) would reduce the burden which the Community budget places upon the British taxpayer. We shall also strive to cut out waste in other Community spending programmes.

    National payments into the budget should be more closely related to ability to pay. Spending from the budget should be concentrated more strictly on policies and projects on which it makes sense for the Community rather than nation states to take the lead.

    We attach particular importance to the co-ordination of Member States’ foreign policies. In a world dominated by the super-powers, Britain and her partners are best able to protect their international interests and to contribute to world peace and stability when they speak with a single voice.

    AFRICA AND THE MIDDLE EAST

    In Africa and the Middle East, there is an increasing threat from the Soviet Union and its Cuban allies. That threat must be countered, not only through collaboration with our European and American allies but also by the people and governments in Africa and the Middle East whose independence is threatened.

    We shall do all we can to build on the Egyptian/Israeli peace treaty, to seek a comprehensive settlement which will bring peace to the whole region.

    RHODESIA

    The Conservative Party will aim to achieve a lasting settlement to the Rhodesia problem based on the democratic wishes of the people of that country. If the Six Principles, which all British governments have supported for the last fifteen years, are fully satisfied following the present Rhodesian Election, the next government will have the duty to return Rhodesia to a state of legality, move to lift sanctions, and do its utmost to ensure that the new independent state gains international recognition.

    TRADE, AID AND THE COMMONWEALTH

    Like other industrial countries, Britain has a vital interest in bringing prosperity to poorer nations which provide us with a growing market and supply many of the raw materials upon which we depend. The next Conservative government will help them through national and international programmes of aid and technical co-operation and by the encouragement of voluntary work. But we also attach particular importance to the development of trade and private investment through such instruments as the European Community’s Lomé Convention. In particular, we will foster all our Commonwealth links and seek to harness to greater effect the collective influence of the Commonwealth in world affairs.

    7. A new beginning

    IN THIS MANIFESTO we have not sought to understate the difficulties which face us-the economic and social problems at home, the threats to the freedom of the West abroad. Yet success and security are attainable if we have the courage and confidence to seize the opportunities which are open to us.

    We make no lavish promises. The repeated disappointment of rising expectations has led to a marked loss of faith in politicians’ promises. Too much has gone wrong in Britain for us to hope to put it all right in a year or so. Many things will simply have to wait until the economy has been revived and we are once again creating the wealth on which so much else depends.

    Most people, in their hearts, know that Britain has to come to terms with reality. They no longer have any time for politicians who try to gloss over the harsh facts of life. Most people want to be told the truth, and to be given a clear lead towards the action needed for recovery.

    The years of make-believe and false optimism are over. It is time for a new beginning.

  • General Election Manifestos : 1987 SDP-Alliance

    General Election Manifestos : 1987 SDP-Alliance

    The 1987 SDP-Alliance manifesto.

    Britain United: The Time Has Come


    FOREWORD: BRITAIN UNITED

    The Alliance’s vision is of a Britain united, a Britain confident, compassionate and competitive. We know that it is possible to unite our country. We know the British people want greater unity. But we also know the task of drawing Britain together again can only be achieved through political, economic and social reform on a scale not contemplated in our country for over forty years.

    At the last election, about a third of the nation’s voters didn’t even both to turn out.

    It’s hard to think of a more damning condemnation of politics in this country.

    But it’s not difficult to understand why so many people feel cynical and uninterested.

    Since the last war the Tories and Labour have each had six turns at Government.

    Many honourable men and women on both sides have worked hard for the nation but the system has defeated all but a few.

    Rigid dogmas, the overriding need for party unity, and indiscriminate three-line whips have all helped to create a climate of conflict and rancour.

    Listen to Parliamentary question time and count how many times the Speaker has to call for order. We’ve had forty years of yah-boo politics and where has it got us?

    We live in a country that is patently unfair to many of its citizens. While politicians brandish statistics at each other on TV chat shows, we can all see with our own eyes what is happening to our schools, hospitals and inner cities.

    We know there is more crime because our own homes have been broken into, our own neighbours have been mugged, our own children have been offered drugs.

    We know that unemployment remains a huge problem because few families haven’t been touched by its shadow.

    For many, the situation seems hopeless. Unable to contemplate five more years of uncaring government under Mrs Thatcher, they still do not trust the Labour Party.

    Mr Kinnock tries hard but for how long can he keep the lid on the extremists of the Left?

    They already dominate some of the Town Halls When the election is over, will they emerge again to claim the rewards of their silence?

    Many of these people feel that the Alliance is the answer – but they ask what chance does it have of changing things? The answer is – every chance.

    At the last election, the Alliance won nearly 8 million votes, little less than the Labour Party.

    If just 72 more people in every 700 vote for the Alliance this time, we will be the single largest party in Parliament. If just 5 more people in every 700 support us, we would have over 70 seats and almost certainly hold the balance of power.

    Think of it. Issues would be judged on their merits. We would curb the Tories’ divisive policies and stop the destructive antics of the Labour Left.

    Politicians would be forced to listen to each other and work together. The two-party, two-class pantomime would finally be over.

    It’s not an impossible dream. It’s closer now than at any time in our history. All you have to do to make it happen is to vote Alliance on June 17th.

    DAVID STEEL
    DAVID OWEN


    INTRODUCTION

    There has never been an election like this in modern times. All the evidence and all the commentators confirm that it is a three-way contest which the Alliance enters from a position of unprecedented strength and promise. The Official Opposition is falling apart and is now quite unable to present itself as a realistic alternative to a Government which presides over the worst unemployment ever known in the lifetime of those who are of working age. The two-party system has broken down because it is rooted in outdated battles of class and ideology, and provides no outlet for the vast numbers of people who want individual freedom to go hand-in-hand with social justice, who want the state to back industry without trying to take it over, who want power to be given back to communities instead of concentrated in Whitehall and who want a nation which is soundly defended but takes the lead in the quest for negotiated disarmament and a fairer world.

    In any Government the policies which have been set out in the election programme can only tell part of the story of how they will behave in office. It is at least as important to know and trust the values and principles for which they stand, and which will guide their response to the new events and new problems with which governments have to deal. These values, we believe, are embodied in this Joint Programme. They are our guide-book for government:

    • Governments are there to protect and preserve the freedom of citizens, to whom they should be accountable and open;
    • Freedom must extend to all the people, and Governments must therefore widen the opportunities of those whose liberty is limited by lack of employment, education, health care, housing or help in dealing with disability;
    • Governments should not try to do what can be better done by individuals, by communities, by voluntary organisations or by private enterprise, but should set about enabling people to help themselves; however governments should be ready to enter into partnership with these organisations to tackle the problems that neither it nor they can solve alone;
    • Decisions of Government should be taken democratically at the most local level compatible with effective action;
    • Governments should learn to listen to the people to whom they are accountable;
    • Governments should exercise the creative leadership to enable society as a whole to match its needs and resources with the work to be done – of which there is an abundance in Britain today;
    • Government must challenge and curb all those who threaten individual freedom by the abuse of monopoly power, by the denial of rights or by crime and violence;
    • It is the business of Government to act fairly in the pursuit of a united society, not to identify itself solely with any one section of society or region of the country;
    • Government should take positive steps to ensure equal opportunities for women – who make up 52% of the population – and for minority groups such as the ethnic communities.
    • Government must enable society to take the longer view, setting the right balance between present consumption and future investment and ensuring that economic development is sustainable and environmentally responsible.

    These values must also guide foreign policy, where the defence of the nation goes hand-in-hand with the promotion of peace and fairness in a world marked by severe inequality and injustice.

    We believe that Government at all levels can be more open, more accountable, more fair and more in tune with the wishes of the people of this country if it is allowed to break free of the two-party system and the old class conflict which that system feeds. Our country and its people deserve better, and here is how we believe it can be done.

    BETTER GOVERNMENT

    Most of the problems facing our country cannot be solved unless we get better government. That means government which can carry the people with it in its major policies, and it means government which the citizens can call to account. Our system is currently failing in both respects, and it is getting worse. Under our proposals no government will be able to ride roughshod over the rights of its citizens.

    First, we insist that the voting system should be reformed so that no minority – which is what Mrs. Thatcher’s Party was at the last election – is given an inflated Parliamentary majority. Fewer people voted Conservative at the last election than the one before, yet the system gave the absolute power of a massively increased majority to Mrs. Thatcher, and ensured that the House of Commons could be little more than a talking shop. No wonder Labour leaders join with the present Conservative leadership in wanting to keep the old system – they can see that it offers the only hope of inflicting on the nation policies which the majority of the people reject. The Alliance will introduce community proportional representation, using the well-tried single transferable vote system with constituencies based on local communities. This system also gives the voters the chance to show which candidates they prefer and would increase the opportunities for women to be elected to Parliament, and make the election of representatives of ethnic minorities more likely. We will reform the voting system for local government on a similar basis, which is the real answer to the abuse of power by the Town Hall extremists. Fairly elected local councils can and should be entrusted with important responsibilities because they are not run as one party states. We will end the scandal whereby England, Scotland and Wales are denied fair representation in the European Parliament; we will introduce a new Great Reform Charter covering a range of specific legislation, all aimed at strengthening our democracy both locally and nationally.

    We will open the doors of government so that incompetence and deceit cannot be hidden behind them. We will repeal Section Two of the Official Secrets Act and introduce a Freedom of Information Act so that the public have access to government information to give people access to their personal files, including medical files, held about them by public bodies and to build on the foundation laid by the Access to Personal Files Act, which was introduced as a private members bill by a Liberal MP. We hope to strengthen data protection laws. In areas of government where secrecy is needed, we will introduce new safeguards including a committee of Privy Counsellors to oversee the security services.

    We do not believe that Whitehall knows best. British government has never been more centralised than it has become under Mrs. Thatcher. In education, health and every aspect of local government, power has been taken over by Ministers. As a result of what the Conservatives have done, an extremist government would have far more opportunities than ever before to control people’s lives. This centralisation is inefficient as well as dangerous. How on earth can the man or woman in Whitehall know the needs, the problems and the potential of every community from Shetland to the Scillies? The Alliance will reverse this trend.

    We will introduce a code for the public service and reassert the safeguards of ministerial responsibility and civil service impartiality which have been severely eroded under Mrs. Thatcher’s Government as the handling of the Westland affair showed.

    We will devolve power to the nations and regions of Britain. We aim to establish an elected Scottish Parliament, Welsh Senedd and elected regional assemblies throughout England. Public support is essential for progress to be made within the framework of an initial Devolution Act. The devolved structure will require a step-by-step process starting with establishing a Scottish Legislative Assembly with wide powers and self-government in her domestic affairs. This would be created within an overall framework in a devolution bill which sets out the objectives and principles for devolution of powers within the UK. Wales already has a well established, but unaccountable, layer of devolved administration; we therefore aim to create a Welsh Senedd and would publish an early Green Paper on its powers and responsibilities. The abolition of the Greater London Council and the six metropolitan county councils has created a vacuum. London is now the only major capital city in the democratic world without a democratically elected local authority. Greater London is of sufficient size and importance to be a region in itself and there is already widespread support for such a regional assembly, which should be established as soon as possible. We shall publish an early Green Paper with proposals for an elected Greater London regional assembly and setting out the proposals, as the need and demand is established, for the creation of democratically elected regional governments in England.

    Local government needs a fair system of local finance which the rates no longer provide. The Government’s alternative of a poll tax is unacceptable because it is grossly unfair: it does not relate taxation to the ability to pay. We are committed to the planned introduction of a local income tax as the main source of local government revenue in place of domestic rates. We believe that business rates should be related to ability to pay and we will consult with industry and commerce as to how this can be achieved.

    Parliament itself needs a shake-up. A fair electoral system will have that effect but even under the present system many existing Parliamentary practices will not survive for long after this election, because three major political forces will be strongly represented. It will no longer be possible for two political parties to run the House of Commons to suit their own convenience. We intend to put the control of parliamentary time in the hands of an All-Party Business Committee and to make much more use of select committees: we want widely-supported private members bills to have sufficient time to be debated and decided upon. In recent years the House of Lords has proved the value of a second chamber by its careful scrutiny of bills which got little attention in the Commons and by its willingness to defeat the government on issues of national concern. But there can be no justification for basing the membership of the second chamber so largely on heredity and on the whim of Prime Ministers. The Alliance will work towards a reform of the second chamber linked with our devolution proposals so that it will include members elected from the regions and nations of Britain and will phase out the rights of hereditary peers to vote in the Lords.

    We will greatly strengthen the rights of the individual. British Governments have sought to lull citizens into a false sense of security by claiming that our rights are protected by an unwritten constitution. Hundreds of British people find out every year that these protections are inadequate and they have to go to Strasbourg to seek protection from the European Convention on Human Rights. We will enact the European Convention into British law, so that the citizen can secure redress in the British courts.

    We will establish a Human Rights Commission, which will take over the work of the Equal Opportunities and Racial Equality Commissions, and counter all discrimination on grounds of race, sex, creed, class, disability or sexual orientation. The Commission would be able to initiate action in the courts.

    We will open up opportunities for women at work and in public life. Today, fewer than one in five of Government appointees on public bodies are women. We will secure equal representation of women on all appointed public bodies within a decade; our social and tax policies aim to give women equal rights and freedom to choose their way of life.

    The Alliance accepts the need for immigration controls and for clear legal definition of British nationality, but also accepts that the law in this area is fundamental to individual rights and should be fair to everyone regardless of race and regardless of whether they are men or women. There should be effective rights of appeal against refusal of citizenship and referral to an independent body in cases of deportation, and immigration procedures should be revised so as to promote family unity without significantly affecting immigration totals, which remain lower than rates of emigration from Britain.

    We will combat discrimination against black people in housing and employment and take positive steps through such measures as contract compliance to secure equal opportunities for racial minorities, and we will devote more police resources to dealing with racial harassment.

    We will combat prejudice against and misunderstanding of people with disabilities, to improve their quality of life, and to extend educational opportunities for disabled young people.

    We will restore the principle that anyone born in Britain is entitled to British citizenship. We are adamantly opposed to discrimination and we will repeal the sexist and racist aspects of the British Nationality Act 1981.

    The Great Reform Charter

    Democracy in Britain did not just happen. It was the product of reform – reform against vested interests of both left and right. In 1832 Britain took the first step with the Great Reform Act. Further instalments of reform followed in 1867, 1884, 1918 and 1928 before all men and women had gained the vote. Yet, since then, our democracy has stood still despite the tremendous changes in the economy and society. The Alliance believes that it is time for a new era of reform. For, without getting the structure of our democracy right, we will get nothing right.

    The Alliance, if empowered by the British people, will:

    • Replace the undemocratic ‘first past the post’ electoral system with proportional representation based on a single transferable vote for all Westminster and local authority elections;
    • Introduce PR for elections to the European Parliament. We support a common system for all member states;
    • Repeal the Official Secrets Act and replace it with Freedom of Information legislation providing for a public right of access to all official information, subject to limited and specific exemptions to protect national security and proper law enforcement and privacy;
    • Reform the law of confidentiality to ensure that freedom of expression on matters of public interest is not unnecessarily restricted;
    • Incorporate the European Convention on Human Rights and its protocols into British law in a Bill of Rights;
    • Remove the right of the Prime Minister to determine the date of general elections and replace it with fixed-term parliaments;
    • Devolve power to a legislative Scottish Assembly, establish a Welsh Senedd and decentralise decision-making to the English regions in accordance with the wishes of their electors;
    • Extensively reform Whitehall procedures in order to make the governmental system more responsive to the wishes and needs of the people;
    • Reform the House of Commons procedures;
    • Reform the House of Lords.

    Opportunities for Women

    The Alliance is committed to the principle that women should have equal opportunities and in government we will take positive steps to ensure this ideal becomes a reality.

    We will open up opportunities for women in public life by securing equal representation of women on all appointed bodies within a decade.

    We will strengthen the rights of women at work through equal pay for work of equal value, equal treatment, ensuring that all public authorities and private contractors are equal opportunity employers. We will restore the maternity grant and improve benefits for families.

    We will offer a tax allowance to help with the costs of childcare and remove the tax on the use of workplace nurseries.

    We will ensure that girls and women have equal opportunities in education and training.

    We will promote measures that give employees with family responsibilities rights to parental and family leave.

    The Alliance wants to see more women in Westminster. Changing the electoral system to a form of proportional representation will increase the opportunities for women to be elected to Parliament.

    Northern Ireland

    We intend to secure progress towards a peaceful and secure life for the people of Northern Ireland. That depends on the acceptance of three fundamental principles:

    • Rejection of violence;
    • Recognition that both Unionist and Nationalist traditions have their legitimate place;
    • Acceptance that Northern Ireland should not cease to be a part of the UK unless a majority of the people of Northern Ireland so wish.

    The government of Northern Ireland must be based on a partnership between the two traditions. The Alliance welcomes the Anglo-Irish agreement as a genuine attempt to achieve the objectives we set out. We wish to see a UK/Irish Parliamentary Council, and a devolved assembly where responsibilities and power will be shared. We would improve arrangements far considering Northern Ireland legislation at Westminster.

    Our commitment to incorporate the European Convention on Human Rights into UK law will strengthen individual rights in Northern Ireland and we would reform the Diplock courts so that three judges preside over non-jury trials; in this and other respects we believe that the passing of identical anti-terrorist measures in Northern Ireland and the Republic can increase the authority those measures carry in a divided community. We also support the establishment of a joint security commission.

    We would encourage the participation of people from the minority tradition in the RUC and believe that a totally independent police complaints procedure should be established. We would introduce the 110-day limit on the time in which a prisoner may be held in custody before appearing in court, as we propose for England and Wales.

    We would encourage those who are working for reconciliation in Northern Ireland and who are seeking to eliminate sectarianism and discrimination in religious life, education, housing and politics.

    We believe that the membership of the EEC offers not only practical help to Northern Ireland, but also prospects for the long-term development of a confederal relationship between UK and the Republic of Ireland which could offer a solution to a problem which has claimed over 2,500 lives in the last 18 years.

    FIGHTING CRIME

    Crime rates have soared in this Government’s last eight years. Overall, crime is up by over 60%, burglaries have almost doubled, while robberies have increased two and a half times over. People, particularly elderly people, live in fear in their homes and in the streets and women feel increasingly unable to go out at night.

    Detection rates have dropped from over two-fifths in 1979 to under a third in 1986. Increases in police numbers have been largely offset by special duties like policing strikes and demonstrations, and by a drop in the working week. There are few extra bobbies on the beat.

    The Alliance would tackle both crime and the causes of crime. Some Labour-controlled boroughs refuse to co-operate with the police in combating crime. The Conservative Government refuses to recognise that homelessness, unemployment and aimless bed-and-breakfast regimes are breeding-grounds of delinquency. Both are wrong.

    The Police

    The Alliance firmly supports the police in the battle against crime; that light can only be effective if the police get the support of the whole community, through community policing and policemen on the beat. Many police forces are still under strength: yet more officers are needed to provide the kind of local policing which we believe is essential. An Alliance Government will finance a further 4,000 police officers over and above the present Government plans and 1,000 more civilians, so releasing police officers for patrol duties.

    Proportional representation for local government would stop unrepresentative extremists from controlling police authorities. It would mean more sensible police authorities and make possible a democratically accountable police authority for London. We oppose the police monitoring units by which some Labour councils attempt to undermine the police. The Alliance fully accepts the need for chief officers to have full operational control of their force. The Alliance supports a fully independent system for investigating complaints against the police. We reject moves towards a national police force. We would appoint a Royal Commission to review the question of police accountability.

    Upholding the Law

    We will create a new Ministry of Justice. Its responsibilities will include the strengthening of the rights of the citizen to legal aid and advice and improving court and tribunal procedures. We will establish a family court system and set up a new legal services council.

    Sentencing Policy. Sentencing is often seen as arbitrary, with the same crime attracting widely divergent punishments. For the criminals, sentences become more of a lottery than a deterring force. We will strengthen the role of the Judicial Studies Board in setting guidelines for sentencing. This will mean that any judge stepping outside the Board’s recommendations would be asked to explain the reason and any special circumstances. This would maintain a judge’s flexibility, while keeping sentencing broadly consistent. It would also limit the ever-increasing upward trend in sentencing.

    A Royal Commission on the Presentation of Violence in the Media. We will establish a Royal Commission to report within a year on the public presentation of violence on TV and the reporting of crime in newspapers, to make recommendations on the possible link between these and violent crime on the streets.

    Crime Prevention Units. There would be a duty on all local authorities to establish Crime Prevention Units, and to work closely with the police to help in setting up Neighbourhood Watch schemes. They would advise on security in all new planning and building.

    Insuring Against Crime. We aim to make insurance available to all council tenants, who are twice as likely to be burgled as home owners and far less likely to be insured.

    Curbing the Sale of Offensive Weapons. We will curb the sale of knuckle dusters, battle knives, spiked shoe straps, cross-bows and catapults.

    Lifeline

    Too many elderly people suffer from isolation, fear and cold.

    We intend to give them the safety, security and warmth they deserve. Britain has 6 million people aged 70 or over. For them our “Lifeline” programme will:-

    • include free installation of a telephone;
    • protect them against the criminal by free installation of secure locks:
    • cut their heating bills by free home insulation;
    • abolish standing charges on electricity. gas and telephones;

    These 6 million people live in 4.5 million households and this will cost £180 million. “Lifeline” will build on present schemes and will also be part of our long-term job guarantee.

    Crime Crisis Areas

    An Alliance Government will target “Crime Crisis Areas”, those with the highest rates of crime, for special anti-crime measures. Chief Constables, in consultation with Community/Police Liaison Committees and police authorities, would define these areas. They will have:-

    • More police on the streets;
    • Local police stations re-opened. Police Posts should be established where no station is close by;
    • Security grants to pay for entry phones and security locks;
    • Projects to make crime danger spots safe and to provide effective street lighting and more caretakers on estates;
    • New housing estates designed to minimise opportunities for crime, and hazardous public areas will be redesigned;
    • A legal obligation imposed on British Telecom to keep all public telephones in constant repair. In London up to half our public telephones are broken at any one time – many of them the only lifeline in high crime areas.

    DEALING WITH OFFENDERS

    The Prison Scandal

    The prisons are bursting at the seams, yet Home Office projections show numbers increasing until the end of the decade 1985-1995. Of the 13,000 increase, 5,000 people will be untried and unsentenced.

    The Alliance believes drastic action is needed to reduce the prison population, while ensuring that those responsible for violent and serious crime are kept out of society for as long as the Courts think necessary. Imprisonment rarely rehabilitates the prisoner. Three-fifths of all men who receive a prison sentence re-offend within two years of being released.

    The minimum standards for prisons proposed by NACRO, and accepted in principle by the then Home Secretary as long ago as 1981, should be adopted as a target to be achieved within two years.

    A limit of 110 days should be laid down as soon as possible for remand prisoners. If not prosecuted within that period, they would be released. This system operates successfully in Scotland.

    Probation authorities should be required to provide bail hostels adequate to accommodate their own needs. The Home Office should make a special 100% grant for the purpose.

    The ‘short, sharp, shock’ has failed. As the Magistrate’s Association has recommended there should be a single youth custody sentence. Detention centres, already under-used by the Courts, should be abolished, and the accommodation released to be used for remand centres.

    Alternatives to Prison

    Every effort should be made to ensure that fine defaulters, elderly shoplifters and drunks are not sent to prison.

    Police cautions and intermediate treatment should be more widely used. Where punishment is appropriate, it should normally be community service rather than prison; but many of these offenders are more appropriately dealt with by rehabilitation or medical treatment.

    The probation service must be expanded to enable bail and non custodial sentences to be supervised where necessary under appropriate supervision.

    The Home Office should consider extending the period of automatic remission for less serious offences.

    We strongly support victim support schemes.

    Offenders should recompense their victims, either directly or indirectly. Community service orders oblige offenders to undertake work for the community. They should be more widely used.

    These changes should ease the frustration that threatens to erupt in the prisons, and enable prison officers to do the professional job they want to do. We welcome ‘Fresh Start’, which proposes shorter hours and less reliance on overtime, but recognise that unless overcrowding is tackled, this reform may not work.

    BUILDING THE FUTURE

    A generation ago, Britain was among Europe’s richest countries. Today Britain is falling down the league of industrialised nations. Real income per head is well below that of Sweden, Germany or France. Our manufacturing trade has gone into the red. In every year since 1983 we have imported more goods than we exported, the first time that has happened since the Industrial Revolution.

    Worst of all is unemployment. Many more than the three million people registered as unemployed have no jobs. The Government has juggled the figures and brought in cosmetic devices to hide the truth. But the facts won’t go away. The dole queue is three times what it was in 1979. Unemployment has been a low priority for this Government, used to keep down inflation. Tax cuts have had a higher priority than job creation. The cost in human misery and hardship, loss of confidence and self-respect, not least among young people. has been incalculable.

    Britain, like other industrial countries, has to cross the gulf between the first industrial revolution, based on steel, engineering and railways, and the second, based on the sunrise technologies of micro-electronics, bio-technology and new materials. To cross that gulf demands investment in new buildings, plant and machinery, and above all n the research and development on which new products and new processes are based. Yet under Mrs. Thatcher’s Government, investment in manufacturing industry and in R & D has fallen substantially. We must give a much higher priority to training and education. There has been a huge decline in apprenticeships and skill training in Britain in the last eight years, although the new technologies demand much higher qualifications and regular updating of knowledge.

    The Government has failed to use the once-in-a-lifetime opportunity North Sea oil gave us to invest in our industry and in our people. High interest rates have crippled businesses of all sizes; sudden ups and downs in the sterling exchange rate have handicapped exports. Even the proceeds from selling-off state assets – our assets – have gone into cutting taxes to buy votes.

    These are our objectives:

    • to reduce unemployment, first amongst those unemployed for a year or more, and amongst young people; in three years we will reduce unemployment by one million;
    • to bridge the gap between the older industrial areas and the areas of prosperity. The older industrial areas have lost a million jobs. We would encourage regional development agencies and local employment initiatives to harness the energy and enthusiasm of the local people in these hard-hit areas. The South-East would benefit too, for house prices are now snaring far beyond the ability of most families to pay, and attractive countryside is besieged by developers;
    • to build a new partnership between business and government, to re-equip our factories, tackle the blight of our inner cities, and draw up a strategy for a competitive and successful industry;
    • to abolish class division in the workplace by encouraging a single status for white collar and blue collar workers, and creating opportunities for all employees to share in the profits, decisions and ownership of firms;
    • to strengthen the rights of women at work including equal pay for work of equal value and equal treatment. We will ensure that all public authorities and private contractors are equal opportunity employers and we will promote changes to enable those with domestic responsibilities to secure access to employment. We would restore maternity grants and give a tax allowance to help with child-care costs. We would remove the tax on the use of workplace nurseries and encourage wider provision of child-care facilities.

    UNEMPLOYMENT

    Unemployment at present levels is not the inevitable result of new technology or world recession – Japan has only 2.5% unemployment and US unemployment has fallen by two million since 1983. It can be reduced in Britain. The key is to ensure that in creating new jobs the nation does not embark on another round of severe inflation which will damage competitiveness and cost us jobs in the long run. Labour ignores this danger and the Conservatives use it as an excuse for allowing unemployment to remain high. The Alliance is prepared to take the difficult steps necessary to create jobs and control inflation at the same time.

    Therefore we will expand the economy by targeting resources to increase output and exports rather than consumption and imports. New capital investment building up to £1.5 billion per annum will support the framework of services on which industry and society depend, like transport, homes, schools, hospitals and drainage. We will give more spending power to the poorest people in our society, which will itself generate more economic activity with much less impact on imports than general cuts in income tax;

    We will control inflation by winning the support of the British people for our incomes strategy; as a back-up we will legislate for reserve powers for a counter-inflation tax on companies under which inflationary increases would be unattractive because they would go in extra tax: profit-sharing would be exempted. We would introduce fairer arrangements for public sector pay, with an independent pay and information board whose findings would inform and assist negotiations, arbitration procedures and incentives to negotiate no-strike agreements in essential services;

    We will join the exchange rate mechanism of the European Monetary System, enabling us to make our currency more stable and to reduce current interest rates by as much as 2%. We would also seek to develop the role of the EMS within the world economy.

    For the long-term unemployed we will provide a guarantee of a job through:

    • a) a building and investment programme aimed at providing 200,000 jobs in such essential areas as transport, housing, insulation, urban renewal and new technologies;
    • b) a new recruitment incentive to encourage companies to take on over 270,000 jobless people;
    • c) a crash programme of education and training, offering new skills to the unskilled unemployed, with 200,000 places;
    • d) 60,000 extra jobs in the health and social services to improve care in the community and more jobs in nursery education;
    • e) an expanded job release scheme, opening up 30,000 jobs by allowing men to benefit from the scheme at 62 years of age.

    REBUILDING BRITISH INDUSTRY

    Manufacturing and services go hand in hand, but only a quarter of services are tradable and two thirds of our exports depend on manufacturing. Britain cannot survive on a basis of low-tech service jobs. Nor can business flourish without a thriving industry to buy their products. Manufacturing industry is the driving force at the core of our economy. Its decline must be reversed.

    Therefore:

    • We will introduce Industrial Investment Bonds to attract investors into industry, a new industrial credit scheme to provide medium-term finance for manufacturing companies and a tax allowance for investment in new technologies;
    • We will work in partnership with industry and put industry first. There will be a new Cabinet Industrial Policy Committee responsible for overseeing the development and implementation, in co-operation with industry, of a broad industrial strategy with long-term priorities;
    • We will encourage employers to take on more staff by a 25% cut in their National Insurance Contribution payments targeted on assisted areas and areas of high unemployment;
    • We will introduce a training incentive with rebates for companies who spend more money on training and contributions from those who do not provide it themselves; our new Department of Education and Training will monitor standards and turn youth training into a fully comprehensive, high quality vocational and educational programme for 16-19 years old;
    • We will increase the lamentably low funding of civil research and development, placing emphasis both on commercial exploitation of new technology using the British Technology Group, and on boosting basic scientific research; we would give greater support to European Community joint research programmes;
    • We will give more backing to exports using the Export Credit Guarantee Department and the Aid and Trade Provision (funded from the DTI) more effectively than the present Government has done in recent years because of its ambivalent attitude towards public sector support. We will press the European Community to take stern action against dumping. We will launch a more determined attack on unfair restrictions on our trade, including those imposed by Japan on a wide range of products and services and by the US on our high-technology exports;
    • We will insist on a strong competition policy to promote efficiency and give consumers a fair deal: the Office of Fair Trading will be strengthened and will take on the responsibilities of the Monopolies and Mergers Commission and companies seeking mergers will have to justify them; individuals and institutions will have power to seek redress in court against anti-competitive practices;
    • We will continue to judge whether industries should be in the public or private sector on objective criteria related to competition and efficiency. We opposed the privatisation of British Gas and British Telecom although we would not reverse it but instead concentrate on improving consumer choice and protection. We supported the privatisation of Rolls Royce. We would not privatise water authorities and the Central Electricity Generating Board on grounds of public policy relating to safety standards and care for the environment. We welcome the fact that British Steel is now operating profitably. We believe it should be retained as a single entity to withstand international competition and should be considered for privatisation providing its success can be maintained;
    • We will work with the people of the hard-hit regions to stimulate new economic activity and new prospects for jobs through regional development agencies. We will encourage the setting up of a local venture capital funds to finance new enterprise. We do not believe that government always knows best, so we will support local initiatives through appropriate fiscal and financial means.

    Backing Small Business

    We will build a partnership between government, entrepreneurs and investors to encourage new businesses and create new jobs. We will especially encourage small businesses, which will be a major motor of growth and employment in the 1990s.

    We will reduce the tax and administrative burdens on small businesses.

    We will promote the establishment of Small Firms Investment Companies to provide equity and loan finance.

    We will introduce a Bill to enable business to charge interest on overdue payment of bills, if they so wish.

    We will ensure that there are business start-up schemes and expansion schemes specifically geared to encouraging enterprise by women.

    We will ensure small businesses get their fair share of public contracts from both central and local government.

    We will encourage local public/private initiatives, such as the Enterprise Agencies, which we identified in our Worksearch Campaign.

    Industrial Investment Bonds

    We will introduce Industrial Investment Bonds to liberate many new and small businesses from the high cost of borrowing start-up capital.

    These bonds will help bridge the gap between the new businessman who needs access to low-cost funds and the investor, including individuals, who would like to back him or her provided the balance between risk and reward is reasonable. We will accordingly allow new and growing companies to raise funds through the issue of Industrial Investment Bonds which will pay interest free of tax to investors.

    A similar scheme is already providing a valuable kick-start for many new companies in the United States. Together with the Business Expansion Scheme, our Industrial Investment Bonds will give the next generation of businesses the most favourable climate ever to build up employment for the community and profits for themselves and their investors.

    We Will Promote Partnership

    For too long the industrial sector has been a battleground between opposing forces of capital and labour, instead of a mutually beneficial and equal partnership.

    We will legislate for employee participation but believe that flexibility must be allowed in working out the detail for employee councils at the place of work. These councils should have the information and the rights to enable them to contribute to strategic decisions; opportunity must be provided for participation at top level – for example by employee directors or a representative or supervisory council, or by directors elected by shareholders and employees jointly.

    We will encourage other forms of industrial participation, including co-operatives in which it is workers who hire capital and management skill; we will establish an Industrial Partnership Agency incorporating the Co-operative Development Agency to take a lead in this field.

    We will strengthen the law in relation to Directors’ statutory obligation to have regard to the interests of their employees as well as their shareholders; this should include a requirement to consult employees before making a recommendation in response to any take-over bids.

    We will extend incentives to employees’ share-ownership and profit-sharing which were introduced at Liberal insistence in 1987.

    We will encourage wider share ownership by a scheme which gives more people a direct tax incentive to become small investors;

    We have long been committed to trade union reform aimed at giving unions back to their members and we have taken the lead n promoting the extension of postal ballots and internal elections and have vigorously opposed pre-entry closed shops. Trades unions are an essential element in the protection of the employees’ interests, which is why we would return union recognition to GCHQ members. Our central aim is to make unions democratic and accountable and therefore entitled to positive rights including the right to recognition and the right to strike balanced by the acceptance of their responsibilities to their members, their industries and to the wider community.

    To reduce industrial conflict we support a system of referring disputes to independent arbitration prior to any industrial action. We will also encourage the establishment of freely negotiated strike-free agreements especially in the provision of essential public services.

    We will take action through equal opportunity and contract compliance policies to eliminate discrimination against ethnic minorities and women.

    We will actively promote measures that give employees with family responsibilities minimum rights to parental and family leave.

    AGRICULTURE

    The Alliance will promote a healthy farming industry. We must arrest the precipitous decline in farm incomes of recent years. Our policies for aligning supply and demand of agricultural produce are designed to secure fair returns for farmers’ efforts. Adequate price and income support is required to enable necessary farming adjustments to be made.

    We will join the exchange rate mechanism of the European Monetary System to lower interest rates, promote financial stability and prevent unfair discrimination against British farmers through over-valuation of the green pound.

    The Alliance will work to reform the CAP; the policy has achieved secure food supplies but has gone on unchecked to produce wasteful and hugely expensive surpluses. Many farmers who borrowed heavily on inflated land prices to meet production demands are now threatened with bankruptcy. The Alliance will secure the income of British family farms by negotiating adequate guaranteed prices for determined quantities of production, with additional quantities disposed at much lower floor intervention prices: a two-tier pricing system. An eligible tonnage for each member-state will be agreed to take into account the differing farm structures in the Community.

    We will seek a fairer share of milk quota for British producers and the retention of the right to quota transfer and leasing. Transfer of quotas through an agency would create a pool of quota to be administered by the Milk Marketing Board and would help small family farms.

    We are committed to supporting the less favoured areas, and ensuring that the upland beef and sheep industries are safeguarded through differential premia and retention of the sheepmeat regime.

    We shall increase Government support for effective marketing schemes for farm produce at home and abroad. Farm-based processing and marketing co-operatives will be assisted to retain more of the selling price of foodstuffs in rural communities.

    We will encourage conservation, the reduced use of chemical inputs, organic farming and less intensive methods of livestock production. The Government’s cuts in agricultural research, education and advice will be reversed. Special efforts will be devoted to lowering input costs. The Alliance will sponsor partnership between Government and industry to promote both research into new uses for farm produce which will help to sustain incomes and into the improvement of animal welfare.

    We will encourage farmers to diversify taking account of the needs of tenant farmers and other small family farms. We will make annual payments for the upkeep of important amenities such as walls, hedges, footpaths and meadows. We will provide further support for the custodianship of areas of environmental importance, and the encouragement of mixed forestry on the farm with establishment grants and annual payments for growers. We will propose clear guidelines for land use to assist diversification and to protect the countryside.

    The Alliance rejects proposals to rate farm land or buildings. We also reject the Government’s proposals for a poll tax which will apply to farmers and farm workers and, unlike Alliance proposals for local government income tax, is not based on the ability to pay.

    The Alliance wishes to support new entrants to the farming industry, and therefore proposes the retention of County Council smallholdings and the promotion of tax incentives to encourage landlords to let more land.

    We would promote local rural employment, including farm-based tourism, through properly funded rural development agencies and by means of a credit scheme which would provide working capital at low rates of interest to agricultural and rural industries.

    We will also encourage the establishment of a Credit Union (or Farm Bank) designed to help farmers secure finance at fair and reasonable rates.

    FISHING

    The Alliance in government will act to strengthen the contribution the fishing industry can make to the livelihood of rural communities.

    After many years of turmoil from the loss of traditional distant water fishing grounds and the protracted negotiations for a fair Common Fishing Policy, what British fishermen now need above all is stability to plan and invest for the future. We will:

    • Improve the conservation of fish stocks by the use of licensing and technical means that will safeguard stocks and decentralise the administration of quantitative controls so as to give fishermen greater responsibility for the management of necessary conservation measures with the flexibility to recognise regional differences.
    • Strengthen the European Community Inspectorate so as to achieve fair enforcement by all member-states.
    • We will support better vocational training, fish processing and marketing and export promotion under the co-ordination of the Seafish Industry Authority.
    • We would not impose light dues on fishing vessels.

    The Alliance believes that these policies will help to secure jobs, greater prosperity, greater fairness, and a sense of pride in the industries upon which our future depends.

    HEALTH AND COMMUNITY CARE

    The National Health Service is in a state of fundamental crisis and malaise. It is suffering shortages and declining standards. Our people are seeing their services cut, their waiting lists lengthened, and more and more needs going unmet. Unless a Government is elected again which is committed to the ideas and ideals of a National Health Service, one of the great achievements of 20th century civilised society could be in irreversible decline.

    We will back the National Health Service by increasing its budget so that by year five it will be £1 billion per annum higher than that planned by the Conservatives. Our Health Service was once the envy of the world: now the strains under which it is working are well known, and we are losing some of the best health professionals who can no longer do the job they were trained to do because of inadequate resources. We aim to restore a sense of pride in the Health Service and to give it a new sense of direction. Our priorities for change are:

    • to provide prompt medical treatment for those who need it, regardless of who they are or where they live. There are huge inequalities between and within regions of the country in availability of hospital treatment and family doctor services. We would set aside special funds – building on the recently introduced funds to cut waiting lists – to back good practice. The Conservative Government has increased prescription charges by 240% over the last eight years which is much higher than inflation. We will not increase prescription charges beyond the inflation rate;
    • to promote good health, not merely to treat illness. This means targeting resources in health education, promoting healthy eating, tightening up food labelling and facing up to the problems presented by smoking and alcohol abuse. We will ban advertising of tobacco products. Our policies to deal with unemployment, poverty and poor housing are crucial in reducing ill-health The primary health care team working with family doctors must be built up and their preventive work expanded. There should be more screening, including well-women clinics, with efficient follow-up for known risk groups;
    • to create a new innovation fund, to tackle inequalities in health care, improve the “cinderella services”, and to fund new developments and new priorities in health care; this will have an initial life of five years, with a budget which will total £250 million in the first three years. This will be in addition to money spent on creating new jobs caring in the community;
    • to make “care in the community” a reality. We are not prepared to see patients turned out of the old institutional hospitals without adequate facilities to care for them in the community. We want to support “carers” who look after elderly and handicapped people in their own families and their own homes. We intend to introduce a carers’ benefit, and we want carers to have more opportunities for a break from their responsibilities. However, we recognise that for some people good institutional care remains the best solution;
    • to strengthen patients’ rights, through statutory access for the individual to his or her own medical files, through more opportunities for patients to participate in decisions and through stronger community health councils;
    • to give real independence to the Health Education Authority;
    • to restructure the nursing profession along the lines proposed in Project 2000.

    In the longer term we want to see health authorities brought under democratic control at local level, but the NHS has suffered so many bouts of reorganisation under successive governments that for the moment the priority must be to let those running the service get on with the job.

    We would remove the centralising pressure to make all authorities do things in the same way, and we would leave authorities with more freedom to decide, for example, whether privatisation of services was likely to improve patient care or not; we would give these authorities more direct control over their budgets.

    We uphold the right of individuals to use their own resources to obtain private medical care, but we will not allow private medicine to exploit the NHS by using facilities at subsidised cost and we will work to end the delays which give rise to “queue-jumping” through private medicine.

    Right to Treatment

    No client of the NHS should have to wait longer than six months for hospital treatment. No-one should be kept waiting for years in pain, with unnecessary crippling disabilities for lack of a hospital bed. Patients should have the right to treatment in other authorities where there is spare capacity.

    The Alliance will work to ensure that every patient receives hospital treatment for routine operations within six months of referral by a GP. The backlog of people waiting is now of crisis proportions. We estimate it will take two years to reduce the maximum waiting time to one year. We aim to reduce this to within six months during our first term of office.

    To end long waiting lists District Health Authorities and Health Boards will be empowered to:-

    • Buy and sell hospital treatment from each other to obtain the best and quickest service;
    • Buy services from other Districts with surpluses. Selling services between DHAs would be a new incentive for good management practice rather than penalise success;
    • Pay travelling costs for patients who cannot afford transport out of their districts;
    • Appoint more hospital doctors and negotiate with consultants so that they give priority to their NHS waiting lists rather than on private practice;
    • Ensure an increased number of places in local hospitals for convalescence and community care to release beds for acute treatment.

    GPs will need to have full computerised information on waiting lists when they make their first referrals. There are already substantial funds within the NHS for computerisation and the Alliance will ensure all GPs can be linked to hospitals nation-wide.

    In consultation with the medical profession, we will draw up and regularly review a list of routine operations such as hip replacement for which all patients should expect treatment within our six month target.

    In consultation with District Health Authorities, we will agree allocations of extra resources, taking into account the numbers of patients from outside their area that Districts are already treating.

    The Vital Role of the Voluntary Sector

    In health and in many other fields of service the work of volunteers and voluntary organisations is vital: the Alliance sees no benefit in state monopoly, and welcomes the dedication, innovation and diversity which the voluntary sector can bring. We want a more stable framework for the voluntary organisations making them less dependent on short-term funding which can be misused by local councils and government departments as a means of exerting political control in the voluntary sector. We will:-

    • Expand opportunities for individual voluntary effort, giving young people, for example, the chance to volunteer full-time for a year without losing their social security entitlements and by linking existing voluntary groups with new initiatives;
    • Ensure that experience gained by volunteers is given proper accreditation to enable those without traditional qualifications to gain access to further and higher education;
    • Ensure adequate public core funding to enable voluntary organisations to take full advantage of tax concessions on payroll giving and individual donors;
    • Support services which advise voluntary organisations on how to develop their management skills and structures to ensure staff development and better service delivery;
    • Support and help to widen the network of Citizens Advice Bureaux, Law Centres and other legal advice services.

    ENDING POVERTY

    We can and will relieve many thousands of people from the burden of poverty.

    Poverty in Britain is getting worse. The Conservatives’ taxation and benefit policies have redistributed income from the poor to the rich, from people with dependent children to single people and childless couples, and from one group of the poor to another group of the poor. This is unjust and unacceptable. The Alliance will tackle poverty by targeting much higher benefits to those with the lowest incomes in relation to their needs. We will help families with children. We will improve benefits for the disabled and those caring for elderly and disabled relatives at home.

    Our proposals fall into two parts:

    • First, we will, over the first two years, improve the incomes of pensioners, families with children, the unemployed, disabled and carers. These improvements will be paid for in part from increasing public expenditure by a net £1.75 billion by the second year. The remainder will be paid for from increased tax revenues and from changes which will make the tax system fairer.
    • The second phase of our proposals will be a restructuring of the tax and benefits systems to create one integrated system which will be simpler and fairer.

    The Immediate Package

    PENSIONERS

    We intend to concentrate the bulk of extra spending on helping poorer pensioners with incomes on and just above the state retirement pension. We will increase the basic state retirement pension by £2.30 a week for a single person and £3.65 for a married couple. This will include the forecast update of the pension in 1988. For poorer pensioners we will introduce an additional benefit of £3.70 a week for single people and £5.75 for couples. This will increase the incomes of poorer pensioners in total by £6 per week (single person) and £9.40 per week (couple).

    We will introduce a Death Grant of £400, recoverable from the estate of the deceased, specifically designed to help pensioners with a small amount of savings feel confident that most of their, or their spouse’s, funeral costs will be covered by the Grant;

    We will require standing charges for gas, electricity and telephones to be abolished for everyone

    The £10 Christmas bonus has became hopelessly inadequate to meet the extra spending pensioners and widows face at Christmas.

    We will increase the bonus by paying a double pension in the first week of December. A single person will receive £39.50 and a married couple £63.25. The net cost will be £268 million.

    CHILD BENEFIT

    We will increase child benefit by £1 per child a week in the first year and by a further £1 per child a week in the second year.

    MATERNITY GRANT

    We will introduce a maternity grant of £150 for the first child born in every family and of £75 for the births of each subsequent child;

    FAMILIES IN WORK

    We will add £5 per week to the family credit due to be introduced in April 1968 as a replacement to family income supplement. These families will also gain from the extra child benefit. Unlike the Conservatives we will retain at this stage free school meals and milk for family credit recipients regardless of whether the families are in work or not; this will ensure equal treatment with families dependent on benefits.

    FAMILIES OUT OF WORK

    We will increase the family premium under the income support scheme by £5 per week and, in this first phase, we will increase the net amount per child received by income support families by £2 per child per week;

    SINGLE PARENTS

    We will increase the single parent premium for income support recipients by £1.10 a week, single parents will also benefit from the increased child benefit and, if their earnings are low, from the extra £5 on family credit. If they are not in paid employment they will benefit from higher family premium and the child additions.

    YOUNG PEOPLE

    The Conservatives’ benefit changes include setting a new low personal allowance for unemployed 18-24 year olds with a higher Personal Allowance for single people 25 and over. We do not support this discrimination based on age and we will abolish the 18-24 income support rate to ensure that all single people receive the same amount of benefit;

    LONG-TERM UNEMPLOYED

    We will establish a new premium under the income support scheme for the long-term unemployed without dependent children of £3.50 a week for a single person and £5 for a couple;

    SOCIAL FUND

    We will not place cash limits on the Social Fund and we will replace loans with grants. We will establish clear criteria of eligibility for special payments and a right of independent appeal and will ensure that the very poor receive extra money to cover heating costs;

    HOUSING BENEFIT

    We will not impose a 20% rates charge on those with very low incomes as the Conservatives plan to do from April 1988. We will not implement the Conservatives’ proposed cuts in the funding of Housing Benefit.

    The total gross cost of this immediate package over two years is £3.6 billion and the net cost is £1.75 billion, which will be met from our planned expansion of the economy. Part of the cost of the package will be met by changes to the tax system, and by starting to phase in independent taxation for married women.

    We will change the current personal tax allowances into a standard allowance worth the same value for all taxpayers and will not uprate the Married Man’s Tax Allowance. Pensioners’, Single Person’s and Wife’s Earned Income Allowances will continue to be uprated with inflation. We will confine Mortgage Tax Relief to the basic rate of tax, so that all taxpayers benefit equally from it at the same rate.

    PEOPLE WITH DISABILITIES

    The biggest handicap faced by people with disabilities is the barriers put up by the rest of us to their participation in society. The Alliance therefore supports measures which reduce the physical and attitudinal obstacles faced by those with disabilities and which enable all to enjoy as many as possible of the opportunities which are often taken for granted by the able-bodied.

    We believe that the majority of people with disabilities wish to live an independent life in the community and in their own home. In support of this we will:-

    • speed up the full implementation of the Disabled Persons Act 1986;
    • increase the income of people with disabilities who are dependent on benefits by £3.50 per week and provide additional financial support through our tax and benefit proposals;
    • ensure that ‘care in the community’, policies are properly co-ordinated and funded, unlike the current situation which has been described by the Audit Commission as resulting in “poor value for money and unnecessary suffering”;
    • tackle discrimination against disabled people through our proposed new Bill of Rights and the Human Rights Commission;
    • support the voluntary organisations of and for disabled people and ensure that they are properly consulted on matters which affect them;
    • ensure that the needs of disabled people are taken into account in housing, public buildings and by public transport operators. We would expand support for the specialised transport which can often be the key to independent living for people with limited mobility;
    • improve the provision of education for those with special needs, in colleges as well as fl schools, backed by a National Advisory Committee.

    People Caring for Dependent Relatives

    We will legislate through the Carers’ Charter for carers’ needs. We will replace Invalid Care Allowance by a more generous Carers’ Benefit.

    We will seek to improve the position of people with disabilities in our society.

    The Second Stage

    The next stage will be to implement our structural changes to the tax and benefit systems. We will replace income support and family credit by a new basic benefit for those in or out of work. Basic benefit entitlement will be gradually reduced as income rises. Child benefit will be payable to all alike, whether they are in or out of work.

    We will introduce legislation to merge the tax and benefits systems, and employees’ NICs with income tax at a high threshold. These structural changes will not come into effect until the second Parliament.

    In the meantime we will continue to freeze the Married Man’s Tax Allowance, and this extra revenue will enable us further to improve benefits for families with children, people with disabilities and carers.

    Our Longer-Term Objectives

    We will reform capital taxation to encourage wider distribution of gifts and legacies;

    Wider tax relief for savings, including savings directly invested in small businesses, ending the artificial distinction between income from earning and income from investment;

    We would move towards an equal and flexible retirement age for men and women giving everyone the right to retire at any age from 60 to 70, with a reduced pension for those retiring below 65 but protection for women currently approaching retirement at 60;

    We will aim to restore the link between pensions and average earnings, broken by the present Government, which will become more feasible if our plans to achieve growth while restraining inflation are given the chance to succeed.

    EDUCATION: THE ESSENTIAL INVESTMENT

    We will increase investment in education and training by an additional £2 billion per annum beyond that planned by the Conservatives by the fifth year.

    Britain lags far behind our main industrial competitors in the proportion of our people who receive higher education, further education and skill training. Basic research is seriously underfunded. As a result, industry lacks the qualified and skilled people it needs, and individuals are not given the chance to develop their potential.

    We aim:

    • To widen access to education;
    • To raise standards in schools;
    • To increase research;
    • To provide more effective training and skills.

    Our schools are in turmoil. The decision of the two largest teachers unions to conduct a series of strikes in protest at the removal of their bargaining rights by the Teachers Pay and Conditions Act, means another term of disrupted education for the children of England and Wales, with especially serious consequences for those taking public examinations this summer. Many of these pupils have suffered repeated disruption of their schooling over the past three years; they are innocent victims of other people’s actions.

    To continue with the current Government’s present policy, which would deny to the teachers negotiating rights for the next three years, cannot create the mutual trust between the teachers, the local education authorities and the Secretary of State that is essential to improved morale in the profession. Without an improvement in morale, pledges of higher standards are in vain; higher standards in the schools can only be achieved by a committed self-respecting teaching profession.

    The teachers unions have been divided among themselves on pay and conditions. That is why the Alliance urged earlier this year in the House of Lords that an independent review body should put forward recommendations as a basis for negotiation. That was done by the Main Committee in Scotland; after an agreed settlement, disruption ceased in Scottish schools.

    The Alliance believes that the Government should make it clear that teachers pay and conditions would be imposed for the current settlement only; and that an independent review body would be established to make proposals on teachers’ pay and conditions as a basis of negotiation. We understand and sympathise with the teachers’ anger at the removal of their negotiating rights. We would restore them. But the action by the teachers unions should cease. It does nothing to achieve their aims. It is damaging pupils’ education, is alienating public opinion and undermining the standing of teachers in the community. It is in no-one’s interest that it continues.

    Investing in Quality

    A national programme for raising educational standards – The Alliance TEN POINT PLAN.

    • ENCOURAGING PROGRESS
      We will require all schools, both maintained and independent, to publish indicators showing progress in academic results related to intake and social factors such as community involvement, truancy, and delinquency.
    • SETTING GOALS
      We will ask each school to set targets for improvement – in the case of maintained schools, in consultation with their local education authority.
    • ASSISTING IMPROVEMENT
      We will institute ‘special inspections’ of all schools which regularly fall below a certain level in terms of progress achieved.
    • REWARDING EXCELLENCE
      We will institute an annual ‘Queen’s Award’ for schools, to be judged by an independent panel of experts, for outstanding progress, teaching and curriculum innovation and success.
    • PROMOTING PROFESSIONALISM
      We will establish ‘teacher fellowships’ as one year awards to outstanding teachers.
    • SPREADING TECHNOLOGY
      We will develop Information Technology Centres as resources of technological expertise in collaboration with local colleges, polytechnics and universities and computing.
    • ENRICHING EXPERIENCE
      We will initiate a pilot project of summer schools, targeted on inner city children, to enhance performance across the curriculum; we will approach independent schools to participate and make their facilities available for these summer schools.
    • BOOSTING NUMERACY
      We will inaugurate a national numeracy campaign, backed by advertising and television.
    • INVOLVING PARENTS
      We will launch pilot projects for parental involvement in schools.
    • EMPOWERING PARENTS
      We will establish a ‘code of good practice’ for local education authorities including:

      • Parents having a voice on education committees;
      • LEAs publishing their policies on home/school links;
      • LEAs appointing an advisory officer with special responsibility for developing a closer partnership with parents;
      • The training of parent governors.

    The Alliance Plans:

    • To create a united Department of Education, Training and Science, and put local education authorities in charge of much of the local training work of the MSC;
    • To restore negotiating rights to teachers and to create a General Teaching Council to enhance professional standards, which will also be supported by more in-service training and appraisal to ensure that good teachers do not have to leave the classroom to become administrators n order to achieve adequate rewards and status;
    • To raise standards in schools through increased resources for books and materials, doubling teacher training in shortage subjects such as maths, science and computing, through special funds for innovation, through a stronger Inspectorate and through a broad and balanced curriculum established by consensus providing for a core range of subjects to be studied by all pupils but allowing for local needs to be reflected and innovation to be tried.
    • To make available one year’s pre-school educational experience for all children;
    • To develop the potential of each young person by the wider use of profiles and records of achievement, by discouraging early specialisation by reforming the A-level examination so that it covers a wide range of subjects over the arts-science divide, by positive action to encourage girls to take up subjects previously dominated by boys, and by seeking to build on achievements rather than merely penalising failure;
    • To enable schools to have full charge of their own budgets, as the Alliance has done in Cambridgeshire, ensuring that a fully representative governing body is accountable for making the most effective use of the available money;
    • To get rid of artificial divisions at 16 by taking steps towards a single system of education and training allowances, replacing the present arrangements which make YTS schemes more financially attractive than further study;
    • To develop tertiary colleges where local conditions are appropriate;
    • A crash programme to overcome skills shortages, with an expansion of training and re-training facilities under the guidance of local education authorities, giving representation to trainees in the management of schemes;
    • A training incentive scheme to encourage employers to increase their commitment to training; companies spending above a certain quota on training would receive a rebate;
    • To enable the long term unemployed to take up vacant places on further and higher education courses without losing benefit, with the student able to leave the course immediately a job becomes available;
    • To widen access to further and higher education by an immediate restoration of benefits taken away by the Tories, plus a 15% phased real improvement in student support.
    • To recognise that education is a life-long process, and that more people need to return to it at different stages of life either to learn new skills or to acquire basic skills; we will seek to make access to higher and further education for mature students easier and to strengthen those institutions which are specifically geared to their needs; the European Social Fund should be widened to help in this area;
    • To guarantee a period of free further education based on Open University levels of funding for everyone over 1 e to be taken at a time of their choice;
    • To restore confidence in our Universities, Polytechnics and Colleges by according proper
    • recognition to their value and increasing so far as possible the resources available to them, by expanding scientific research, which has been severely cut, and widening access. We will increase the number of students by 20% over five years as a step towards our goal of doubling the proportion of our young people going in to higher education by the year 2000. The higher education sector would have a major part to play in our crash programme to overcome skill shortages; we intend to create a Higher Education Council to co-ordinate the planning of both sectors of higher education; we support corporate status for Polytechnics but oppose the Government’s plans to bring them under national control;
    • Improved education provision for those with special needs, in colleges as well as in schools, backed by a National Advisory Committee;
    • We recognise and would uphold the rights of those who wish to pay for independent education in the private sector. We would phase out the Assisted Places scheme without affecting pupils already in the scheme, so that money which has been diverted from the state system can once again be used to raise the standards in state schools. We believe that charitable tax reliefs in private education should only go to genuinely philanthropic activities, and would review the workings of charity law with that object in view. We will encourage greater co-operation between state and independent schools.

    An Alliance for Young People

    The Alliance seeks to give young people the opportunity to shape their own lives and play a full part in their community. Our policies are designed to provide a platform for young people to speak out and to increase their financial independence.

    • We will build on the YTS to turn youth training into a fully comprehensive, high quality vocational and educational programme for 16-19 year olds;
    • We will offer a job guarantee for our young people who have been unemployed for over a year;
    • Our “Rent-a-Room” scheme will help satisfy the need, particularly among single, young people, for rented accommodation and will make it easier for them to travel to seek work;
    • We will abolish the 18-24 income support rate so that all single people will receive the same rate of personal allowance;
    • We will review the duties of local authorities to house the homeless and in the first instance will aim to give 16-18 year olds leaving local authority care, a statutory right to be housed;
    • We will get rid of artificial divisions at 16 by taking steps towards a single system of education and training allowances, replacing the present arrangements which discourage young people from continuing in full time education;
    • We will restore student benefit entitlements, make a 15% phased real improvement in student support, increase the number of full time equivalent students by 140,000 (20%) in five years and double the number by the end of the century;
    • We will reduce the age of candidature to eighteen to enable young people to take a full part in local and central government.

    GREEN GROWTH

    There cannot be a healthy economy without a healthy environment.

    We will take proper care of our environment.

    Under an Alliance government every aspect of policy would be examined for its effect on our environment, which we hold in trust for future generations.

    We will ensure Britain takes the lead in promoting sustainable economic growth and investment in new technologies designed to remove pollution and thereby create new job opportunities.

    The Alliance will set up a new Department of Environmental Protection headed by a Cabinet Minister who will be responsible for environmental management, planning, conservation and pollution control, and promoting environmental policies throughout government. Among the priorities of this department will be:

    • Powerful disincentives to polluters based on tougher penalties and implementation of a polluter pays” principle for cleaning up the damage backed by support for good practice;
    • The safest possible containment and disposal for industrial waste, with recycling wherever feasible;
    • Clean Air legislation setting new standards, with tough measures to deal with acid rain and an acceleration of the phasing out of lead in petrol;
    • Introducing a statutory duty for both private and public sector companies to publish annual statements on the impact of their activities on the environment and of the measures they have taken to prevent, to reduce and eliminate their impact;
    • Protection of the green belt round our cities.

    The Alliance is opposed to privatisation of the water authorities, which would hand over vital environmental responsibilities affecting rivers, sewerage, water quality, pollution control and fisheries to private hands. These functions should be restored to democratic control.

    Energy and the Environment

    We will institute an energy policy which meets the needs of industry and the domestic consumer and has full regard to the environment. Britain is in a better position than many other countries to do this because of the natural assets we have. Alliance energy policy avoids dependence on any single source of supply and is based on:

    • More prudent use of our oil and gas resources so that they are not depleted too quickly;
    • Continued modernisation and development of the coal industry, including new coal-fired power stations with measures to prevent acid rain and more help to areas affected by pit closures; the power to license coal mines would be transferred from British Coal to the Department of Energy to prevent abuse of monopoly;
    • Much more research and development work on renewable energy sources, including wind, solar, wave and geothermal energy; we will vigorously pursue proposals for tidal barrages such as those suggested for the Severn and the Mersey, subject to taking the environmental impact into account;
    • Far more effort into energy efficiency and conservation, including higher standards of insulation in homes and encouragement of Combined Heat and Power schemes; nevertheless there will need to be a programme of replacement and decommissioning for power stations which are reaching or have reached the end of their design lives.

    Existing capacity and planned coal-tired power stations are enough to meet our needs for some time to come and we see no case for proceeding with a PWR at Sizewell or other nuclear power stations at the present time. Safety must come first and after Chernobyl there is clearly a need for a wider investigation into the safety of nuclear power, and there is also a need for a thorough and independent review of the economics of nuclear power generation.

    We will continue research into nuclear fission power including research into the fast breeder reactor which may be needed if renewable resources prove to be less viable than we believe. We remain committed to the Joint European Torus (Jet) nuclear fission project.

    There is a serious problem concerning the disposal of nuclear waste, and further studies will be commissioned to solve the problem as satisfactorily as possible. We do not believe that this critical matter should be rushed and therefore advocate on-site storage until suitable methods which have proved to be safe are available.

    We would abide by the international convention (the London convention) which prohibits marine dumping of nuclear waste.

    The environment is under particular stress in two areas: the cities and the countryside. The Alliance is determined to protect and improve the quality of life in both.

    Improving the Quality of Life in the Inner Cities

    Our cities are in danger of changing from having been centres of initiative and activity in the past into industrial deserts, pessimistic about their future. The division and bitterness in Britain that Conservative neglect in central government and Labour control in local government have brought about are seen at their worst in our major cities.

    Urban neighbourhoods need to be no less distinct and individual than rural communities but the Labour and Conservative attitude has been to regard the city and particularly the inner city as one huge problem area and as a battleground for the class struggle. Those who live there know better and are appalled at the damage inflicted on the close, caring communities of the past.

    The Alliance believes that the strong city cannot survive without strong neighbourhoods. We have confidence in the ability of those who live in the inner city to renew their own communities, but they must be given the political and economic tools to do the job. Too many of the people who serve the inner cities in professional jobs live in suburbs remote from local problems.

    Through a partnership of the public and private sectors we would invest in housing, schools and the infrastructure to encourage those who work in the inner cities to live there.

    We will make attractive residential accommodation available and closer to the city centre to end the twilight ghettos that assist the mugger and the burglar.

    We will support opportunities for local people to work in their own community, to establish new businesses through local enterprise agencies and to train for needed skills.

    The Alliance will use the Urban Programme to establish community centres, enhance voluntary groups and assist tenants to manage their own estates.

    We will promote the establishment of elected Neighbourhood Councils with statutory parish status, where there is clear demand.

    Genuine law and order depends on communities supporting the police in preventing crime and being confident enough to end the anonymity on which criminal activity thrives.

    Renewing our cities and enabling urban communities to develop a real sense of stability and security is the only sound way of preventing and detecting crime.

    Protecting and Enhancing Our Countryside

    The Alliance seeks to provide better opportunities for those who live and work in the countryside, to check decline and depopulation, (especially of young people), to support small businesses and to encourage self-help solutions to rural problems.

    Our agricultural policies are designed to allow farmland to remain in use rather than being set aside. However, our planning strategy will allow for alternative land use which is in keeping with, and makes a sensitive contribution to the local rural economy.

    • We will give strong support to the Development Commission and COSIRA, in their efforts to promote local enterprise and to re-use existing buildings for these purposes. In regions where Development Agencies are set up they will promote a co-ordinated approach to the rural economy. Rural areas with severe economic problems should be designated to receive aid from the European Community regional fund;
    • We will encourage imaginative schemes to maintain essential facilities in the countryside such as rural transport, village schools, call boxes and sub-post offices, all of which have been threatened under the Conservatives; nationalised industries and privatised monopolies such as British Telecom should be placed under stronger obligations to recognise rural needs;
    • We will conserve our heritage of buildings;
    • National Parks, areas of outstanding natural beauty and green belts should be fully protected, with those who live and work in these areas having a full, democratic voice in planning policies and recognition given of the added problems they face;
    • Forestry policy should place more emphasis on broad-leaved species, and larger scale afforestation should be subject to a special system of planning controls;
    • We oppose the privatisation of the Forestry Commission.

    BETTER HOUSING

    Home Start

    Owning a home of one’s own is most people’s dream but not everyone can afford the high cost of taking the first step. We will open the door to home-ownership for thousands more the young and the not-so-young – to enable them to cope with the initial problem, buying a home, when their resources are most stretched.

    We will build on and considerably improve the existing Capital Home Loan Scheme with a tax credit of up to £1,000 for every new buyer. This will give first time buyers the benefit of lower monthly repayments at the start of their mortgages.

    All those eligible will have average incomes for the two previous years not exceeding £20,000 (joint) or £10,000 (single). A ceiling will be worked out, region by region, on the price of the home purchased, so as to exclude people rich enough to buy very expensive homes. We estimate this will cost around £50 million per annum once the scheme is fully underway.

    We will abolish Stamp Duty on house purchases for everyone participating in “Home Start”. Stamp Duty now stands at 1% on purchases priced at above £30,000. Abolition would be worth at least £300 and could in the south-east be worth £500 to a first-time buyer.

    We will take action to deal with homelessness and bad housing. Housing is a vivid example of the Conservatives’ cynicism. The Government decided the narrow rules restricting local housing powers, cut back the capital sums available and is now blaming the local housing authorities for the housing crisis such national decisions cause. In particular the restriction of spending on housing to only 20% of the money coming to local authorities from capital sales makes no financial or social sense. We will remove the restriction.

    • We will tackle the problem of homelessness;
    • We will give tenants more control over their environment and more choice;
    • We will provide more choices for private tenants;
    • We will give the elderly and disabled more opportunities to move to more suitable housing or to adapt their present homes;
    • We will stop housing problems from restricting economic opportunities – it is no use getting “on your bike” to find work if the only available jobs are in places where there is no affordable housing accommodation;
    • We will require each housing authority to draw up a housing strategy to determine what are the areas of need and how they can best be met working with voluntary organisation, housing associations, building societies and the private sector, as Alliance groups on local councils are already doing;
    • We will open up a new ‘partnership’ sector of rented housing funded by building societies and institutions with a central government contribution to keep rents at reasonable levels; these schemes would be run by their tenants as co-operatives with the support of local councils and Housing Associations. In the long run we want public support for housing costs to be even-handed between those who rent and those who buy;
    • We will target our housing assistance on those who most need it. We will promote mortgage schemes which can open up home ownership to a wider variety of people, such as index-linked mortgages and shared ownership; we will improve the availability of home improvement grants to homeowners to maintain the fabric of their properties for the benefit of the whole community;
    • We will retain the right to buy. We also wish to give local authorities enough discretion to deal with local housing shortages. Parliament must ensure that limits are set on such discretion to ensure that it is not used to deny the right to buy to tenants in general, and that anyone who is precluded from buying his or her present home is given the opportunity to buy another property on comparable terms through portable discounts;
    • We would restore to councils the right to spend the proceeds of council house sales on replacing and repairing housing stock;
    • We will insist on higher design standards in public housing, more and greater recognition of the contribution that good community architecture can make to the quality of life and we want investment directed at improving existing properties wherever justified rather than demolition;
    • We will incorporate rights for council tenants to control and improve their houses in a statutory tenants’ charter;
    • We will set up a national mobility scheme covering all sectors of housing;
    • Once more homes are available because of the Alliance’s housing strategy, we will extend the statutory duty of local authorities to provide for the homeless, phasing in extensions to the 1977 act beginning with single people over 40 and young aged 16-18 leaving care or who are otherwise homeless.

    Rent-A-Room

    There is a desperate need for rented accommodation, particularly for single people and couples. There are millions of owner-occupied houses and council houses in Britain with spare rooms.

    Many are deterred from renting by the present rentals red tape. Another crucial factor is to make it easier for people to travel to seek work. We will act to enable owner-occupiers and council tenants wishing to let a room in their own home to do so more easily, and to their financial advantage.

    Rental income up to £60 per week will not be subject to income tax or capital gains tax.

    We will legislate to invalidate clauses in mortgage contracts or local authority letting contracts that prohibit such lettings.

    Re-possession of such rooms will be made easier.

    The “Rent-a-Room” scheme will be restricted to owner-occupier, council tenants, or tenants of housing associations, letting a maximum of two rooms in their home.

    The rent will be determined by the market, but only rental income up to a total of £60 per week will be disregarded by the Inland Revenue.

    We will legislate to impose a duty on local authorities to issue and regularly review licences to approved agencies, such as housing associations, housing aid centres, or commercial agencies, in their area to operate the scheme. Such agencies will enter into contracts with both landlord and tenant, and will be responsible to the landlord for ending any tenancy arrangement within a fortnight. Court procedures will be speeded up to ensure that possession in all genuine cases is obtainable in that time.

    The “Rent-a-Room” scheme will benefit many people.

    First, it will help single people and couples, particularly the young, and those moving in order to get work to find suitable accommodation, where at the moment it is both scarce and expensive.

    Second, it will help owner-occupiers, including elderly people, to increase their income, to assist with mortgage repayments or with the maintenance for their homes; it should help some young families to be able to afford to become home owners for the first time.

    Home Income Plan

    For many elderly people their only capital is their home and they do not have a regular income. Elderly home owners on low incomes, in fact, are becoming one of the most deprived sections of the community. The proportion in low standard homes is double that of the population as a whole and many others in good homes are short of spending money.

    To enable Britain’s elderly home owners to live more comfortable, independent and happier lives we will introduce a tax-assisted Home Income Plan. It will significantly increase their income or provide money for essential house expenses and repairs.

    The Home Income Plan will enable them, if they choose, to unlock the capital value of their homes to meet their need for more income now

    They will be able to take out a mortgage on part of the value of the house and use it to buy an annuity providing regular income. The interest on the loan will be added to the capital sum so that neither interest nor capital need be repaid during the borrower’s lifetime.

    Although several leading building societies and life assurance companies offer home income plans at present, they are of limited value because the interest has to be paid gross after the death of the borrower. Yet tax relief is allowed if the borrowers reduce their income by repaying the interest during their lifetime. Neither method gives really fair value and so only 25,000 home income plans have been taken out.

    We will make Home Income Plans a really worthwhile benefit for older people by allowing them to postpone the interest payments and qualify for tax relief when the interest is finally repaid. This could, on life assurance industry calculations give an 80% boost to the income of a woman in her 70’s.

    Tax relief for pensioners aged 70 or over who take out Home Income Plans would cost less than £40 million, assuming a 70% take-up. The cost would take time to build up and would not be incurred all at once.

    TRANSPORT

    We will maintain public transport.

    Wider car ownership has improved the quality of life and enhanced the freedom of millions of people, which we welcome; at the same time, transport policy has to deal with the problems of congestion and road safety, which arise from busier roads, and has to ensure adequate public transport for those who do not have access to a car, including many women, young people and the elderly. While so many people have greater freedom of travel than ever before, significant minorities now have significantly less opportunity to travel than previously, especially in rural areas and some outlying housing estates.

    The Alliance believes that:

    • Deregulation of bus services under the Conservatives was botched. Bus services could only survive if they paid for themselves, leaving many elderly people and single-parent families isolated in their own homes. The Alliance supports comprehensive competitive tendering for a network of necessary bus services, with local councils involved in planning and financing them. This combines greater enterprise and new ideas with more care for deprived groups and areas. Local councils and transport authorities should use their subsidy powers to ensure that essential services are maintained and that public transport in cities is attractive enough to reduce congestion resulting from commuting by car;
    • We will undertake a major renewal of road, rail and port infrastructure as part of our programme of measures to tackle unemployment; we will build more by-passes and a designated national heavy lorry network to get more of the vehicles out of the towns, villages and residential areas;
    • We will support investment in our rail network both to encourage the transfer of freight from road to rail and to ensure that the nations and regions of Britain all share in the economic advantages of the Channel fixed link.

    The Conservative Government has presided over a decline in our merchant fleet which threatens our national economic and security interest. We would entrust the lead role in co-ordinating maritime policy to a senior member of the Cabinet; and we would seek to help the industry through the present crisis by positive financial support and a determination to ensure fair play in world shipping markets.

    ARTS, BROADCASTING AND RECREATION

    We will ensure that people have the opportunity to enjoy the arts and physical recreation and to develop their own potential through these activities. To help achieve this aim we will double arts funding within the lifetime of one Parliament.

    The Alliance will set up a unified Ministry, headed by a Cabinet Minister, to have responsibility for the arts, broadcasting, films, publishing, leisure and recreation – these activities are at present scattered amongst Ministries within which they are of minor significance and are subject to control rather than enhancement;

    We will further decentralise funding for the arts, channelling it through enhanced regional arts associations and the Scottish and Welsh Arts Councils;

    Wherever possible we will replace grants with endowment trusts providing greater stability and independence for the arts with a mix of public and private funding;

    We will co-operate with artists to achieve better deals through stronger copyright and public lending right laws;

    We regard the BBC World Service, the British Council and the provision of educational facilities for overseas students as very effective cultural ambassadors and we will ensure that increased funds are available to carry out that task;

    We will secure the maximum access to sports facilities for the whole community.

    ANIMALS

    We will strengthen the protection of animals.

    A civilised society treats animals with care and compassion. An Alliance Government will therefore set up an Animal Protection Commission which will considerably improve control over the welfare of animals in laboratories, farms, zoos, slaughter houses and circuses, as well as domestic and wild animals, and at a reduced cost, by unifying all existing Government responsibilities in this field. The Commission will be given extensive powers to advise, inspect and enforce legislation, and to review the effectiveness of existing legislation to deal with cruelty, in particular police entry powers and the power of the courts. The Commission will include fair representation from animal welfare organisations as well as users.

    BRITAIN, EUROPE AND THE WORLD

    The Alliance will ensure that Britain’s foreign and defence policies help to bring a fairer and safer world. The things we want to achieve n our own country will not be possible unless we co-operate with other countries to achieve a fairer and safer world. Our concern that people should have basic human rights and a decent life cannot stop at the Channel. The huge public support for famine relief, the vigorous public debates on peace and defence and the public compassion for those suffering from oppression in many parts of the world refute the narrow-minded view that world affairs are not an election issue in Britain.

    Our Aims

    The Alliance is firmly internationalist. Opportunities for international co-operation have been thrown away by the Governments of the post-war years, when Britain needed to develop a new role and new relationships in a changed world.

    We see the future of the United Kingdom as being bound up with the future of the European Community. As an enthusiastic and committed member of that Community Britain can significantly influence political and economic decisions.

    Britain is also a member of the Commonwealth and should be using that position to develop concerted policies on eradicating hunger and on issues such as South Africa and Namibia, yet Mrs. Thatcher has made such agreement impossible and treats respected Commonwealth leaders with disdain.

    Britain should take the lead in seeking international agreement on selective, targeted sanctions, backed by help for the Front Line States, as a means of increasing the pressure for an end to apartheid n South Africa.

    Britain should have a sufficiently mature relationship with the United States for the British Prime Minister to make clear where British foreign policy departs from that of the President of the day. The British Prime Minister should disavow such ventures as the bombing of Libya and support for the Contras, as so many Americans do, rather than allying with the most conservative forces in the White House.

    On defence and disarmament, Britain should be firmly committed to the achievement of multilateral disarmament and firm in our acceptance of our responsibility towards collective security through NATO: the Alliance rejects the one-sided approach which characterises both the escalation of our present nuclear capacity through Trident and Labour’s decision to remove all nuclear weapons from British soil without securing the removal of those weapons which could threaten us.

    The Alliance believes that Britain should take a lead in seeking international efforts to tackle the basic problems of the poorest countries of the world, particularly the burden of debt which is crippling their efforts to feed their own people and the need to get a fairer system of international trade which is not biased against the poorer countries.

    Europe

    The European Community must be the basis of a united Europe which has common policies on trade, technology and social policy, and encourages Europe’s scientific and industrial development. We believe Labour’s negative attitude to the European Community, and the obstructiveness of Mrs. Thatcher’s Government, not least in vetoing the proposed European Community programme for co-ordinated research and development, is short-sighted and unconstructive. In a world of super-powers, Europe has to speak with a united voice.

    The Alliance would:-

    • Ensure fair elections to the European Parliament by proportional representation to give proper rights to the people of this country;
    • Seek reform of the Community’s political institutions so that the bureaucracy is properly accountable to the European Parliament, and that the Council of Ministers shares power effectively with the Parliament;
    • Work for reform of the Common Agricultural Policy so that it no longer dominates the Community budget, and to develop Community policies on regional development, social and employment issues;
    • Support European initiatives to put effort and resources into developing advanced technology; we would accept the negotiated European Community co-ordinated research and development programme;
    • Make it easier for companies to sell throughout Europe;
    • Extend the common rights of citizenship in Europe.

    Global Co-operation

    An Alliance Government will:

    • Increase British support for the United Nations, develop its capacity for peacekeeping, restore Britain’s membership of UNESCO and increase British backing for the UN agencies such as the High Commission for Refugees;
    • Develop Commonwealth and European co-operation on a wide range of issues, including sanctions against South Africa designed to increase pressure for an end to apartheid and peaceful change before war becomes inevitable; we are also determined to end South Africa’s illegal occupation of Namibia;
    • Increase efforts through international co-operation to deal with the threat of terrorism.

    Peace and Security

    We will promote disarmament while maintaining sound defence.

    Everything we prize most highly could be threatened by the destruction of our freedom through armed intervention or threat, or by the destruction of a world which now contains a massive arsenal of nuclear weapons. But at long last there is now an opportunity to halt the arms race. The Alliance is determined to combine sound defence against any possible threat with determined efforts to reduce and even remove the massive nuclear stockpile, which causes increasing anxiety to the peoples of the world. New opportunities for arms agreements are being opened up by the changed priorities of a new Soviet leadership: we cannot afford to assume that this new and welcome trend in Moscow will continue unchecked, but at this delicate and hopeful stage it is vital that we have a British Government determined to seize the opportunity to drive sensible bargains on arms control which are secure because they are seen on each side as being realistic. Britain cannot defend itself or the values of western democracy alone, just as it cannot achieve international disarmament solely by its own actions: both the other Parties have chosen in different ways to ignore the reality that our defence and disarmament efforts are interdependent with those of other countries.

    The Alliance is committed to NATO, and we accept the obligations of NATO, including the presence of Allied bases and nuclear weapons on British soil on the basis of clear arrangements for a British veto over their operations including where appropriate, dual-key systems; we believe it is essential to strengthen the European contribution to NATO.

    The Alliance welcomed the outline agreement discussed at Reykjavik to remove all intermediate nuclear weapons from Europe, and Mr Gorbachev’s later acceptance that such a deal should not be linked to the future of the US Strategic Defence Initiative; The Alliance believes that this must be only the first, vital step in a continuing process which will include both shorter-range nuclear weapons and conventional forces.

    The Alliance would withdraw UK support for President Reagan’s Strategic Defence Initiative, which clearly involves breaching the ABM Treaty, is destabilising and is likely to lead to further escalation.

    We will seek to revive negotiations on a Comprehensive Test Ban. In the meantime Britain should itself ban nuclear weapons testing and should encourage the US to do likewise.

    We would seek a battlefield-nuclear-weapon-free zone in Central Europe extending 150km in each direction from the East-West divide.

    We believe that NATO relies too heavily on nuclear weapons at all levels for deterrence. A strengthened European pillar, involving effective defence co-operation and improved conventional strength would better enable Western Europe to move towards the elimination of dependence on first use of nuclear weapons. NATO should adopt strategies and weapons which are more self-evidently defensive in intent and which are concerned with minimum deterrence.

    We want to see a new initiative achieve Mutual and Balanced Force Reductions and we would be prepared to include Britain’s nuclear weapons in disarmament negotiations.

    We would continue Britain’s efforts to achieve a multilateral treaty prohibiting the manufacture, development and possession of chemical weapons. In the meantime, we would oppose any manufacture of fresh stocks of chemical or biological weapons.

    In government we would maintain, with whatever necessary modernisation, our minimum nuclear deterrent until it can be negotiated away, as part of a global arms negotiation process, in return for worthwhile concessions by the USSR which would enhance British and European security. In any such modernisation we would maintain our capability in the sense of freezing our capacity at a level no greater than that of the Polaris system. We would cancel Trident because of its excessive number of warheads and megatonnage, high cost and continued dependence on US technology. We would assign our minimum deterrent to NATO and seek every opportunity to improve European co-operation on procurement and strategic questions.

    We would seek to reduce the flow of arms to areas of conflict and to ensure that arms from Britain are not supplied to repressive regimes, particularly for their internal security operations.

    Shared Earth

    The Alliance will:-

    • Increase the share of Britain’s GNP which goes in development aid, which has gone down from 0.52% to 0.33% under the Conservatives, so that we reach the UN target of 0.7% by the end of a five-year Parliament;
    • Concentrate aid on raising the living standards of the poorest through more rural development, environmentally sustainable resource use, promotion of self-sufficiency, recognition of the role of women, appropriate technology, training and education, making full use of experience and expert voluntary agencies;
    • Seek to increase awareness of development issues through more resources being devoted to development education;
    • Change the situation in which many poor countries pay more in debt repayments to rich countries than they receive in aid by seeking international agreement on debt rescheduling and cancellation;
    • Combine the Aid-Trade Provision and the Overseas Development Administration’s “soft-loan” facility with the Overseas Projects division of the Department of Trade and Industry and the Export Credit Guarantee Department into one division of the DTI – help to British industry will no longer be taken from the aid budget.

    CONCLUSION

    The Alliance came into being to achieve these things. From three sources came the political ideas and momentum which are now carrying the Alliance forward. One was Liberalism, a long and honoured political tradition from which we draw not only the philosophy of individual freedom but also a record of achievement in the establishment of the modern welfare state and the championing of local communities. The SDP combines a commitment to social justice and ending poverty with a dynamic approach to wealth creation and its leaders have extensive experience of government. A third element, which has ensured that the strength of the Alliance is infinitely greater than the sum of its parts, is the support of those who have never before been members of a political party, because no party seemed to offer them the chance to realise their aims. Their numbers continue to grow.

    The Alliance is therefore different. It involves two political parties working together, and taking along with them the great mass of people who are dissatisfied with the politics of recent years, the kind of politics which is so dismally displayed in the shouting match of the House of Commons at Prime Minister’s Question Time. All political parties involve compromises between different views and different strands of opinion – the Labour and Conservative parties each embrace an enormously wide range of opinion. But for them the spirit of compromise, if it operates at all, has to be concealed, kept within the party and denied in public. We make no secret of the fact that our programme draws on the ideas of our two parties and that we are keen to work together to achieve shared goals. Like the others we seek to put our entire programme forward for endorsement and to form a majority Alliance Government, but unlike the others the whole approach of the Alliance underlines our belief that if we are in a balanced Parliament we must heed the message of the voters and work with the other parties to seek an agreed programme which commands the widest possible support.

    The Alliance is different also because it is not the voice of any one section or interest. It is not paid for and controlled by the trade union movement, as is the Labour party, and it does not have the massive dependence which the Conservatives have on the City and big business. These links make each of the other parties powerless to reform their own institutional backers and incapable of understanding or winning the confidence of their institutional opponents. The Alliance has a capacity to be fair which is based on its independence and on the breadth of its support, typified by the fact that we have been able to win by-elections in the heart of the countryside in a former Conservative stronghold in Ryedale and in a former Labour stronghold in Greenwich, both seats now held by Liberal and SDP women MPs.

    The Alliance is different in another respect. It is not merely seeking to become the elected government of the country, but to overhaul the system of government so that all future governments, of whatever party, are based on real public consent and full participation in an open society. Our intention is not simply to get into the driving seat but to re-design the vehicle. Once the Alliance has reformed the voting system, no future government will be awarded the power of a majority without the support of a majority of the people, and no kind of extremism, whether of the left or of the right, will be able to get in through the back door. Not only that – if we find ourselves exercising power in a Parliament with no overall majority, we guarantee that we will use that power to block extremism and to fight for the kind of reforms which make sure that governments cannot push people around and individuals have the opportunity and the means to achieve their full potential.

    The Alliance is different too, in its belief about the nature of society. Our aim is a civilised society in which individual freedom goes hand-in-hand with care for others. Individual freedom is central to our beliefs, but if it is not accompanied by social responsibility it becomes freedom only far those who can afford it, or the survival of the fittest. But when society as a whole tries to meet human needs it must respect individual choice and be aware of the dangers and limitations of state provision, otherwise there will be no freedom, and public services will be both inhuman and inefficient. Declining public services and the inhuman scale of organisations like the DHSS and the big council housing departments have contributed to a widespread feeling of apathy and despair, and many young people in particular feel that this society has no place for them and does not want to listen to them. Government must work in partnership with people, enabling them to use their own organisations, their own local communities and their own skills, and giving them effective democratic control over those services which can only be provided by the community as a whole. Our society is one that recognises that the arts are not an optional extra, to be grudgingly afforded when the economy is booming, but play an essential part in meeting the wider needs of individuals and in broadening the vision of communities. Our aim is a society in which values other than the purely economic are recognised and valued. Our society is one that recognises the importance of the environment in which we live – even those who are successful do not want to live in a shoddy society whose values are dominated by greed and selfishness. We recognise the crucial need to live in harmony with our environment and we will support those developments in our industrial and social activities which are environmentally enhancing and benign. We aim to join the nations which lead the field in environmental protection instead of trailing amongst the last,

    The Alliance is also different in being concerned about both unemployment and inflation. The Conservative Party concentrates all its attention on inflation and ignores unemployment and its consequences. The Labour Party concentrates all its attention on unemployment and ignores the fact that increased inflation undermines expansion and inevitably puts brakes on efforts to get people back to work. We must have sustainable growth. That is why our proposals for expanding the economy are accompanied by plans for an incomes strategy and for a firm monetary and exchange rate discipline through entry to the exchange rate mechanism of the European Monetary System. But in the long term we will only succeed if we give the top priority to industry. The service and manufacturing sectors of industry are mutually dependent, but manufacturing industry has been devastated in recent years. We believe it is the engine of growth and our competitors in Japan, in Germany and in the US demonstrate that only too well,

    Much of what the Alliance wants to do to ensure basic standards in the public services and to encourage people to find new ways of caring for one another depend on achieving success through our economic and industrial policies, which are designed to enable us to achieve greater prosperity. Some of what we want to do will have to wait until we have earned the resources with which to do it. We are not prepared to enter an electoral auction seeing who can make the largest bids to spend money which is not there and will not be there unless taxes and borrowing are increased to unreasonable and imprudent levels. Investment in industry and particularly in new and high technology industry is the key to creating the wealth we all want. We deplore the way in which windfall benefits such as oil revenues and the proceeds from privatisation have been frittered away instead of being used to enhance the basic fabric of our society.

    The other parties know that the Alliance is different, and they fear it, even to the extent of burying their own fundamental disagreements with each other so as to co-operate against us. In the House of Commons they have voted together against electoral reform, and against some of the measures designed to put trades unions fully under the control of their members. They work with each other in an attempt to preserve the appearance of a two-party system long after it is dead: Conservatives carefully protect Labour’s privileges in the House of Commons to ensure that latterly only Labour and Conservative working peers have been appointed to the Lords, in vain hope of silencing the Alliance voice. We do not rule out the possibility that after the next election there could be an informal “Lab-Con pact” to keep the Alliance out, as there has been on several local councils: it would be the old parties way of attempting to stagger on as if nothing had happened after the two-party system had suffered a shattering defeat. Indeed we believe that Labour and Conservative supporters should now be asking their candidates “In a balanced Parliament will you work with the Alliance or with our traditional opponents?”

    That is why our prime aim is an Alliance majority government, an aim that can certainly be realised at this election. Indeed, such are the absurdities of the voting system that quite small increases in Alliance support can make the difference between fifty Alliance seats and three hundred. If we get that majority we will at once set out to reform the system which produced it. Our commitment to fair elections is clear. We are the only political grouping who, if given a majority, would use that majority power forthwith to reform the system under which we gained it. But we will also be able to get on with the job of bringing down unemployment while managing the economy on a sound basis so as to prevent inflation from increasing dramatically again. We will be able to embark on immediate improvements in basic services like education and health, while we open the way to the longer-term proposals in these and other fields which will give people more chance to realise their full potential and build a caring community. We will be able through our tax and benefit proposals to improve the lot of those who now find themselves on or near the poverty line. We will be able to make the conservation of the environment a priority of government, and pay special attention to the needs of cities and countryside. We will be able to house many of the homeless through more imaginative housing policies involving partnership between public and private housing. We will pursue policies on defence and foreign affairs which will make Britain a force for good in the world, recognising our interdependence with other nations.

    All this is possible, and our Joint Programme sets out the main steps we will take. These aims and values are also a clear guide to the way we would use the power we had if no party had an overall majority. We would insist that the views of the substantial section of the electorate who had voted for us went into the process by which the programme of a new government was decided. If other parties seek to cheat the electorate of that right, we shall seek to bring the matter back before the voters as soon as possible. We are not prepared to see the views of so many voters ignored any longer.

    Alongside this Programme for Government the Alliance is publishing manifestos for Scotland and Wales, setting out our policies on those issues which we believe should be dealt with by devolved power.

    An Election of Opportunity

    We believe that our priorities are right, that our proposals are practical and that our values are those which are most urgently needed in the government of this country. We make no claim to have a monopoly on good ideas. We seek from the voters the chance to give back to them the power and the opportunities which are rightly theirs. Their time has come.

  • General Election Manifestos : 1987 Labour Party

    General Election Manifestos : 1987 Labour Party

    The 1987 Labour Party manifesto.

    Britain will win with Labour


    INTRODUCTION

    BY THE LEADER OF THE LABOUR PARTY

    Every election is a time of decision. But this General Election on June 11 faces the British people with choices more sharp than at any time in the past fifty years.

    The choices are between Labour’s programme of work for people and Tory policies of waste of people: between investment in industrial strength, and acceptance of industrial decline; between a Britain with competitive, modern industries, and a Britain with a low tech, low paid, low security economy increasingly dependent upon imports.

    The election will decide whether we and our children are to live in a country that builds high standards of care for all who need treatment for illness, pensions in retirement, good grounding in education, fair chances to get on; or in a country where the Conservatives go on running down the vital health, education and social services of every community, imposing higher charges and lower standards.

    This election will decide whether our country is to be a United Kingdom or a divided kingdom; one that is brought together by proper provision, prudent investment and concern for the interests of the whole nation, or one that is pulled apart by poverty, cuts, increased privilege for the richest and neglect for the rest.

    This election will decide whether we put our resources into the real defence provided by a modern, well-equipped army, navy and airforce safeguarding our country an d supporting NATO; or spend those sums on maintaining an ageing system of nuclear weapons, while buying a new generation of missiles which cannot give our country effective defence. It will decide whether Britain is part of the international process of nuclear build down or ruled by a government uniquely intent upon nuclear build-up.

    We already know what a third term for Mrs Thatcher would mean for the people of Britain.

    Under the Tories there have been:

    Eight years of record unemployment, relentless industrial closures and redundancies, of flooding imports and shrunken investment.

    Eight years of the highest ever tax burden on the family and the nation as VAT, National Insurance, rates and fees have all been put up in a shift to taxes on spending and employment.

    Eight years of cuts and closures and charges, of intensified means tests and reduced services.

    Eight years of increased state control, of centralising government of abolition of rights of representation and negotiation.

    Eight years of rising crime, of greater insecurity on the streets and housing estates and in the home.

    Eight years of meanness towards the needy in our country and towards the wretched of the world.

    Eight years of growing division – in health in opportunity. in housing conditions in work and in income – between regions communities classes. families, white and black, rich and poor.

    The Tories say they are ‘proud of their record’. So proud indeed that they would want to do more of the same if they were re-elected.

    Their plans for a poll tax would penalise millions of families, pensioners and young people. Their refusal to provide the resources needed for the Health Service and their plans for imposing further payment and privatisation will hit everyone in the service and everyone needing to use it.

    They would, if they won power again, privatise water, electricity, steel and other services, and industries built up by public investment over past years. They want to impose penal increases in rents for private and public tenants. They are committed to introducing compulsory labour for young unemployed people.

    All this and worse would come with a third term of Tory government.

    Britain cannot afford more of that run-down, sell-off and split-up, nor all the costs and waste that they bring.

    Britain does not have to.

    Britain can stop the rot – but only by voting Labour.

    There is no other way to prevent thirteen years of Thatcherism.

    No party other than Labour can possibly win enough seats to form a government.

    The Liberals and SDP know that. Their hope is to profit from confusion. To divide the non-Conservative vote in such a way as to make them the ‘hook’ in a ‘hung’ Parliament and have power far beyond their responsibility.

    And, while one of their leaders clearly favours an arrangement to sustain a Conservative government, the other hasn’t the strength to stop him.

    That offers no way ahead for a nation that needs to get on with investing for change, for quality, for confidence in the future.

    Proper support for education, strengthened research and development and long-term, low interest finance for industrial growth are all essential if Britain is to gain the vitality necessary to outpace competitors who have been building these assets for years.

    They are essential too if we are to generate the wealth needed for the security, care and opportunity fundamental to the individual freedom of women and men of all ages and origins. When our country faces the common pressures on the environment, the common dangers of crime, the common costs of unemployment, under-investment and under-performance together, our country has every commonsense reason to meet those challenges together.

    That is democratic socialism in action. And just as a family uses its combined spirit and resources to overcome crisis, so Britain can once again make common cause to achieve common good.

    Only a Labour government can give that lead. Only we are committed to such concerted action. Only we believe that the whole nation should win and can win.

    That is why Britain will win, with Labour.

    Neil Kinnock


    BRITAIN WILL WIN

    Britain is crying out for change. Only a Labour government can bring it about.

    Mending divisions, building new strengths will need determination and realistic priorities.

    Commonsense and the common interest require that the Tory philosophy of selfishness and short-term gain is replaced by the democratic socialist philosophy of community and caring, of investment in people and in production.

    We must as a priority tackle the immediate tragedy and waste of unemployment. We must commit resources to modernising and strengthening the industries and services that earn Britain a living. We must ensure the continuity of expansion that is necessary for a lasting economic recovery.

    That is our strategy.

    It begins from the understanding that people are Britain’s most precious resource. It is rooted in the confidence that, with the right skills, the right equipment and the backing of a government that is committed to encouraging enterprise and innovation, Britain’s people can make our country more efficient, more competitive and more socially just.

    It is a message of hope and confidence – the alternative to the divisive and dictatorial approach of the Conservatives.

    We do not believe that everything could or should be done by government. But we know, from our own history and from the example set by our competitors, that national economic success cannot be achieved without government.

    Britain will win with a Labour government that invests to enable people to use their abilities and to stimulate modern training, research, development, production and marketing. These are the ingredients of economic vitality, and the foundations of fairness.


    THE PRIORITY PROGRAMME

    For our first two years in government we Will concentrate resources on the essential tasks of combating unemployment and poverty In the course of that action, we will strengthen the health, housing, education, social services and crime-fighting services that are vital to social and economic well-being, and begin to rebuild our manufacturing industry.

    Clearly, all other programmes that require substantial public finance must take lower priority in terms of timescale and public resources.

    THE JOBS PROGRAMME

    Immediately after the election the Labour Government will call together a National Economic Summit to assess fully the condition of the economy and set the recovery programme in motion – producing the jobs that need to be done by people who need to do them in a country that wants them done.

    The Summit will establish the first stage of the National Economic Assessment. This will identify the concerted action that will need to be taken by government, employers in the private and public sectors and trade unions to increase investment, contain inflation and achieve sustained recovery.

    We will reduce unemployment by one million in two years as the first instalment in beating mass unemployment.

    Half a million jobs will be generated in private industry and in the public sector by the repairing and building of the houses, the hospitals and schools, the transport improvements and sewers that the nation needs. This will be achieved by public investment and by reducing employers’ National Insurance contribution in targeted areas.

    Another 360,000 new jobs and training places will be created. These will provide new skills for young people and adults – with proper opportunities for women.

    A further 300,000 new jobs will improve the health and education services and the neglected community and caring services. The depleted customs services will be strengthened in the fight against drugs. The revenue and benefit departments will be staffed to increase efficiency.

    We will extend the voluntary Job Release Scheme to men over 60 so that those who want to retire early vacate jobs for those who are currently unemployed. This could take as many as 160,000 people out of unemployment and into work.

    THE ANTI-POVERTY PROGRAMME

    The spread of poverty in the past eight years has stained the whole nation, and widened misery and disadvantage amongst old and young. Much of it is the result of deliberate government policies. Millions of poor people endure it in despair. Millions who are not poor regard it as a disgrace. The Labour government will combat poverty directly.

    We will immediately increase the single pension by £5 a week and the pension for a married couple by £8, as the first step in re-establishing a link between pensions and average earnings or living costs, whichever is the most favourable to pensioners. We will begin the abolition of the TV licence fee for pensioners.

    We will provide pensioners on supplementary benefit and others on low incomes with a £5 winter premium to help with fuel bills. We will begin discussions with the fuel industries with a view to phasing out standing charges.

    We will fully restore the State Earnings Related Pension Scheme as part of the process of achieving our objective of a pensions level of one-third average earnings for single people and half average earnings for married couples.

    We will restore and increase the death grant.

    We will increase child benefit by £3 a week for all children, raise the allowance to the first child by £7.36, and increase one- parent family benefit by £2.20.

    We will restore and increase the maternity grant.

    We will start to phase in a new disability income scheme and provide resources to give special support to young people with disabilities. Our special Minister for the Disabled will be put in charge of our programme for the disabled.

    We will extend the long-term supplementary benefit rate to the long-term unemployed.

    We will implement a comprehensive strategy for ending low pay, notably by the introduction of a statutory national minimum wage. This will be of particular benefit to women workers, and will help lift families out of poverty.

    THE ANTI-CRIME PROGRAMME

    We will introduce crime prevention grants for home-owners and tenants.

    We will work with the police to get more police on the beat. Uniformed police officers will be relieved of non-law-and-order tasks which take them away from crime prevention, pursuit and detection.

    We will reverse the Tory cuts in the number of those who can claim criminal injuries compensation. We will give the Criminal Injuries Compensation Board more staff to cut the all-time record 64,000 queue awaiting compensation.

    PAYING FOR THE RECOVERY PROGRAMME

    These immediate programmes will cost £6 billion a year net for the first two years. We will pay for them by:

    • Putting directly into generating 300,000 jobs the money that would be used up by the Thatcher government on its 2p income tax bribe.
    • Adopting the same practice as most successful industrial countries and companies, by prudently borrowing £3 billion for useful wealth generating national investment.

    We will reverse the extra tax cuts which the richest 5 per cent have received from the Tory government and allocate that money instead to the most needy. We will also bring forward other reforms to capital taxation – including the introduction of a wealth tax, which, whilst applying to only the wealthiest one per cent of the population, will, over the years, bring a significant contribution from those in our society best able to pay.

    CHANGES WITHOUT CHARGES

    Apart from legislating where necessary for the Recovery Programme, the new Parliament will swiftly enact many other worthwhile measures. These will cost little to implement but produce significant improvement in the quality of administration, provision and response to the needs of ordinary citizens.

    They will include:

    • A Minister for Women, with a place in the Cabinet.
    • A Freedom of Information Act, to be accompanied by the repeal of Section Two of the Official Secrets Act.
    • Parliamentary scrutiny of the Security Services.
    • Appointment of an Education Ombudsman.
    • Appointment of an Ombudsman for Police Complaints.
    • An Energy Efficiency Agency to co-ordinate conservation programmes for domestic and industrial energy users.
    • A new Ministry of Environmental Protection.

    PROGRAMME FOR A FIVE-YEAR PARLIAMENT

    Labour’s Programme for Recovery will be the start of a strategy for a full Parliament. We have to halt the decline in manufacturing industry, not only to generate jobs and increase our world trade share but to create the wealth to finance the rescue and expansion of education, health, housing and the social services.

    NEW STRENGTH FOR INDUSTRY

    For eight years British industry has been left to drift and decline Our oil revenues have been wasted and the City has concentrated upon short-term movements of capital at the expense of British manufacturing industry. The huge capital outflow of £110 billion since 1979 is ruinous evidence of the Tories’ lack of concern for the strength of the British economy.

    Labour is committed to rebuilding our industrial base. Our country must make the best use of computers and information technology to develop the modern means of making a living as the oil runs down and the pressures of technical change and international competition intensify.

    We will:

    • Establish a capital repatriation scheme using the tax system to attract and retain British savings and investment in Britain.
    • Set up the British Industrial Investment Bank, with strong bases in Scotland, Wales and English regions, to ensure finance for industry where it is needed, when it is needed and on terms which encourage long term development.
    • Implement a dynamic and properly funded regional policy. This will include the establishment of Regional Development Agencies (starting with the North, North-West, Yorkshire and Humberside); the promotion of local and regional enterprise boards; greater scope for local authorities to participate constructively in economic development; and creating high technology innovation centres throughout Britain.
    • Create a new Ministry of Science and Technology to promote a major increase in research and development.It will co-ordinate the activities and budgets of government departments involved in these areas and will encourage, in conjunction with industry and the scientific community, the full application of science to industrial processes and products.
    • We shall extend social ownership by a variety of means, as set out in Labour’s detailed proposals. In particular, we will set up British Enterprise, to take a socially owned stake in high-tech industries and other concerns where public funds are used to strengthen investment. Social ownership of basic utilities like gas and water is vital to ensure that every individual has access to their use and that the companies contribute to Britain’s industrial recovery, for instance, by buying British. We shall start by using the exist mg 49 per cent holding in British Telecom to ensure proper influence in their decisions. Private shares in BT and British Gas will be converted into special new securities. These will be bought and sold in the market in the usual way and will carry either a guaranteed return, or dividends linked to the company’s growth.
    • Encourage the establishment and success of co-operatives of all forms.
    • Strengthen the Department of Trade and Industry as the spearhead of this new national industrial strategy.
    • Bring in a stronger regulatory framework to ensure honest practice in the City of London and introduce new safeguards on mergers, takeovers and monopolies to protect our national industrial, technological and research and development interests.

    PLAN FOR TRAINING

    For modern, wealth-creating industry we need a well-trained workforce. British industry now carries out less than half of the training of our main competitors. Labour will therefore establish a national training programme to bring about a major advance in the spread and standard of skills.

    For young people we will establish an integrated, high quality Foundation Programme that will guarantee for all 16 year olds at least two years of education, training and work experience according to their needs.

    The Adult Skillplan will develop lifelong training and education for everyone needing to supplement and update skills in work, with particular emphasis given to training for women.

    The Jobs, Enterprise and Training Programme will expand existing programmes for unemployed people with a guarantee of a job or new skill for the long-term unemployed.

    A SENSIBLE ENERGY POLICY

    Efficiency in industry and security in the community both depend on reliable and safe supplies of energy available at acceptable cost. Britain’s oil reserves have a limited life. We have huge reserves of coal which will last for centuries. Labour’s co-ordinated energy programme will ensure the most sensible use of our reserves while protecting our environ ment and stimulating employment.

    Labour will initiate a major energy conservation programme and ensure that Britain develops the full potential of its coal, oil and gas resources, whilst gradually diminishing Britain’s dependence upon nuclear energy.

    We will invest substantially in research into, and development of, the renewable energy resources as part of the alternative means of power.

    We will not proceed with the building of the proposed Pressurised Water Reactor at Sizewell.

    We share national concern about the problem of nuclear waste. We will ensure a safe future for Sellafield and develop a new strategy for the monitoring, storage and disposal of nuclear waste.

    Labour will take effective steps to improve the service provided by the energy industry to energy consumers. These will cover quality of supply, frequency of metering, general service arrangements and proper provision for the disabled, those in poverty and others with special needs.

    A PROSPEROUS AGRICULTURE

    A more efficient agricultural industry can clearly make a valuable contribution to Britain’s recovery. We will support good environmental practices in agriculture.

    To give Britain’s producers the backing they need, the burden of agricultural support must be shifted from consumers. The direction of support must be shifted away from blanket support for commodities, towards helping the farmers who need it most, such as those who work in the hills or on marginal land. To help bring this about we will introduce new, long-term programmes for agriculture.

    We will also help new farmers and young farmers by offering farms to rent. And we will reverse the cuts in the Agricultural Development and Advisory Service and research.

    FREEDOM AND FAIRNESS FOR ALL BRITAIN’S PEOPLE

    We are determined to make Britain a fairer and freer society.

    To us and to the majority of the British people a civilised community is one in which citizens band together to provide, out of community resources to which all contribute, essential services like health, education and pensions that the great majority of people can not afford to provide for themselves at time of need.

    When the Tories talk of freedom, they mean freedom for the few, for those who can afford to buy privilege. What they mean, as their record so plainly shows, is more tax cuts for the rich and less help for the poor and for that great majority who are neither rich nor poor.

    Labour’s objective is to broaden and deepen the liberty of all individuals in our community: to free people from poverty, exploitation and fear; to free them to realise their full potential; to see that everyone has the liberty to enjoy real chances, to make real choices.

    It means collective provision for private use. The British people know that this is the most effective way for them to secure their freedom as individuals whilst meeting the moral obligations which they feel towards others and seeing that fairness is a way of national life, not just a fine word.

    These values are the essence of our democratic socialism.

    INVESTING IN HEALTH

    Labour’s proudest achievement is the creation of the National Health Service. The Conservatives voted against it then. All who use and value the service know only too well how it has been neglected and downgraded by today’s Tories.

    Labour will establish the NHS in its rightful place as a high quality service for the prevention and treatment of illness, free at the time of use to all who need attention, equipped to meet the changing pressures of need as they relate, for instance, to an aging population and the requirements of proper provision for people suffering from mental illness.

    The biggest single deficiency in the NHS today is the excessively high hospital waiting lists which, under the Tories, are increasing year by year. We shall speedily reduce them by computerising bed allocation, encouraging more consultants to work full-time for the NHS and targeting increased resources where waiting lists remain excessive.

    The basis of the NHS is the Family Doctor Service We shall act to improve it, with shorter GP patient lists, more convenient surgery hours, more choice and information for patients.

    We will develop local family health care teams and more local health centres.

    Women’s health care has been seriously neglected. Our Charter for Womens’ Health will include a network of Well-Women Clinics, and a computerised call and recall screening system as a universal service for all women at risk of cervical and breast cancer. We shall see that all women have the chance to see a woman doctor if they choose.

    We will step up the fight against AIDS by increasing research resources to find a vaccine or cure and also ensure adequate resources for the supply of drugs capable of arresting the affliction.

    We will improve outpatient and emergency facilities and ambulance services and repair and build hospitals. We intend to improve both the quantity and quality of services for the National Health. The Tories have increased prescription charges twelve fold. We will begin to reduce them with the purpose of securing their eventual abolition.

    Labour will ensure that nurses get proper and justified pay increases by right and regularly, not exceptionally as pre-election sweeteners. Other hospital staff, on whom the effective running of the service depends, must also be fairly rewarded as part of the effective health team.

    Privatisation means a Health Service run for profit rather than in the patients’ interests. Labour will end privatisation in the NHS, relieve the pressure on NHS facilities by beginning to phase out pay beds and remove public subsidies to private health.

    A CARING COMMUNITY

    The quality of life of the elderly and of disabled people can and must be improved by community services. We believe that retirement should be comfortable and interesting – a time of freedom and choice, not anxiety and loneliness. We believe that disability should not be a disqualification from good standards of living and liberty.

    Apart from our commitment to higher pensions and the beginning of a new disablement allowance, Labour will support the National Health Service and local government in providing more meals on wheels, home helps, chiropody services and health visitors.

    We also recognise the immense contribution of the three million people – mostly women – who care for their elderly, infirm and disabled relatives at home. They save the community huge sums of money, often at considerable sacrifice to themselves. The Labour government will consequently provide a carer’s allowance to give extra help to those who serve their loved ones and our society so well.

    We appreciate and will support voluntary efforts that supplement services which are essential to the community. We share the view of many who are engaged in such efforts that they achieve best results working in the context of high quality public provision.

    EDUCATION FOR BRITAIN’S FUTURE

    Our children are our future. We have a moral and material duty to see that children and young people are fully equipped to deal with the complexities and challenges which face them now and which they will meet as citizens; parents and workers in the future.

    They must be provided with a system of education that enables them to control that future. We must see that it is democratic and just, that it is creative and compassionate, and that it is one in which they can fully exploit the advantages of science and technology with confidence and in safety.

    In pursuit of those objectives, Labour will invest in education so that the abilities of all children and adults from all home back grounds and in every part of our country are discovered and nourished.

    We will make nursery education available for all three- and four-year-olds whose parents want this opportunity. We will make provision for smaller classes and ensure that children have up-to-date books, equipment and buildings without having to depend on fund-raising for those essentials.

    The entitlement to free school meals and the restoration of nutritional standards are, like the strengthening of the school health service, commitments which are necessary to safeguard the physical and social wellbeing of growing children.

    We will see that teachers are recognised properly as well qualified professionals, in their systems of rewards, in the procedures for negotiation of their employment conditions and in participation in the development of education.

    In addition we shall work with local education authorities to secure a flexible but clear core curriculum agreed at national level, a School Standards Council, and a new profile of achievement recording individual progress through school for all pupils. We will improve links between schools and home so that parents and teachers act in partnership to foster the best interests of children.

    We shall foster achievement with other policies such as providing proper funding for the GCSE curriculum and examination, for improved supply of teachers and equipment for science subjects so that girls as well as boys increase science learning. There will be maintenance allowances for 16- to 18-year- olds whose family circumstances would other wise impede their further education.

    We will spread the provision of a comprehensive tertiary system of post-school education.

    These policies will all contribute to raising standards of performance in schools. At the same time as we improve the quality of publicly provided education, we shall end the 11 plus everywhere and stop the diverting of precious resources that occurs through the Assisted Places Scheme and the public subsidies to private schools.

    Labour values the research and teaching contribution made by Britain’s higher education system. We will ensure that our universities and polytechnics get the resources they need to restore and expand the opportunity for all qualified young people seeking higher education to secure places. We will ensure that more adults have access to higher education to give them the ‘second chance’ of personal development

    We will also invest in research in higher education, in order to provide the facilities and opportunities necessary to sustain standards of excellence, to retain and attract the highest talents and to encourage the industrial and commercial application of research output.

    Education for life through a well-funded adult education service will help to provide the means by which rapid economic and social change can be embraced.

    REAL CHOICE IN HOUSING

    Public funding for housing has fallen by 60 per cent during Mrs Thatcher’s eight years in office. Far fewer homes are being built. Millions of dwellings are in serious disrepair. Yet there is record unemployment among building workers. This policy is immoral and grossly inefficient. Labour will reverse it. We will also improve the quality of housing workmanship and establish a new system of registration in the construction industry.

    We will launch a major housebuilding and public and private sector housing renovation drive as part of our jobs programme and to combat the problems of bad housing, over crowding and homelessness. Owner occupiers will benefit from increased availability of improvement grants.

    We will maintain mortgage tax relief, at the standard rate of income tax. To assist house-purchasers we will introduce a housing ‘log book’, giving each dwelling’s history, condition and construction so that purchasers will know exactly what they are buying. This will be transferred with the sale.

    For council tenants, we will maintain the right to buy. Local authorities, at present limited by the Tories in using the receipts from council house sales, will be required to use these proceeds to invest in new housing. For the millions who choose to remain council tenants, we will give a legal right to be consulted about rents, charges, repair and improvement programmes. Tenants’ associations will be given representation in the decision-making structure and a say in spending budgets on their estates.

    Groups of tenants who want to take over the running of their homes will have the right to set up management co-operatives.

    Leaseholders who own their homes will be given the legal right to acquire their freeholds at fair prices and without the costly current impediments to that right. Leaseholders in flats will get the legal right to hire and fire the managing agents in blocks of flats. They will be empowered to have the freeholder’s accounts examined by an auditor of their choice and be given the legal right to extend their lease.

    Security of tenure will be protected for private tenants. These tenants will be given a legal right to get repairs done.

    PROTECTING OUR PEOPLE

    The Thatcher government has broken its promises on law and order. Last year 4,311,000 crimes were committed in Britain. The clear-up rate fell to 32 per cent. Millions of women are scared to go out at night. Many old people lock themselves into their homes. Drug trafficking is increasing.

    Labour will take urgent action to make people safer.

    Our crime prevention programme will:

    • Help local councils to implement a Safer Streets policy, with more street-lighting, more caretakers, park-keepers and other public employees whose presence deters crime.
    • Bring in a Safe Estates Policy, assisting councils to provide stronger locks, stouter doors and vandal-proof windows for tenants and home-owners – especially older citizens – who have difficulty in meeting the costs of such security improvements.
    • Introduce a Safer Transport policy, to protect passengers and crews, including better services, especially at night, adequate staffing, better sited bus stops and well-lit stations with alarm buttons.
    • Lay down crime prevention standards for buildings, open spaces and vehicles to combat vandalism and to deter criminals.
    • Combat violence against women – specially domestic violence – by seeing that the laws that already exist against beating and abuse are vigorously enforced.

    Our victim support programme will fund a national network of victim support schemes, providing practical help to victims of all crime, ranging from victims of rape and child abuse to mugging and burglary victims.

    We shall assist family and support groups in their efforts to work with professionals in the health, education and other services and within the community to deal with the great and growing problem of drug abuse.

    Locally elected police authorities will be given clear statutory responsibility with the police to enforce the law and uphold the Queen’s peace. The police themselves will remain responsible for all operational matters.

    Fraud in the City of London is a serious crime. Too many get away with it. Labour will bring in effective regulation by establishing an independent statutory commission.

    MAKING TRAVEL EASIER

    Efficient, inexpensive public transport is essential in any society. Tory policies have made travel more difficult by cutting services and pushing up fares. Deregulation of buses has brought chaos to many parts of the country both in towns and cities and in the rural areas where efficient and cheap public transport is so important.

    Labour will invest to co-ordinate and improve bus and rail services, which will improve travel and reduce congestion. There will be Local Transport Plans for every area.

    Action will be taken to keep fares down. There will be good concessionary fare schemes for local travel for pensioners and people with disabilities.

    We shall promote services for those with special needs, such as dial-a-ride and taxicard schemes offering cheap travel for the disabled.

    We shall invest to ensure a continuing future for British Rail Engineering as a high-quality supplier both for British Rail and to world markets.

    A SAFER ENVIRONMENT

    The countryside and the urban areas all suffer from pollution and the misuse of the environment. Labour will establish a Ministry of Environmental Protection to take positive action to safeguard the quality and safety of life.

    We will:

    • Set up an Environmental Protection Service and a Wildlife and Countryside Service.
    • Extend the planning system to cover agricultural forestry and water developments requiring them, and industry, to take account of environmental considerations.
    • Invest more in land reclamation and cleaning up, in recycling and conservation, in development of new products, processes and pollution control equipment. This will not only make the country cleaner but will create jobs as well.
    • Take action to deal with acid rain.
    • Stop radio-active discharges into our seas and oppose the dumping of nuclear waste at sea.
    • Provide for better monitoring, inspection and enforcement of pollution control, to cover areas ranging from air pollution to beaches, from hazardous chemicals to food additives, and from water quality to vehicle emissions.
    • Protect green belts and other specially designated areas.
    • Bring in a new Wildlife and Countryside Act and provide for public access to all common land, mountain, moor and heath.
    • End all forms of organised hunting with hounds. Special account will be taken of the conditions applying in National Parks. These changes will not affect shooting and fishing.
    • Update animal protection legislation – for example, to eliminate unnecessary experimenting on live animals.

    STRENGTHENING DEMOCRACY

    We will seek to strengthen parliamentary democracy and introduce state aid for political parties, along the lines of the Houghton Report.

    We shall establish a new democratically-elected strategic authority for London and consult widely about the most effective regional structure of government and administration in England and Wales.

    SCOTLAND

    We shall legislate in the first Parliamentary session to establish a democratically-elected Scottish Assembly in Edinburgh. This will have a wide range of powers over health, education and housing and over significant aspects of industrial and economic policy. It will take responsibility for changes in the structure of Scottish local government.

    WALES

    Wales and the Welsh economy will clearly benefit from Labour’s programme for investment in jobs and vital services. In addition, the Welsh Development Agency will be given greater powers and funds and there will be a new Wales Economic Planning Council. Welsh agriculture will benefit from our measures to help the livestock farmers especially the marginal and hill farmers.

    A separate Arts Council for Wales will be established and the development of the use and choice of the Welsh language will be encouraged.

    NORTHERN IRELAND

    Labour’s policies for economic renewal are essential to combat the record unemployment and social deprivation in Northern Ireland and to encourage the economic security which is fundamental to the development of harmony and trust in the community.

    We believe in a united Ireland: to be achieved peacefully, democratically, and by consent. We consequently support the Anglo-Irish Agreement and its commitment that there should be no change in the constitutional position of Northern Ireland without the con sent of the majority of the people who live there. No group or party will be allowed to exercise a veto on political development, or on policies designed to win consent.

    We will combat para-military violence from wherever it comes. We will promote discussions aimed at encouraging mutual confidence and eliminating conflict whilst ensuring that the respective identities and basic rights of both communities will be protected. We will replace present strip-searching practice with more effective and acceptable security measures.

    LOCAL DEMOCRACY

    The Tory government has undermined local democracy and plans to continue to diminish the importance of votes in local elections.

    It has made huge cuts in rate support grant and imposed financial penalties to prevent councils maintaining and improving the quality of essential local services. Employment, and sensible and sensitive investment in local communities and their services, have been damaged.

    Labour will restore the right of councils to decide their own policies and plans, which will be subject to the decisions of local people at annual local elections.

    We will halt the cuts in rate support grant and end financial penalties. We will make the legal liabilities of councillors similar to those of Ministers and Company Directors by ending surcharge and disqualification except for criminal offences.

    We will abolish the Rates Act and repeal the legislation which established the poll tax in Scotland.

    We will give local authorities the necessary powers to enable them to build on existing successful initiatives for enterprise and employment, to develop new technologies and to train young people.

    Labour will examine the structure of local government to ensure that it is democratic and effective. We will establish a new Quality Commission to ensure the spread of ‘best practice’, efficiency and high standards of local authority provision and response to the public.

    NEW LIFE FOR INNER CITIES

    Except where it has turned areas over to speculators so that they can create luxury accommodation at astronomical prices, this government has left inner-city areas to rot.

    Experience has shown that the Conservatives’ City Action Teams have never had the means or the purpose of making any real impact on inner city problems.

    Tory cuts in funding and in housing, together with mass unemployment, have turned too many of our urban areas into dingy, hopeless places.

    Yet the people who live there, given the chance, have the zest and initiative to make these areas thrive socially and economically.

    Labour will launch a drive against inner-city deprivation both as a way of generating employment and as a means of making such areas safer and better places to live.

    Labour’s approach will be to develop the partnership between central and local government, with the direct participation of the voluntary and private sectors.

    We will:

    • Give local authorities in key areas the power to declare Public Action Zones. In these areas, local councils will have additional resources and powers to undertake programmes of investment. Land will be identified for housing, jobs and amenities and extra government resources allocated to help with comprehensive regeneration. Local people will be fully consulted about their needs and ideas.
    • Strengthen the Urban Programme and Partnership Schemes.
    • Make Urban Development Grants available for local needs.
    • Increase resources for reclaiming derelict land.

    RURAL AREAS

    Under the Tories, the problems of the rural areas have become steadily more serious – the lack of jobs, the poor housing, and the loss of buses, post offices, shops and schools.

    Labour will give our rural communities the chance to thrive again. Our policies include better public transport, new mobile facilities for health care and social services and extra help to keep open local schools and post offices.

    ENHANCING RIGHTS, INCREASING FREEDOM

    Under the Conservatives, Britain has become a harsher place. Freedoms built up over generations have been weakened or removed. Labour will restore and enhance those freedoms in a Britain where life can be more pleasant and fulfilling.

    We believe that positive steps are needed to help women and ethnic minorities get a fair deal, and to attain more democracy in the workplace. In addition, we will take steps to ensure that homosexuals are not discriminated against.

    WOMEN’S RIGHTS

    More than half of Britain’s people – the women of our country – are still denied many essential rights. Labour’s Ministry for Women will make sure that, in framing their policies, all government departments listen and respond to women’s needs and concerns.

    In particular, women must have the right to work and equal rights at work. In addition to our new provision for training opportunities and protection against discrimination, Labour will help the large number of women who are part-time workers. We will legislate for them to have the same hourly rates, rights to sick pay, paid holidays and job security as full-time workers.

    We will give homeworkers the status and rights of employees; introduce effective laws for equal pay for work of equal value; provide better-paid leave for parents when their child is born; and encourage a shorter, more flexible working week.

    DEMOCRACY IN THE WORKPLACE

    Workers’ rights have been eroded, or in some cases removed entirely, during the Thatcher years. Labour’s policy for new rights and responsibilities means legislation to foster good industrial relations and democratic participation in industry and trade unions. We believe that the law should be used to enlarge, not diminish, the freedom of workers to control their environment.

    We will:

    • Replace Tory legislation that gives employers and non-unionists the means to frustrate legitimate trade union activity. New laws will strengthen the legal rights of representation, bargaining and trade unionism that are essential in a modern democracy.
    • Improve the protection available against unfair dismissal. We shall make the legislation apply from the time of employment. Reinstatement will be the normal outcome of a successful finding of unfair treatment. We will ensure that justice is done in cases where miners have been unfairly dismissed.
    • Extend employment protection to all workers, including part-timers.
    • Improve statutory protection in respect of health and safety at work.
    • Restore provision for fair pay, such as the Fair Wages Resolution, Schedule 11 of the 1975 Employment Protection Act and the powers of the Wages Councils.
    • Strengthen ACAS to put more emphasis on conciliation and arbitration.
    • Take steps to develop stable and effective negotiating machinery, promote trade union membership and organisation, and encourage union recognition by employers.
    • Restore the right to belong to a trade union to every employee – including those at GCHQ.
    • Ensure that the law guarantees the essential legal freedom of workers and their unions to organise effective industrial action.
    • Provide a statutory framework of measures to underpin the participative rights of union members, for example by laying down general principles for inclusion in union rule books. These will be based on a right for union members to have a secret ballot on decisions relating to strikes, and for the method of election of union executives to be based on a system of secret ballots.
    • In consultation with the TUC, we will establish a new independent tribunal, presided over by a legally-qualified person. This will have the duty of acting on complaints by union members if they consider that these statutory principles have been breached.

    EQUALITY FOR ETHNIC MINORITIES

    All the people of this country – whatever their race, colour or religion – must enjoy the full rights of citizenship.

    Our policies for employment, education, housing, health care, local government and much else will clearly be of benefit to people of the ethnic minorities as they will be to the whole community.

    In addition, Labour will take firm action to promote racial equality, to attack racial discrimination and to encourage contract compliance and other positive means of ensuring equity for all citizens. We will strengthen the law on public order to combat racial hatred and take firm action against the growing menace of racial attacks. We will make prosecution easier in order to encourage the reporting of offences.

    Labour’s policy of firm and fair immigration control will ensure that the law does not discriminate on the basis of race, colour or sex.

    A BETTER DEAL FOR CONSUMERS

    When people make a purchase, they often feel they are treated unfairly, or even cheated. Labour’s Charter for Consumers will provide proper safeguards suited to modern conditions.

    There will be firmer protection against unsafe goods. We will make producers strictly liable for defective products.

    We will provide easier means of redress for purchasers and stiffer penalties to deter illegal practices.

    We will take action to make sure that public bodies respond better to the needs and complaints of people who use their services.

    We will bring in a statutory code of advertising practice. There will be powers to order the correction of misleading advertisements.

    We will improve access to legal services where necessary.

    There will be more safeguards for customers when companies go bankrupt.

    TOWARDS A FULLER LIFE

    Life is not only work. Labour will make pro vision for the co-ordination and development of leisure amenities and the leisure and cultural industries.

    Our Support Sport programme will provide more resources for physical education and training through more playing fields and facilities, better equipment and well-trained teachers and instructors. We will nourish special talents and encourage wider participation in sport.

    We will encourage schools to open up their recreational facilities to the whole community and prevent the selling off of school and other sports grounds.

    We will set up a Sports Trust to channel resources into the development of community sporting facilities and the attraction of major international sporting events to Britain.

    We will establish a Ministry for the Arts and Media with responsibility for the arts, crafts, public libraries, museums, film, publishing, the press, the record industry, the development of broadcasting and access to it, fashion, design, architecture and the heritage. The Home Office will remain responsible for regulatory and statutory powers in relation to broadcasting.

    The development of central and local government support for the arts, culture and entertainment is essential to the extension of choice, access and participation, and to the development of the related industries.

    We will protect the independence of the BBC and the independent broadcasting organisations. We reject subscription TV for the BBC and the auctioning of ITV franchises.

    We will legislate to ensure that ownership and control of the press and broadcasting media are retained by citizens of Britain and to place limits on the concentration of owner ship. We will strengthen the Press Council and set up a launch fund to assist new publications in order to encourage the diversity necessary in a healthy democracy.

    MODERN BRITAIN IN A MODERN WORLD

    The globe is torn by strife and oppression A Labour Britain must play its part in promoting freedom and reducing conflict.

    Labour will play a full part in the United Nations Organisation and the Commonwealth.

    Under the Conservatives, Britain picks and chooses which authoritarian countries to condemn and which to befriend. Labour will stand up for freedom wherever it is oppressed – whether in Eastern Europe, Latin America, Asia or Africa.

    The Thatcher government has made no real effort to foster freedom in South Africa and Namibia. Labour will make the arms embargo complete, halt investment and commercial loans and ensure that British measures against apartheid embrace those already adopted by the US Congress, the Commonwealth and the EEC. We will support the imposition by the UN Security Council of comprehensive mandatory economic sanctions and provide help to the Front Line States who bear the brunt of South African military and economic attack.

    We uphold the principle that it is wrong for one country to dominate or threaten another. We oppose the Soviet presence in Afghanistan. We oppose United States intervention in Nicaragua and the financing and arming of the Contra terrorists.

    Labour will actively seek a stable peace in the Middle East which protects the security of Israel and recognises the right of Palestinians to self-determination.

    Labour supports genuine guarantees for the independence, sovereignty and territorial integrity of Cyprus and supports the efforts of the United Nations to achieve that.

    We support the human rights movement throughout the world. We champion the demand for free trade unions in Poland. We will press the Russians to honour their obligations under international human rights agreements.

    International terrorism is a growing menace to liberty and security. Labour is firmly committed to strengthening national provision and international co-operation in combating and defeating it.

    Labour’s aim is to work constructively with our EEC partners to promote economic expansion and combat unemployment. However, we will stand up for British interests within the European Community and will seek to put an end to the abuses and scandals of the Common Agricultural Policy. We shall, like other member countries, reject EEC interference with our policy for national recovery and renewal.

    DEFENDING OUR COUNTRY

    Labour has a proud record of acting in defence of Britain. It was a Labour government which helped to establish the North Atlantic Alliance. It was a Labour government which in the 1970s put resources into rebuilding the Royal Navy and equipping the Royal Air Force with the most up-to-date aircraft.

    At the same time, Labour has always linked necessary defence with the need to reduce hostility between East and West. We must be alert in protecting our country and equally alert in helping to keep away the scourge of war and nuclear destruction.

    The incoming Labour government will maintain that record of effective defence whilst working to lower international tension, fear and distrust.

    Labour’s defence policy is based squarely and firmly on Britain’s membership of NATO. We are determined to make the most useful possible contribution to the alliance. We can best do that by concentrating our resources on the non-nuclear needs of our army, navy and air force.

    The Polaris system of nuclear delivery is ageing and will soon be obsolete. The Tories are buying the expensive American Trident system – a policy which increases nuclear armament without increasing security and, at the same time, diminishes our effective defences. Trident’s cost of up to £10 billion will take up so much of our defence budget as to deny modern and necessary equipment to our front line forces. Indeed, this process is already happening.

    Labour rejects this dishonest and expensive policy. We say that it is time to end the nuclear pretence and to ensure a rational conventional defence policy for Britain.

    So Labour will decommission the obsolescent Polaris system. We will cancel Trident and use the money saved to pay for those improvements for our army, navy and airforce which are vital for the defence of our country and to fulfil our role in NATO. We will maintain a 50-frigate and destroyer navy. We will play a full part in the development of the European Fighter Aircraft. We will invest in the best up-to-date equipment for the British Army of the Rhine.

    That commitment to conventional defence will be based wherever possible on buying British-made rather than foreign equipment. This policy will provide greater security for workers in our vital industries like aerospace, shipbuilding and engineering where jobs are in danger from the reductions which the Tories are making in conventional defence.

    We have always recognised that a properly negotiated and monitored international agreement to remove nuclear weapons from European soil would provide the most effective guarantee against the horrors of nuclear war. It would be the most significant step towards an eventual worldwide renunciation of, and ban upon, nuclear weapons. That is why we were the first to propose to the superpowers the zero option in respect of intermediate nuclear weapons.

    Labour therefore strongly supports the talks between the United States and Soviet governments aimed at reducing nuclear armaments. Success in these efforts to negotiate the removal of all intermediate nuclear missiles in Europe would be warmly welcomed. It would mean the removal of America’s Cruise missiles here in Britain and in the rest of Europe, as well as Pershing IIs in Germany and the Soviet SS20s and other shorter-range missiles.

    We naturally, therefore, want to assist that process in every way possible. If, however, it should fail we shall, after consultation, inform the Americans that we wish them to remove their cruise missiles and other nuclear weapons from Britain. We would then become the ninth – of the sixteen NATO members – which do not have US nuclear weapons on their territory. This change would, of course, not affect the other US, British and joint defence and early warning systems in the United Kingdom.

    We will oppose the extension of the arms race into outer space and will seek an international agreement to abolish chemical weapons.

    THE WAR WE MUST FIGHT

    The world is aware, as never before, of the horrors of famine and poverty in many countries. A Labour Britain will play its full part in defeating these scourges.

    We will set up a Department of Overseas Development and Co-operation, headed by a Cabinet Minister. We will double Britain’s aid budget in order to achieve the United Nations’ target of 0.7 per cent of national income within five years. We will restore funding for development education. We will give greater support to voluntary agencies. We will promote international action to lift the burden of Third World debt and improve the trading conditions of the developing countries.

    In all of our policies for making our aid commitment more effective we shall consult the agencies and the men and women of the communities that use the aid to help to win their freedom from want and poverty.

    BRITAIN WILL WIN WITH LABOUR

    On June 11, the people of Britain have the opportunity to put behind them the bleak years of Thatcherism and to give our country a fresh start Labour’s plans, carefully costed, prudently programmed, can provide that start.

    To go on under Toryism is to accept lower expectations and narrower horizons: it is to surrender to national decline and national division.

    We must not shackle ourselves or burden our children with that future of failure. Together, we can be successful not just in material and economic terms, though these are vitally important, but also in terms of our sense of purpose, our freedom, independence and confidence.

    That success can come only when the nation is restored to strength and unity in their fullest sense.

    Labour has the policies to generate efficient production and secure high standards of justice. Labour has the vision and commitment to stimulate the energies, the skills and the will to succeed of the British people.

    In our precious democratic tradition, a general election passes power back from Parliament to the people. We urge the people to use their power in their own interests, their families’ interests, their country’s interests.

    Britain will win with Labour.

  • Gordon Brown – 2001 Mansion House Speech

    Gordon Brown – 2001 Mansion House Speech

    The speech made by Gordon Brown, the then Chancellor of the Exchequer, at the Mansion House in London on 20 June 2001.

    Mr Lord Mayor, Mr Governor, My Lords, Aldermen, Mr Recorder, Sheriffs, Ladies and Gentlemen.

    Tonight I want to talk about how our new-won and hard-won stability can strengthen Britain for the future: how, building upon that stability and a wider and deeper culture of enterprise, our country can aspire to, and achieve, the best levels of productivity growth.  And how, just as stability and reform can create a more competitive and prosperous Britain, so too stability and reform can create a more competitive and prosperous Europe.

    But first, in thanking you for your invitation, let me at the outset pay tribute to the contribution you and your companies and institutions make to the prosperity of Britain, the service you give and the difference you make.

    You are leaders in a financial services sector that generates 50 billions of wealth each year for Britain, provides work for over 1 million British citizens, and represents those enduring British qualities of creativity, enterprise, duty and openness to the world.  With the London Stock Exchange, the largest trading centre for foreign equities in the world, and the foreign exchange market the largest and most important in the world, you lead for Britain in the world.

    The context for my remarks is the changing global economy.

    My theme is that in just a few short years the world has moved from sheltered to open economies; from local to global competition; from national to world wide financial markets; from location, raw materials and indigenous capital as sources of national competitive advantage to skills, knowledge and creativity as what makes a difference.

    To rise to these global challenges we have this week announced the next stage in our competitiveness reforms:

    The Secretary for Industry Patricia Hewitt has announced a major reform in the competition regime and deregulatory measures to help small business;

    The Secretary for Education new measures to improve skills and, under the leadership of Sir Howard Davies, an examination of how schools and business can work to promote the enterprise culture;

    The Secretary for Local Government a reform in our physical planning laws;

    And I have been able to announce cuts in Capital Gains Tax, in small company Corporation Tax and deregulatory measures including a simplification of the VAT system that will help small businesses.

    These reforms reflect the modern role of Government – not to interfere but to enable: by breaking down the barriers to enterprise and ensuring that more people with ideas have access to the finance, technology, advice and skills they need to transform their insights and initiative into business success.

    But, as I have said on each occasion I have addressed you in the mansion house, the foundation of all we do is economic stability.

    Every time in recent decades when the British economy has started to grow, Governments of both parties have taken short-term decisions which too often have created unsustainable consumer booms, let the economy get out of control and sacrificed monetary and fiscal prudence. And everyone here will remember how quickly and easily boom turned to bust in the early nineties.

    So Britain did need a wholly new monetary and fiscal framework that went beyond the crude Keynesian fine tuning of the fifties and sixties and the crude monetarism of the seventies and eighties and, instead, offered a modern British route to stability.

    With first, clear policy rules: a symmetrical inflation target and our fiscal disciplines.

    Second, clearly established procedures: the Code for Fiscal Stability and, most of all, Bank independence – and here I thank Sir Eddie George the Governor of the Bank of England for his leadership, leadership which we rightly applaud.

    And third, an openness and transparency we have not seen in the past.

    I believe that as we are tested by events like rising oil prices, exchange rate pressures, and now the US slowdown, our new framework makes us better placed than before to cope with the ups and downs of the economic cycle.

    And I can say categorically that we will continue to steer a course of stability and support our monetary authorities in the difficult decisions they have to take to ensure that we remain on track to meet the inflation target and sustain high and stable levels of growth and employment.  We will entrench not relax our fiscal discipline and at all times avoid short termism – a return to the mistaken monetary and fiscal policies of the past.

    Not just in Britain but in the euro area a modern route to economic stability is being sought based on a shared recognition that the old fine-tuning cannot work, that in liberalised markets rigid monetary targets cannot on their own deliver stability and that the discretion necessary for effective economic policy is possible only within a framework that commands public and market credibility.

    And there is, I believe, also a growing understanding that this credibility depends upon clearly defined and publicly understood long-term policy objectives.

    So, just like Britain, the euro area has been establishing a framework for economic stability.

    And, as I said in October 1997, in principle British membership of a successful single currency offers us obvious benefits – in terms of trade, transparency, costs and currency stability.  And membership of a successful single currency could help us create the conditions for higher and more productive investment and greater trade and business in Europe.

    In 1997, the Government said that, while we recognise the constitutional issue as a factor in the decision, we do not consider it a bar to entry if there is clear and unambiguous evidence of the economic benefits of joining, and if the people have the final say in a referendum.

    And that commitment to a referendum – if the economic tests are met – is a promise we made in our election manifesto only a few weeks ago.

    The 1997 statement also set five economic tests:

    First, sustainable convergence between Britain and the economies of a single currency; second, whether there is sufficient flexibility to cope with economic change; third, the effect on investment; fourth, the impact on our financial services industry; and fifth, whether it is good for employment. These tests are the necessary economic pre-requisites for membership of a successful currency union.

    So I reject the view of those who would rule out membership of the single currency on principle. They would refuse to join even if it were in the national economic interest to do so. To rule out membership of the single currency on dogmatic grounds would in my view be damaging for investment, jobs and business generally.

    Similarly, I reject those who would urge us to join regardless of the assessment of the five tests.  Such a course would risk repeating past failures, would prejudice our stability and would also be damaging for investment, jobs and business generally.

    Our approach is, and will continue to be, considered and cautious – one of pro-euro realism.

    Pro-euro because, as we said in 1997, we believe that – in principle – membership of the euro can bring benefits to Britain.

    Realist because to short-cut or fudge the assessment, and to join in the wrong way or on the wrong basis without rigorously ensuring the tests are met, would not be in the national economic interest.

    Because the Government is determined that we will make the right long term decisions for Britain, we will not take risks with Britain’s hard won stability.

    So the assessment as to whether it is in the British national economic interest or not will be comprehensive and rigorous.  It is only on this basis – taking into account all relevant economic information – that the Cabinet will decide whether to recommend membership to Parliament and then to the British people.

    Before any such assessment is started, we must, of course, continue to do the necessary preliminary work for our analysis – technical work that is necessary to allow us to undertake the assessment within two years as we promised.

    Indeed, since 1997, our strategy has been, as I set out then, to prepare and decide.  This has already involved the publication of the draft national changeover plans and the work of our standing committee with business.

    To prepare and then decide is the approach that we will continue to pursue.

    Around the future of the euro there is, of course, an ongoing national debate.

    But across Europe a debate on the future of Europe is also taking place and Britain must be at the centre of that debate too – a debate on economic reform amidst the challenge of globalisation, enlargement into the East, and the wider Nice agenda to make decision-making in Europe more open, accountable and relevant to the population as a whole.

    Because this is a time of great change and challenges for the European Union, every country must not only debate its place in Europe but what kind of Europe we want.

    Britain’s relationship with Europe is a question that every generation in this country has had to ask and answer.

    And in this generation – for our time – let us remind ourselves why Europe is so important.

    It is sometimes said that there are no great causes left.

    Being part of Europe is itself a great cause – to have granted to us, in our generation, the opportunity to set aside old enmities and feuds, to contribute to a mission that has helped secure half a century of peace in Western Europe, and now the historic task to cement peace and democracy in Central and Eastern Europe as we have done in the West.

    At one time the case for Europe was simply peace. But today the case for Europe must be not only that, working together, we can maintain peace but that, working together, we can maximise prosperity.

    And getting the economic future of Europe right matters for Britain because over three quarters of a million United Kingdom companies now trade with the rest of the European Union.  It is a fact that in the 1970s, when we joined Europe, less than 8 billions of our trade was with the rest of Europe.  Today it is £132 billions – half our total trade – with 3 million jobs affected.

    So Europe is where we are, where we trade, from where thousands of businesses and jobs arise. And we are part of Europe by geography, by history, by economics and by choice. The channel has always been a route to the wider world, not a moat cutting ourselves off from it. And, as a trading nation, the greater the stability in our relationship with our major trading partners, the greater the benefit to us.

    I believe that those who seek to renegotiate the very basis of our membership with Europe, even when they simultaneously protest they do not want to leave, put at risk the stability that is so central to modern business and investment decisions. And I believe that government and business must join together in putting the case unequivocally for Britain being in Europe – a stronger Britain on the basis of a strong and secure relationship with Europe.

    And as the great debate on Europe’s future begins, we should not only put the case for Europe but for a reformed Europe – and for Britain leading reform in Europe.

    Indeed the more Europe extends its single market, the better it is for Britain and Europe.

    The more Europe embraces economic and institutional reform, the better it is for Britain and Europe.

    The more Europe looks outwards, the better it is for Britain and Europe.

    And the more Europe and America work closely together, the better it is for Britain, Europe and the world.

    While the single market encompasses 375 million people today – and potentially nearly 500 million in the future, we have still a long way to go to secure for British business and British consumers the full benefits in commercial opportunities  and consumer prices.

    So here the economic reform agenda is clear and challenging: it is to complete the single market in utilities, energy, telecoms and financial and professional services that we have argued not just for action plans which signal intent but timetables which signal deadlines.

    Liberalisation in telecoms by the end of 2001 Liberalisation in financial services by 2004 Energy liberalisation – where we continue to push our neighbours.

    Potentially too air liberalisation, with reforms to the allocation of take-off and landing slots that introduce market mechanisms to allocate scarce capacity.

    And liberalisation in the capital markets – a cause you and I share – promoting more open markets and more choice in pensions, insurance, savings and mortgages for people across Europe is a development from which Britain – because of our vibrant and successful financial services sector – stands well placed to benefit.

    And it is to complete the single market and create a level playing field for British companies that we have opposed state subsidies, whether through public expenditures or through discriminatory tax practices, and we have led the way in arguing for the new Code of Conduct group and work by the OECD to tackle unfair tax competition.

    In the coming year the economic reform agenda must be pushed forward to enhance labour market flexibility and capital and product market modernisation and reform. We will publish proposals for the Spanish economic reform summit next year and I can confirm that for the Spanish Presidency the Government will be producing a white paper on economic reform in Europe.

    A Europe reformed is a Europe that serves Britain and Europe best. As Europe enlarges, the reform agenda is again equally clear – and challenging reform of the CAP and of the budget – which has always been necessary – will become urgent.

    Leading up to the IGC of 2004 there is now a debate on the future of Europe where matters not just of economic integration and reform, but of political legitimacy and accountability, are coming to the fore.

    Our Government’s vision of Europe, as set out by Tony Blair in Warsaw, is not a federalist one but one in which independent nation states work together to shape the decisions. It is one where there is, increasingly, mutual recognition of national standards and solutions based on exchange of information, peer review and benchmarking rather than the central imposition of “one size fits all”.

    It is of a market that must, rightly, have a social dimension, but with subsidiarity or national decision-making the way forward.  It is of tax competition not tax harmonisation.

    And as Tony Blair also said, it is of an open and accountable administration subject to the direction of elected ministers, not an unaccountable bureaucracy.

    Alliances are being built for reform. The old pressures for tax harmonisation are already now being vigorously pushed back as we argue for the principles of tax competition.  Countries are coming together to insist the European budget is brought under control and following Britain’s initiative on fraud to set up an independent fraud office, there is a need to expose and tackle waste and fraud vigorously. It is now also accepted that widespread reform of the commission must take place.

    So here again the reform agenda is clear and challenging. And right across Europe people now clearly want the debate on integration to be complimented by a debate on accountability. And on these issues relevant to the 2004 IGC the Prime Minister will, during the next year, be setting out our Government’s proposals.

    I believe that those genuinely committed to advancing Britain’s national interest should support rather than dismiss a practical approach to making the reform agenda work.

    And, perhaps most important of all, the new Europe must be outward looking rather than inward looking.

    The first post-war reshaping of Europe into a common market took place in the shadow of war as we moved beyond the old conflicts of the past. The second reshaping of Europe is happening not just as a result of internal forces at work within Europe but in response to vast global changes – not least fast increasing trade and capital flows, between Europe and the rest of the world and the growth of transcontinental companies.  In just one decade, direct European investment in the USA has increased more than ten fold, from 20 billion dollars a year to 230 billion dollars a year. And we need only look at the impact of the American slowdown on European economic growth to understand this growing economic interdependence.

    I give just one example of the implications for policy. When European finance ministers examined whether to impose a Withholding Tax on savings which – as we argued – would have done huge damage to the bond market here in the City, they were persuaded to opt for exchange of information instead of a European wide tax. They were persuaded that, in the new global economy, tax decisions could not be taken in Europe in a vacuum.  If capital could move freely out of the European Union – to either Switzerland or Liechtenstein or the USA – tax decisions had to be taken with a view to forces at work round the world.

    Here again the economic reform agenda is clear and challenging. Rightly, with its initiative to open our economies to the Least Developed Countries free of tariffs and free of barriers, Europe is leading the efforts to get an ambitious world trade round underway. And we lead too in retargeting international aid and development.

    Between them, Europe and America together account for 55 percent of world trade, 60 per cent of trade in services and – remarkably – 80 per cent of world wealth. But it is more than commerce that binds us. Increasingly, in this age of globalisation, our national goals are shared international goals, our responsibilities are shared responsibilities, and our opportunities are shared opportunities.

    And, together, Europe and America have an even greater responsibility for world stability and growth, not least as they affect developing countries. So we must think transcontinentally as well as continentally.

    If someone had said to any of us 20 years ago that Eastern and Central Europe would soon embrace Western Europe, Russia would start to look westwards, and that in Western Europe the old ideological conflicts between state and market would be resolved such that state and markets work together and that there would be a free flow of capital round the world, all of us would have been astounded to the point of disbelief. But we would have been even more astounded if we were told that at precisely that point of opportunity for the world economy, voices would advocate American disengagement and settle for a Europe that looks inwards.

    The end of the Cold War should not be the signal for disengagement or parochialism but for a new and enhanced form of engagement between our continents, where shared interests that could yield mutual benefits lead to a reform agenda that is yet again clear and challenging and as ambitious and wide ranging as:

    • the elimination of industrial tariffs;
    • open skies;
    • the mutual recognition of standards across the professional services;
    • common rules of competition;
    • eliminating barriers to the establishment of European and US companies in each other’s markets;
    • and a joint strategy for oil supplies as well as for tackling debt and poverty in developing countries.

    In 1988 the Cecchini report looked at the advantages of cooperation for a European single market. We need a Cecchini style report that investigates the benefits for growth, jobs, prosperity and world trade of a stronger trading and commercial relationship between Europe and America.

    In forging that stronger relationship, Britain plays a pivotal role.  Britain does not have to choose between America and Europe, but is well positioned as the vital link between America and Europe.

    And so this Government believes in a Europe where cooperation is widening and deepening as we extend the single market and embrace economic and institutional reform – not at the expense of the rest of the world but in concert with it.

    Mr Lord Mayor, Winston Churchill said that those who build the present only in the image of the past will miss out entirely on the challenges of the future.

    I believe that, learning from each other, all of us – businesses and  governments working together – can face the great challenges of today’s economy not by resisting change but by helping people to cope with it; not by standing still but by radical economic reform; and not by protectionism but by promoting open, competitive markets and international cooperation. It makes for a Britain that is outward looking and open to the world, ambitious to succeed, wholly committed to an enterprise culture and determined to be fully equipped to lead in the 21st century economy.

  • Gordon Brown – 2001 Speech at the Press Launch of Enterprise for All

    Gordon Brown – 2001 Speech at the Press Launch of Enterprise for All

    The speech made by Gordon Brown, the then Chancellor of the Exchequer, on 18 June 2001.

    Enterprise for all

    When four years ago we made the Bank of England independent, we said that the aim of economic policy in Britain should be high and stable levels of growth and employment.

    In our first term we put stability and employment creation first. From today our energies — building on the platform of stability and employment creation — must now be directed to raising our country’s productivity.

    Britain needs radical reform and modernisation of our product, capital and labour markets to create, for the first time, a truly entrepreneurial culture that is not confined to the few but open to all:  one where, in every community, people with ideas and initiative have the chance to start and succeed in business.

    The new Britain of enterprise for all cannot be built on inadequate investment, low skills, boardroom complacency, workplace resistance to change, or on cartels or restrictive practises from whatever quarter they arise.

    So first, competition open to all.

    Because greater competition at home is the key to greater competitiveness abroad, the Secretary for Industry and I believe that a step change in competitive pressures within the British economy is essential if we are to reach for US levels of productivity growth and to deliver over this decade faster productivity rises than our industrial competitors.

    In the last Parliament we made monetary decisions independent of political influence within a long term framework. In this Parliament we must do the same for competition policy and the Secretary for Industry is setting out today her plans to make British competition decisions – and the competition authorities – fully independent of political influence.

    In the United States, it has long been recognised that cartels are simply a sophisticated form of theft — and that the threat of prison sentences for such clear-cut abuses is the most powerful and effective deterrent. So it is our intention, following consultation, to introduce a new criminal offence for individuals who engage in cartels. We will consult on the details.

    By next year we will have put in place the framework to deliver a pro-competition regime to match the best in the world.

    The small businesses of today are the big businesses of the future.  And so, in addition to opening up competition, we are today sending a message to the  entrepreneurial, the innovative and dynamic: if  you are starting up, growing a business, investing,  taking people on, seeking new capital or  working your way up in business – we are  on your side.

    So today the Government makes proposals to create a Capital Gains Tax regime for entrepreneurs and business assets that, overall, will be more favourable to enterprise than that of the United States.

    The Capital Gains Tax rate we inherited was 40p for investments held for one year.  We cut it in Budget 2000 to 35p. I now propose a cut to just 20p.

    For investments held for two years, I propose to cut the rate from 30p to 10p.

    With this new regime, the Inland Revenue estimates that three quarters of taxpayers with business assets will pay only a 10p rate.

    And for non-business assets we will now consider the case for further changes to improve incentives to invest.

    The Enterprise Management Incentive scheme helps innovative and growing companies attract the best talent. I now propose to double the reach of the scheme to include all businesses with assets of up to £30m.

    For large companies we have already cut Corporation Tax from 33p to 30p, the lowest rate of Corporation Tax in our history. Our approach is one based on a broad base and low tax rates, that is stable and transparent, reflecting our belief in fair tax competition — and our opposition to harmful tax competition and niche regimes — so that companies make decisions to exploit real business opportunities. All reflecting our goal to make and keep the UK as the best place for international business. And as we discuss with business the next steps we will take in pursuit of these principles we are next month publishing a further consultation document.

    It is not enough to offer new incentives for existing businesses. Britain should also be the best place to start a business.

    Compared with Britain, three times as many Americans say they want to start a business.

    The chance to start a business should not depend on your background or contacts or just luck. In every area of Britain I want the enterprising to go as far as their talents and potential can take them. Instead of the old Britain under-performing when enterprise was seen to be restricted to a closed circle of the few, the British economy will do best when enterprise is — and is seen to be — open to all

    First, to simplify VAT for half a million small firms, we are publishing details today of a new flat rate VAT scheme — reducing business costs by up to one thousand pounds a year.

    Second, at present companies must compile separate accounts for Companies House and for the purposes of calculating their tax. We are now consulting with business on abolishing the requirement for separate accounts for tax, cutting both red tape and business costs.

    Third, I can announce that in the Budget of 2002 there will be a cut in small company Corporation Tax bills. More of small companies profits will be taxed not at 20p but at half that rate, 10p.

    Fourth, as we introduce an on-line electronic gateway for small firms to access services, Mr Pat Carter will report on how we put new technology to use to help small firms cut the cost and time of running payroll systems.

    Fifth, for half a million businesses with turnovers of less than one hundred thousand pounds, we will remove the presumption that fines be levied automatically. In future, automatic VAT fines will be levied only after a written communication is first sent offering advice and help to sort out the problem.

    Sixth, because small business growth rests not just on increasing the rewards for success but minimising the costs of failure, the Secretary for Industry will announce major changes to the rules on insolvency, including abolishing administrative receivership and, at a cost of around £100m a year, the Treasury will abolish Crown preference — the right of the Revenue and Customs to have first call for tax payments ahead of other creditors already in the queue.

    Finally, to make the enterprise culture work for people and places too long forgotten, I can announce that a £40m community development venture capital fund, comprising Government, private sector and charities, is to be opened and we will set out, in the next few weeks, the detail of the stamp duty exemptions, VAT reductions and enhanced capital allowances that will be on offer to encourage new  economic activity in  high unemployment areas.

    Fresh incentives to start a business will be accompanied by new measures to encourage venture capital — vital to bridging the investment and productivity gaps with our competitors — in all our regions and nations. I can announce today that, following our agreement with the European Commission and backed by £80m of Treasury funding and up to £60m from the European Investment Bank, our Regional Development Agencies — leaders in a new industrial policy for Britain’s regions  — will issue prospectuses for a one billion pound fund. Regional targets are being set out today.

    The modern way to personal prosperity is higher earnings through higher skills. To tackle the most serious skills problem in the modern industrialised economies — 7m adults with less than 5 GCSEs and 3m with no qualifications at all — the new Education Secretary is preparing plans for  a step change in the skills of the adult workforce.

    Our new British tax credit system that applies to work and families allows the tax system to pay out money as well as receive money. Because of its strategic national importance to the future of our economy — and because the voluntary approach has not achieved enough so far — we are prepared to apply to workplace training the same radical approach, with the government not only recognising companies? investment in skills when they pay tax but looking at contributing more through a new workplace skills tax credit or grant.  But we will only move ahead with this reform if the opportunities we offer are matched by new responsibilities accepted by both employers and employees.

    A tax credit is already boosting research and development and encouraging innovation among smaller firms. In the next Budget I intend to introduce a new research and development tax credit for larger firms

    Britain benefits from entrepreneurial talent joining us from all over the world. In the last Parliament we extended the work permit system and skilled people coming to the UK have risen from 50,000 a year to 150,000 a year. The next step is to attract those with a business track record that demonstrates their value to the economy and building upon this new scheme it is our intention to do more.

    Closing the productivity gap requires us to raise the quantity and quality of investment in private and public sectors.

    Institutional investors control 1.5 trillions in assets, including half the quoted equity markets. We will see through the reforms Paul Myners has prescribed to encourage long term investment and there will be a further review – as he recommended – on the extent to which our pension funds have risen to the challenge he has laid down.

    I can also announce today that Ron Sandler, former Chief Executive of Lloyds and Chief Operating Officer of Natwest Group, will undertake an independent review of the long-term retail savings industry including life insurance, a sector which manages more than one thousand billions in assets.

    Working closely with the FSA, he will examine the forces and incentives which drive the industry and its approach to investment.

    The efficiency we seek in the private sector we demand in the public sector. Having doubled net public investment, including  £180 billion of new public and private investment over ten years for transport, Government at every level – national, regional and local – must raise its game.

    The planning system is a key issue for business and the economy.  Much of our planning system is based on the needs of the post war world. The Secretary for Transport, Local Government and the Regions will now bring forward detailed proposals for modernisation in a Green Paper on reform to the planning system which we will publish later this year and which will strike the right balance in a radically different economy which puts an ever higher premium on speed, efficiency and flexibility – especially to reflect the widely differing needs of all our regions.

    Today, Martin Cave, who is conducting the independent review of radio spectrum management launched in the Budget, is publishing a consultation paper on his approach.  His preliminary conclusion is we need better incentives so that users, in the public or private sectors, do not waste or hoard what has previously been a free good – especially if we are to encourage innovation and productivity in this area.

    Our universities have a major role to play in generating ideas and providing high level skills crucial for productivity and growth.  In the last Parliament, we provided substantial new funding, especially for science.  The universities too have begun to respond, and a process of culture change is underway.  In this Parliament we will take this further, ensuring that the right freedoms and incentives are in place for universities, and that talented people from all backgrounds are able and encouraged to get the best education.

    The same radical programme of reform of capital, product and labour markets we have announced for Britain, we will also pursue in Europe.

    If we are to have the deeper and wider  entrepreneurial culture we need, we must start in  our schools and colleges,  and the Secretary for Education and I have asked Sir Howard Davies to examine how we can make progress. We want every young person to hear about business and enterprise in school; every college student to be made aware of the opportunities in business – and to start a business; every teacher to be able to communicate the virtues and potential of business and enterprise.

    So as we spread the spirit of enterprise from the classroom to the boardroom, our aim for this Parliament is to contribute to the creation of a deeper and wider entrepreneurial culture where enterprise is truly open to all.

  • HISTORIC PRESS RELEASE : Enterprise for All – The Challenge for the Next Parliament [June 2001]

    HISTORIC PRESS RELEASE : Enterprise for All – The Challenge for the Next Parliament [June 2001]

    The press release issued by HM Treasury on 18 June 2001.

    New measures to tackle the productivity gap with Britain’s major competitors were set out today by Chancellor Gordon Brown, Trade and Industry Secretary Patricia Hewitt, and Education and Skills Secretary Estelle Morris:

    radical reform of the UK’s competition regime;
    a Capital Gains Tax regime that is overall more favourable to enterprise than that of the USA;
    modernisation of insolvency laws with abolition of Crown Preference;
    better tax treatment for share options, extending Enterprise Management Incentives to larger companies;
    a Green Paper, later this year, on reforming the planning system;
    a review of the long-term retail savings industry led by Ron Sandler;
    a major review of the role of enterprise and business in education led by Sir Howard Davies;
    new measures to help small businesses grow including extension of the 10p corporation tax rate and help with VAT compliance;
    a review of payroll services to small business;
    an immediate review of DTI’s support to business, starting with industrial manufacturing;
    targets for each of the English regional venture capital funds.

    Speaking following a business breakfast held at No 11 Downing Street, the Chancellor said:

    “Four years ago the Government began its mission to raise the economy’s sustainable rate of growth. In our first term this Government put stability in the macro-economy and work first. In our second term we must build on the platform of stability and employment. Today, we bring forward radical measures to tackle our productivity gap and create in Britain a true enterprise culture where the chance to start and succeed in business is genuinely open to all.”

    Patricia Hewitt said:

    “This Government will help UK firms get to the future first. Enterprise is key to our future prosperity. We must remove obstacles to innovation, and make competition work properly for the consumer, so that UK companies become the best at meeting consumer needs. We must back success and remove opportunities to break the rules.”

    Estelle Morris said:

    “It is vital for a healthy economy that young people understand the importance of enterprise and are given the support they need to succeed in their working lives. The Learning and Skills Council provides a very important link between the business community and young people. We are also making sure that schoolchildren get more chances to do work experience to help them prepare for the world of work. So I am pleased to announce today that, to encourage an enterprise culture, Sir Howard Davies has been commissioned to conduct a review of the role of enterprise and business in education.”

    Today’s statement sets out a package of radical reforms to drive through improvements in the UK’s productivity performance.

    These changes build on the reforms the Government made in its first term to improve competitive pressures in the economy, remove barriers to the effective operation of markets and ensure that our tax system properly incentivises enterprise and investment.

    Measures include:

    1. Reform of the competition regime. A White Paper will be published in July setting out proposals for early legislation:

    modernising “complex monopoly” powers allowing the competition authorities independence to investigate sectoral markets under clear competition principles;
    a strong legal basis for competition authorities to promote competition across the economy;
    full independence backed by additional resources for the competition authorities; and
    consultation on introduction of criminal penalties for those involved in cartels.

    2. A new Capital Gains Tax regime that is overall more favourable to enterprise than that of the US. From April 2002 effective CGT rates for business assets will be reduced to 20 per cent after one year and 10 per cent after two and all subsequent years. The Government will also consider whether, during the lifetime of this Parliament, further changes to the non-business asset regime are necessary to improve incentives to invest and help businesses attract finance.

    3. Major reforms to modernise UK insolvency laws to reduce the penalties for honest failure and to create a modern and fair commercial system. A White Paper in July will propose:

    removing the Crown’s preferential right to recover unpaid taxes ahead of other creditors; and
    ensuring collective procedures are used instead of administrative receivership, which allows just one creditor to have control. (Special arrangements will be considered for securitisation).

    4. Improvements to the tax treatment of share options with a consultation on doubling the size of company that can qualify for Enterprise Management Incentives (EMI) to assets of £30 million.

    5. Publication later this year of a Green Paper on Reform of the Planning System to set out proposals for significant improvements in the processes for determining planning applications, to ensure that the system strikes the right balance between economic and environmental considerations and is flexible and well-adapted for the diverse needs of the regions.

    6. The appointment of Mr Ron Sandler, former CEO of Lloyd’s of London and Chief Operating Officer of Nat West, to conduct an independent review into the long-term retail savings industry including life-insurance. Working with the FSA, the review’s purpose will be to identify the competitive forces and incentives that drive the industries concerned, in particular in relation to their approaches to investment, and, where necessary, to suggest policy responses to ensure that consumers and the investment needs of the economy are well served.

    7. A major review of the awareness of business, enterprise and the economy across schools and further education, led by Sir Howard Davies, chairman of the Financial Services Authority, to create a strong enterprise culture for the future. This will report to Gordon Brown, Estelle Morris and Patricia Hewitt in January 2002.

    8. New measures to help small businesses start-up, grow and prosper:

    The extension, in Budget 2002, of the 10 per cent corporation tax band to reduce the tax bills of more small businesses;
    help for up to half a million businesses with the removal of automatic fines for late payment of VAT for firms with a turnover of less than £100,000. In future fines will only be levied after a written communication is first sent offering help and advice to sort out problems;
    publication today of proposals for a flat rate VAT scheme which will mean hundreds of thousands of small companies paying less tax and facing lower compliance costs.

    9. A review of payroll services for small firms, to make the system more effective and less costly. This will be led by Mr Patrick Carter, a member of the Public Services Productivity Panel. The review will focus on how payroll can be done more efficiently, with better support and use of technology. He has been asked to report by the end of September 2001.

    10. A review of DTI’s business support, in consultation with stakeholders and customers. The review will start by examining support to industrial manufacturing, and its initial findings will be reported to the Secretary of State for Trade and Industry in September.

    11. Announcement of progress on new Regional Venture Capital Funds for each English Region. Following the state-aids clearance the Government is announcing:

    agreement in principle to invest up to £60 million by the European Investment Bank’s venture capital arm, the European Investment Fund;
    seed funding by Government of up to £80 million;

    indicative targets for each region:

    £30 million for the North West

    £20 million for the East of England

    £30 million for the South East

    £25 million for the South West

    £25 million for Yorkshire and Humberside

    £15 million for the North East

    £20 million for the West Midlands

    £20 million for the East Midlands

    £50 million for London

    12. As announced in Budget 2001, publication shortly of a consultation document to ensure that Britain has a corporate tax regime that helps create the best possible environment for long-term business investment, both in and from the UK.

    13. A consultation paper “Radio Spectrum Management Review” published today by the Radiocommunications Agency is part of an independent review headed by Professor Martin Cave. The paper raises a number of areas for debate, including the best regulatory framework for the management of the spectrum; and pricing and auctions of the spectrum.

  • HISTORIC PRESS RELEASE : Government to pilot new model for ancillary staff in PFI Hospitals- Alan Milburn and Andrew Smith [June 2001]

    HISTORIC PRESS RELEASE : Government to pilot new model for ancillary staff in PFI Hospitals- Alan Milburn and Andrew Smith [June 2001]

    The press release issued by HM Treasury on 15 June 2001.

    A new approach to the involvement of certain ancillary staff in PFI schemes in the NHS is to be trialled, Alan Milburn, Health Secretary, and Andrew Smith, Chief Secretary to the Treasury, announced today.

    If successfully piloted, the new initiative would mean ancillary staff in areas such as catering, cleaning, laundry and portering staff remaining employees of the NHS but being managed by the private sector PFI partner, who would continue to assume responsibility for delivering such services to NHS/PFI hospitals. Where new ancillary staff are required for the delivery of facilities management services they would be recruited by the NHS under the same terms as existing staff.

    Speaking about the initiative, Alan Milburn said:

    “In line with the incoming Government’s manifesto, we are keen to ensure a new fairer deal for NHS staff so they can continue employment within the NHS.”

    Andrew Smith commented:

    “PFI and our wider PPP programmes are essential to revitalise the nation’s infrastructure. These pilots build on our reforms – increased transparency and consultation, improved treatment over staff transfers and a fair deal for staff over pensions – which go to the very heart of the public sector ethos that this Government has been keen to develop.

    “We will continue to improve the standards of service for patients and all other citizens who rely on effective public services and take what further steps are required to guarantee fair treatment to staff.”

    The pilots will be taken forward with hospital schemes that are sufficiently far advanced to allow early insight into its effectiveness. The results should be known before the end of the year. It is such building blocks that would underpin the projects and give us a high level of confidence in their viability.

    This government has already put into place three initiatives for PFI/PPP deals including:

    • transparency and consultations with staff allowing unions more access to procurement details;
    • improvement in the treatment of staff rights under TUPE;
    • a fair deal for pensions to protect staff pension rights.

    This new approach is fully consistent with existing guidance that there is no requirement to transfer ancillary staff to the private sector where this is compatible with achieving value for money.

  • Ed Balls – 2001 Speech at the Oxford Business Alumni Annual Lecture

    Ed Balls – 2001 Speech at the Oxford Business Alumni Annual Lecture

    The speech made by Ed Balls, the then Chief Economic Adviser to the Treasury, at Merchant Taylor’s Hall in London on 12 June 2001.

    INTRODUCTION

    It is a great pleasure and a privilege to be invited here today to give the first Oxford Business Alumni Annual Lecture.

    The last four years have been a dramatic and exciting period of change – both for the Said Business School and for British economic policy.

    Oxford University’s Business School has been transformed from a concept in 1990, its first MBA programme in 1996, to a fully-fledged School with 100 MBA students from some 30 countries and over 1,000 alumni.  With its first graduates now established in the business world, I congratulate the School and its alumni for its deserved reputation as a centre for dynamism and excellence in the application of ideas to business and commerce.

    The institutions and practice of British economic policy have also undergone radical change.  The new Competition Commission and strengthened Office of Fair Trading enacting new competition legislation.  The Financial Services Authority regulating financial services.  A network of Regional Development Agencies implementing a new and decentralised industrial policy.  Three year budgeting for central and now local government.  A new framework for fiscal policy based on greater transparency and clearly defined fiscal rules over the cycle, enshrined in legislation in the Code for Fiscal Stability.

    And, above all, a reformed Bank of England granted, de facto, operational independence to set British interest rates on this very day of the political calendar – the Tuesday following the 1997 general election.

    The decision to go for immediate independence fulfilled the Manifesto commitment to “reform the Bank of England to ensure that decision-making on monetary policy is more effective, open accountable and free from short-term political manipulation”.  From the moment that the new Chancellor of the Exchequer, Gordon Brown, first told the Permanent Secretary to the Treasury of his intentions at their first meeting after the General Election and handed him the draft letter to the Governor of the Bank of England, a small Treasury team remained locked in the office throughout the Bank holiday weekend to prepare the announcement.  All of us knew that this was a very major institutional change – for the Treasury but also for the Bank – over-turning decades of practice and tradition.

    It is also a very significant constitutional change – a Chancellor and a government choosing to cede such a significant power as setting national interest rates to an unelected agency of UK government.  In the words of the Times the next morning: “the most fundamental shake-up of the Bank of England since its formation nearly 303 years ago.”

    But, most important, it was – as the House of Lords Select Committee concluded two years later – “a radical new departure in economic policy-making” – establishing a new and distinctive British model of central bank independence.

    Different countries and regions have chosen and succeeded with different routes to stability, depending on their economic circumstances, history and traditions. For Britain in 1997 we needed a new route to stability and a new model of central bank independence.  A model suited to a medium-sized open economy in a fast-moving open global capital market and with a strong tradition of parliamentary and, through the media, public accountability in economic policy-making, but also a country with a recent track record of instability and economic failure.

    In this lecture I want to set out in more detail the background to this decision, why we felt central bank independence was the right route to stability for Britain and why changes in the global economy and the history of economic policy-making in Britain led us to choose the particular model and design features of the new British model of central bank independence.  And I will then take a look, at this still early stage, four years, four weeks and one general election later, at whether this model is delivering a credible, flexible and legitimate platform of stability for Britain.

    THE POLITICAL ECONOMY OF INDEPENDENCE

    Why did the new Labour government decide to move so quickly and decisively to establish the independence of the Bank of England in May 1997?

    Some argue that the Labour government would have been forced to do it anyway, and so tried belatedly to take the initiative.  But there was no expectation either in the Treasury, the Bank or indeed in the wider business or financial communities that the government would decide to opt for statutory independence.

    A second mistaken view is that independence would allow a new Chancellor to duck responsibility for difficult decisions. In fact, interest rates were raised immediately by Gordon Brown. But we also knew that the Chancellor who made the Bank independent would necessarily be held responsible for the subsequent economic record, albeit with less ability to directly influence it month by month. A number of former Conservative Chancellors had become advocates of independence in their memoirs.  But none ever felt either sufficiently pressured or sufficiently brave to take the plunge while in office.

    Nor was it an admission of impotence in the face of global financial markets – confirmation that national governments no longer have the power to make their own decisions about economic policy.  Yes, governments which pursue unsustainable monetary and fiscal policies are punished hard these days – and much more rapidly then thirty or forty years ago.  But the evidence of the past decade is that governments which are judged to be pursuing transparent and credible policies can attract inflows of investment capital at a higher speed, in greater volume and at a lower cost than ever before.

    A final mistaken view is that independence could avoid the potential for conflict between a new Labour chancellor and the Governor of the Bank of England.  It is true that the personalised “Ken and Eddie” monthly meeting had already become destabilising and unsustainable.  One did not have to anticipate a return to the days or Wilson, Callaghan and Lord Cromer to see the potential for media mischief with a new Chancellor.  It was a deliberate decision to move to independence straight after the first  – and thus last -old-style meeting between the Chancellor and Governor.  But the model of central bank independence we chose demands a continuing close relationship between the Chancellor and Governor.  And, in practice, to my mind, that relationship has become very close over the past four years by historical standards.

    There were three reasons, in my opinion, why central bank independence was the right policy for Britain in 1997.

    First, it demonstrated that the new government was determined to make a decisive break with the short-termism of past Labour  and Conservative governments.  It demonstrated a clear and unambiguous commitment to a new long-termism in British economic policy-making.  As with the two year freeze in public spending, handing over the short-term fine-tuning of the economy to a group of experts was an emphatic demonstration that this government was not looking for short-termist quick fixes or to duck difficult decisions.  It had a decisive impact on both the international reputation of the government and on the wider credibility of Treasury Ministers.

    Second, central bank independence liberated the Treasury.  There is no doubt to my mind, talking to colleagues, that setting interest rates, and all the short-term activity which came with that task, took at least half of the time and energy of past Chancellors, as well as being a monthly source of disagreement between No 10 and No 11 Downing Street. Since independence there has been – as the Treasury Permanent Secretary Sir Andrew Turnbull told the House of Lords select committee investigation – “a change of time horizon” at the Treasury. Handing over the short-term task of monthly decision-making on interest rates – to meet a target set by the government – has created the time, space and long-term credibility for the Chancellor, and senior Treasury management, to concentrate on all the other levers of economic policy and the government’s long-term economic objectives.

    For the Chancellor’s first words at the 1997 press conference were to restore, as the goals of economic policy, the 1944 white paper aims of high and stable levels of growth and employment.  We knew these objectives had radical implications across the widest range of government economic policies.  But stability alone could not by itself deliver full employment, higher living standards, better public services to tackle child poverty.  It is the reforms to enterprise, competition and productivity, employment policy and the welfare state, tax and public services – in the last parliament and in this new parliament – which will determine the government’s abilities to meet its long-term economic and social goals.

    But to achieve those long-term goals, and after the instability and short-termism of past decades, we knew that building a stable economy and a credible and forward-looking macroeconomic policy – with no deflationary bias – was an essential first step.  So the third – and most important – reason for the early move to independence was that it provided a unique opportunity to reshape the objectives, institutions and practice of British macroeconomic policy.

    After the violent boom-bust economic cycles of the past twenty or so years, any threat of a return to renewed short-termism and instability in macroeconomic policy-making would have quickly undermined any chance of focusing on long-term supply-side reform or establishing for business and public services a credible platform for long-term investment.

    A change of government provided a unique opportunity to learn from that history and changes in the global economy and establish a modern, pro-stability but post-monetarist macroeconomic framework for Britain.

    BRITISH INSTABILITY AND THE FAILURE OF MONETARISM

    The search for credibility had also prompted a change in economic direction when the government had last changed hands in 1979.  For by the mid and late 1970s, with unemployment and inflation both rising and the old idea of government fine-tuning a long-term trade-off between unemployment and inflation dead, reform was needed.

    But the new government, following a combination of IMF advice and a rigid application of the views of US economist Milton Friedman, took a hard-line monetarist direction.  The monetarist route to credibility was to tie the government’s hands and remove discretion from policy-making. It did so by relying on a stable relationship between the growth of the money supply and inflation and by pre-committing the government to set interest rates to control money growth.

    The problem was that – in the face of global financial integration and deregulation – what had seemed to be a stable relationship between money and inflation was collapsing.

    Persisting with these fixed rules, as monetary aggregates ran out of control, proved disastrous.  Because with its credibility at stake, the government was forced to continue with a deflationary policy of high interest rates and high exchange rate, in a continuing attempt to meet its monetary targets.  Attempting to achieve stability and low inflation by clinging doggedly to a series of intermediate indicators now implied perverse policy mixes – first highly deflationary, then grossly inflationary in the mid to late 1980s and then deeply deflationary again.

    But because the government had staked its anti-inflationary credentials on following these rules, it was faced with paying a heavy reputational price for breaking them.  As one money rule after another proved unsustainable and was replaced by the next, the government’s anti-inflationary credentials and commitment weakened and politics increasingly drove policy-making with little transparency or effective justification or explanation about policy decisions or mistakes.

    Nor did the attempt to shore up credibility through the exchange rate prove a better alternative.  Nigel Lawson’s destabilising flirtation with exchange rate targeting in 1987 and 1988, during which period the objective of UK monetary policy became damagingly ambiguous, was followed by the debacle of Britain’s membership of the Exchange Rate Mechanism which again had monetarist undertones – this time hoping for stable relationship between the exchange rate and inflation which did not exist.  The result was a second deep recession in decade, leaving the credibility and legitimacy of British macroeconomic policy-making badly damaged.

    The failure of monetarism as a macroeconomic doctrine was not its rejection of old-style fine-tuning or its desire to achieve long-term credibility in policy-making. Its failure was to introduce a rigidity into UK monetary policy-making at just the time when the reality of global capital markets demanded greater flexibility – with disastrous deflationary and destabilising consequences.

    Things did improve after sterling’s exist from the ERM in 1992 – in particular the shift to inflation targeting and publication of minutes of a monthly discussion between the Chancellor and the Governor.  But they did not constitute a credible and sustainable approach.

    Decision-making remained highly personalised, the inflation target was ambiguous and deflationary and – as we concluded in the Treasury’s recent assessment of the old and new systems – “policy-makers operated behind closed doors and decisions were often made with little or no explanation”. Most problematic, the suspicion remained that policy was being manipulated for short-term motives.  As Deputy Governor Mervyn King concluded in 1999, “long-term interest rates contained a risk premium that the timing and magnitude of interest rate changes might reflect political considerations.” Long – term interest rates remained 1.7 percent higher in Britain than in Germany while, despite the commitment to an inflation target of 2.5 per cent or less, financial market expectations of inflation 10 years ahead remained at 4.3 per cent in April 1997, and never fell below 4 per cent for the whole period, while by the time of the 1997 election the Treasury was forecasting inflation was forecast to rise above 4 per cent over the coming year.

    CREDIBILITY, FLEXIBILITY AND LEGITIMACY

    A decisive change in direction was needed to rebuild credibility and trust. The change of government in 1997, and the decision to opt for an independent central bank, provided the opportunity.  We needed a new British macroeconomic framework which could meet three central objectives:

    First, Credibility.  We needed a policy framework in which the government’s commitment to long-term stability – low inflation and sound public finances – commanded trust from the public, business and markets. For a new government, especially for a left of centre government out of power for twenty years, establishing credibility was a must.

    Second, Flexibility.  We needed a framework within which policymakers could take early and forward-looking action  – in monetary and fiscal policy – in the face of the ups and downs of the economic cycle without jeopardising the credibility of those long-term goals.  And we needed the flexibility to strike and sustain the right balance between monetary and fiscal policy.

    And third, Legitimacy.  The new framework had to be capable of rebuilding and entrenching public support and establishing a new cross-party political and parliamentary consensus for long-term stability.  A new consensus about goals – delivering low and stable inflation and supporting the government’s wider objectives for sustainable growth and employment  – without the old deflationary mistakes. But also a new consensus about institutions so that policymakers would be able to take difficult decisions, when necessary, in the public interest.

    These objectives were and are closely related.  Responding flexibly and decisively to surprise economic events is critical for establishing a track record for delivering long-term stability without huge swings in inflation, output or unemployment.  But without a credible framework which commands trust and a track record for making the right decisions, it is hard for policy to respond flexibly without immediately raising the suspicion that the government is about to sacrifice long-term stability and make a short-term dash for growth.

    And British economic policy-making was effectively starting from scratch in establishing reputation and public trust.  As the Chancellor of the Exchequer set out in his 1999 Mais lecture, in this new world of global capital markets, we needed a new post-monetarist model – a model based on what I described in a lecture to the Scottish Economic Society in 1997 as “constrained discretion”.  An approach which recognises that the discretion necessary for effective economic policy – short-term flexibility to meet credible long-term goals – is possible only within an institutional framework that commands market credibility and public trust with the government constrained to deliver clearly defined long-term policy objectives and maximum openness and transparency.

    DIFFERENT ROUTES TO STABILITY

    Of course, there is more than one route to stability for countries and regions – and different successful models of central bank independence – depending on their history, institutions and track record.  For Britain, the government’s commitment, in principle to membership of a successful single currency, provided the five economic tests demonstrate that membership is in the national economic interest and the cabinet, parliament and the people agree in a referendum, directly demonstrate this government’s understanding that, in principle, Euro membership could be an alternative and valid route to stability for Britain.

    In the US, Alan Greenspan has established huge credibility through his track record of monetary policy-making and his stress on transparency. And this credibility has allowed the Federal Reserve to maintain great policy flexibility without setting explicit targets for monetary policy – either for inflation or any other intermediate targets.

    The Bundesbank also had a highly successful history.  Credibility established over a 50 year track record of stability.  Flexibility, because this long-term credibility enabled the Bundesbank to regularly turn a blind eye to its publicly announced money supply targets.  And legitimacy which grew from the apolitical almost anti-political approach to monetary policy-making shared by the Bundesbank, the government and German people following the hyperinflation of the past and the subsequent post-war success of the German economy – and which continued despite the Bundesbank’s tendency to surprise the markets and its cautious approach to transparency.

    The drafters of the Maastricht treaty had this Bundesbank model at the centre of their thinking when they established the European Central Bank. But legal independence from political interference is only part of the story.  The fundamental question the Treaty designers had to decide – and which the ECB’s track record will establish – is whether the ECB could inherit the credibility and reputation of the Bundesbank or whether, like the UK, it was starting from scratch in building a reputation for long-term stability.

    The old Bundesbank-style approach would not have worked for Britain in 1997. Because it is only when there is already a long-established track record and tradition of successful stability-orientated policy-making that objectives do not need to be clearly set or decisions made in an open and transparent fashion. The UK had no such tradition.

    THE NEW BRITISH MODEL

    That is why we concluded that we needed a new approach for Britain in 1997 – and a new model of central bank independence. Macroeconomic policy could not hope to command credibility,  retain flexibility and rebuild legitimacy without a clearly defined long-term targets, proper procedures and a commitment to transparency and accountability.  Because to combine long-term credibility and short-term constrained discretion to respond flexibly in the face of economic shocks would only be possible if policy-makers were seen in practice to be genuinely pre-committed to delivering long-term stability and could build a track record for doing so.

    The new British model has five key features:

    • a strategic division of responsibilities:  with the elected government setting the wider economic strategy and the objectives for monetary policy, while monthly decisions are passed over to the central bank, thereby pre-committing the government to long-term stability;
    • a single symmetric inflation target:  with no ambiguity about the inflation target, no deflationary bias and no dual targeting of inflation and the short-term exchange rate;
    • independent expert decisions:  with monthly decisions to meet the government’s inflation target taken by an independent Monetary Policy Committee made up of the Governor, four Bank executives and four outside experts appointed directly by the Chancellor;
    • built-in flexibility:  with the Open Letter system to allow the necessary flexibility so that policy can respond in the short-term to surprise economic events without jeopardising long-term goals and proper procedures to ensure proper co-ordination of monetary and a medium-term fiscal policy;
    • maximum transparency and accountability: with monthly minutes published and individual vote attributed and with a strengthened role for parliament – so that the public and markets can see that decisions were being taken, within a legitimate framework, for sound long-term reasons and in order to support the government’s wider objectives for living standards and employment. I will discuss these features in turn.

    First, a strategic division of responsibilities between the Treasury and the Bank of England – with the Chancellor  responsible for what Governor Eddie George labeled in his 1997 Mais lecture the “political decision” of setting the target and the MPC responsible for the “technical decision” of achieving it. This was a clear change from the normal model of central bank independence.  The Federal Reserve, Bundesbank and the ECB are all “goal independent” – charged in legislation with delivering price stability but also responsible for defining the precise target for policy as well as making monthly decisions to meet that target.

    Why did we opt for operational independence?  Partly, as I will discuss in a moment so the Chancellor could introduce a new and non-deflationary inflation target.  But also to strengthen the  legitimacy of the unelected MPC in making monthly interest rate decisions by emphasising that its pursuit of stability was an important part of the government’s wider economic strategy to deliver high and stable growth and employment.

    As Deputy Governor Mervyn King said in his 1999 Belfast lecture, “the rationale for handing operational responsibility for setting interest rates to the MPC is that it is better qualified to make those decisions than elected politicians, whereas elected politicians have the democratic legitimacy to choose the target.”

    Some feared that this would lead to a less credible central bank. And it is, of course, entirely open to the government of the day to set a higher target for inflation, indeed – with the support of parliament – to suspend or even reverse independence entirely.  But in the absence of a long-term trade off between higher inflation and higher unemployment, there would be nothing to gain and everything to lose from setting a weaker target.

    Far from being a weakening of independence or a failure to be bold, I believe that our decision to have the government set the target was, in fact, a more radical approach which strengthened the independence of the central bank.  For having set the target for the central bank, it is very hard for the government to question the decisions of the MPC.  To doubt their decisions is either to doubt that the target is wrong, which is not their fault, or doubt their expertise which is hard for the government to do, especially if it has appointed the experts itself.  Instead, the incentive for the government of the day is publicly to back the MPC’s decisions.  And from the central bank’s point of view, as well as having the government firmly alongside it in making sometimes controversial decisions, it is able to spend its time each month debating how best to meet the inflation target rather than debating and disagreeing over what price stability should mean in practice.

    At no time has the government ever cast any doubt about the wisdom of the MPC’s individual decisions.  Indeed, while backing their strategy in public speeches, this Chancellor has been careful to avoid ever commenting on individual decisions – although the Treasury publicly reviews the MPC’s performance against the target. As Eddie George said in that 1997 lecture, this division of responsibilities ?helps to ensure that the Government and the Bank are separately accountable for their respective roles in the monetary policy process.?

    The second reason why we wanted the government to set the target was so that we could move from an asymmetric to a single symmetric inflation target.  And that we did in June 1997, changing from the ambiguously defined inflation target we inherited of 2.5 per cent or less to a clearly and symmetrically defined inflation target of 2.5 per cent.

    I said earlier that our commitment to stability rested on a rejection of the old idea that there was a long-run trade-off between unemployment and inflation.  But the rejection of the old-style fine-tuning means recognising that there is no long-term gain to be had either from trying to trade higher inflation for more output or jobs or lower inflation at the cost of output and jobs.

    A stable and symmetric target is the best guarantee of a pro- stability and pro-growth policy.  It requires that deviations below target are taken as seriously as above – removing the old deflationary bias of the ?2.5% or less? target which makes 2% better than 2.5% and 1% better than 2%, regardless of the impact on output and jobs.  It is the key innovation in the new model which ensures that monetary policy supports the government’s goals for high and stable levels of growth and employment.

    As the Governor of the Bank of England, Eddie George, said to the TUC Congress in September 1998:

    ?The inflation target we have been set is symmetrical.  A significant, sustained, fall below 2 1/2% is to be regarded just as seriously as a significant, sustained, rise above it.  And I give you my assurance that we will be just as rigorous in cutting interest rates if the overall evidence begins to point to our undershooting the target as we have been in raising them when the balance of risks was on the upside”.

    In our internal discussion at the Treasury in the Spring of 1997, some feared that dropping the aspiration to lower inflation than 2.5 per cent would damage the credibility of UK monetary policy.  I believe that the role of the symmetric target as the sole target for monetary policy has been critical in enabling the MPC to be both credible and flexible.  A symmetric target gives much great clarity – making it more straightforward for the MPC to justify publicly its decisions and be held to account for its record.  But, importantly, it has ensured that the MPC takes a forward-looking, as well as symmetric, view of the risks to the British economy.  If inflation is forecast to fall below 2.5 per cent the MPC does not wait to see how far it will fall but instead responds to get inflation back to target.

    The setting of the symmetric target, by the government, as the sole target for monetary policy, with the Treasury also responsible for exchange rate policy and intervention, has also removed any suspicion that the government might be trying to target the exchange rate as well as inflation. For in an open economy like Britain, with open capital markets, successfully trying to run dual targets for inflation and the exchange rate is flawed in theory and has proved destabilising in practice.  Britain’s economic history suggests that trying to deliver exchange rate target can only be achieved at the expense of wider instability – in inflation and the wider manufacturing and service sectors.

    As the Chancellor has said, the government understands the difficulties that the current high level of sterling has caused.  But any short-term attempt to manipulate the exchange rate, overtly or covertly, would put both the inflation target and – as in the late 1980s – wider stability at risk.  The objective of UK monetary policy is and remains clear and unambiguous – to meet a symmetric inflation target of 2.5 per cent.  The Government’s objective for the exchange rate remains a stable and competitive pound in the medium term.  But there is no short term exchange rate target competing with the inflation target.

    The third new departure to achieve independent expert decisions was the establishment of the new Monetary Policy Committee – a reform which at a stroke put behind us the old personalised approach to policy-making we had seen in the 1980s.  The role of the chancellor in appointing the four outsiders was, in my view, part of the delicate constitutional balance we were striking in moving to a legitimate model of central independence consistent with British-style ministerial accountability to parliament.

    Some, I am sure, doubted whether our commitment to appoint genuine and independent experts was real.  The quality and independence of all the appointments speak for themselves.  Importantly, they have demonstrated that it is perfectly acceptable and desirable for independent experts to disagree in public over difficult monetary policy judgments.  Should the outside appointments have had longer terms than three years or, as Willem Buiter argued, serve only one term?  Perhaps. Although, over the first four years of the MPC’s life, it would have made no difference.  It is hard enough to get experts to commit to leave their posts for three years.  And no issue of appointment or re-appointment has been influenced in any way by past voting behaviour.

    The fourth departure in the new British model is the built-in flexibility to allow the MPC to respond flexibly in the face of economic shocks and to allow an effective co-ordination of monetary and fiscal policy.

    The first of these is the Open Letter system.  If inflation goes more than one percentage point either side of 2.5 per cent, the Governor is required to write to the Chancellor, on behalf of the MPC, explaining why it has happened, what the MPC has done about it, how long it will take for inflation to come back to target and how the MPC’s response is consistent with the government’s economic objectives – both for price stability and high and stable levels of growth and employment.

    The Open letter system has not yet been used, confounding the fears of some that it would be used many times.  I believe its importance has not been properly understood.  Some have assumed it exists for the Chancellor to discipline the MPC if inflation goes outside the target range. In fact the opposite is true.  In the face of a supply-shock, such as a big jump in the oil price, which pushed inflation way off target, the MPC could only get inflation back to 2.5 per cent quickly through a draconian interest rate response  – at the expense of stability, growth and jobs.  Any sensible monetary policymaker would want a more measured and stability-oriented strategy to get inflation back to target. And it is the Open Letter system which both allows that more sensible approach to be explained by the MPC and allows the Chancellor publicly to endorse it. In this way, transparency and accountability have the potential to make it easier for the MPC to be flexible when necessary without risking its long-term credibility.

    Nor has the new system led to a less flexible approach to the co-ordination of fiscal and monetary policy.  In fact, monetary and fiscal policy are much more co-ordinated now than they ever were when the sole decision-maker was the Chancellor for both interest rates ands fiscal policy.  Partly because the Treasury representative explains the fiscal strategy to the MPC regularly, and in particular at the meeting before each Budget, on the basis of clearly defined fiscal rules set over the economic cycle.  But more importantly the MPC is free – in a transparent way – to respond with interest rates to fiscal policy.  So, in preparing the Budget, the Treasury knows that it will be judged both in terms of its medium-term fiscal rules and what the MPC does and says in its Minutes about fiscal policy.  There is no way, as in the past, that the Chancellor can any reward him or herself with an interest rate cut the day after the Budget as happened on numerous occasion in the past.

    Central to the discussion of each of these reforms is maximum transparency and accountability.  And that means transparency of both objectives and process – what goals the government is trying to achieve, how the target for monetary policy is being set to help meet those goals and how decisions are being made in order to achieve them.

    The most important transparency mechanism is the publication of the minutes of the MPC’s monthly meeting which not only sets out in detail the reasoning behind the decision but also sets out the range of views within the MPC and – critically – publishes the votes of named individual members. It is this transparency in published voting records which has done so much to deepen public understanding of the nature of monetary decisions.  The fact that independent experts, publicly accountable as individuals for the decisions, are seen to change their minds when the evidence changes has deepened legitimacy but also demonstrates that the MPC’s flexibility and forward-looking approach is in pursuit of a credible commitment to the inflation.  This innovation, with the minutes now published two weeks after the meeting – consistent with the ‘within 6 week’ formulation of the legislation – has contributed greatly to a much more mature debate in Britain about genuinely difficult monthly decisions.

    Some have argued that the particular arguments and views in the minutes should be attributed.  From the outside, this seems to me mistaken.  The strength of the meeting at present is that there is a genuinely open debate which the minutes reflect but which allow MPC members to be persuaded by argument.  Attributing argument to individuals would quickly lead to members reading prepared texts in the minutes at the expense of flexibility in decision-making and the genuinely deliberative nature of the meeting in which people can change their minds and be influenced by the debate.

    The minutes are the most important of an array of transparency and accountability reforms.  There is also the quarterly Inflation Report, and press conference, the role for the Treasury committee in cross-examining the MPC, the role of the non-executive directors in scrutinising, monetary policy arrangements, the annual report and parliamentary debate.  As the Treasury Select Committee concluded in its report on Bank of England accountability in July 1998:  ?We agree with the conclusion by the Organisation for Economic Co-operation and Development (OECD) in its country survey of the UK that “In international comparisons the United Kingdom’s framework is among the strongest in terms of accountability and transparency”.?

    CONCLUSION – AN ASSESSMENT

    I said I would end with an assessment of the framework’s track record over the last four years.  It is early to make considered judgments, but the signs are certainly encouraging.  The evidence does suggest that the British economy is putting past decades of instability behind it and that, with the new policy framework, we have been better able – and are now much better placed for the future – to deal with the ups and downs of the economic cycle.

    It is against the three objectives for modern macroeconomic policymaking – credibility, flexibility, and legitimacy – that the new system must be judged.

    Credibility

    The signs are certainly that – economically and politically – Britain has made a decisive step forward to a credible model of macroeconomic policy-making in Britain.  And largely because of the sound and forward-looking judgments of the MPC, the economy has sustained stability with growth close to its trend over the past four years.

    The simplest measure of policy credibility – long-term interest rates – have fallen to their lowest level for 37 years.  The differential between UK and German 5 year forward rates fell by 54 basis points between the beginning and the end of May, while 10 year interest rate differentials with Germany halved from 1.69 percentage points in the week before the May 1997 announcement to 0.88 percentage points by October. This differential has since been eliminated as the MPC’s track record has become established.

    In part, this reflects the economy’s inflation performance – a clear improvement in the last parliament compared to the previous one. Since 1997, inflation has averaged 2.4 per cent – in a historically narrow range of 1.8 per cent to 3.2 per cent – compared to 2.8 per cent and a range of 2 to 3.8 per cent in the period between exit from the ERM in October 1992 and the 1997 election.

    But it also reflects lower inflation expectations in the new regime.  Inflation expectations 10 years ahead averaged 2.71 per cent in the last parliament compared to 4.78 per cent in the period between October 1992 and May 1997.  And inflation expectations in the financial markets have also converged on the target for the first time with the inflation expectation implicit in index-linked 10 year gilts now down to 2.65 per cent, from 4.3 per cent the week before May 1st 1997.

    The behaviour of the labour market has also been very encouraging.  Wage inflation has remained over the past four years broadly in line with the 4.5 per cent a year which the Bank of England has said it believes is consistent with meeting the inflation target.  And this improvement in expectations of stability has not happened at expense of output or jobs. But it is still too early to say we have succeeded in entrenching expectations of long-term stability. Inflation expectations in the financial markets are still just above the 2.5 per cent inflation target while public opinion poll surveys suggest that public expectations of future inflation are at 3.5 per cent, down from 4 per cent pre-independence, but also still above the target.

    Employment growth has also been impressive. Far from leading to higher unemployment, as some might have predicted, central bank independence has seen unemployment continue to fall to its lowest level for over 25 years with employment rising – not just nationally but in every region of Britain – at a time when most economic forecasters were expecting unemployment to start to rise rather than fall.  To talk of the prospect of a return to full employment in every region is now a credible goal.

    More generally, the past four years have transformed this government’s standing as economic manager and turned upside down the historic reputations of the parties for economic competence – with the new government sustaining a 30 percentage point plus lead over the main opposition on this question throughout the election campaign.  It has laid to rest the myth that a left of centre government, with ambitions for full employment, to cut poverty and for stronger public services, cannot run a successful and prudent long-term economic policy.

    Indeed, far from preventing the government achieving its long-term goals, this new and credible framework – independence and clear and disciplined fiscal rules  – has enabled the government to take decisive steps forward towards full employment and greater investment in public services.

    The announcement in the 2000 Budget that – within these fiscal rules – spending was set to rise by an average 3.7 per cent a year until 2004 -with spending rising as a percentage of GDP – was taken in its stride by the financial markets.  Indeed, long-term interest rates fell following the March Budget – two weeks later, ten-year UK gilt yields were around 20 basis points lower.

    So as the new government starts its second term, the expectation in financial markets that stability and prudence is now at the heart of British economic policy, the vigilance of the MPC and the continuing discipline of the fiscal rules provide a credible platform for next year’s Budget and the 2002 spending review.

    Flexibility

    The second test is flexibility. It is early to make a definitive judgment.  Four years is not a long time in economic policymaking.  Some argue that this new British model has yet been tested against a severe national or world economic shock.  As I said an Open Letter has yet to be received by the Chancellor, although this is in itself a tribute to the MPC’s success in delivering inflation to target.  And the new system has yet to experience a change of government.

    But the new system has – in the past four years – handled an over-heating British economy in 1997; the Asian financial crisis of 1998 – which saw the CBI Industrial Trends business optimism measure fall from ?4 to a balance of ?41 in just a few months;  a trebling of the world oil price between end of 1998 and 2000; and the US and wider global economic slowdown since the beginning of this year.

    In each case, the MPC has responded in a decisive and forward-looking way – raising interest rates in 1997 and 1998; a series of rate cuts in the autumn of 1998 and spring of 1999; and again the easing of rates this year as the world economy slowed.

    The interest rates response in autumn 1998 was particularly important, with three cuts in interest rates between October and December 1998 – a cut of 1.25 percentage points.  In the old system, such a policy response from the Chancellor would have been interpreted as a sign of panic and crisis.  And some did fear that recession was on the way in 1999.  But the MPC’s handling of the situation stabilised the economy and boosted confidence.  And the 1999 Treasury forecast for growth that year was our worst forecast in the parliament only because we underestimated the strength of UK economic growth.

    Contrary to expectations, the new system has also delivered a much more effective co-ordination of monetary and fiscal policy than in the past.  Fiscal policy has been set in a predictable medium-term context.  The ratio of net debt has fallen to historically low levels.  And while economic theory would not have predicted that a 4 percentage point of GDP tightening of fiscal policy would have led to a stronger exchange rate, fiscal policy continues to support monetary policy over the economic cycle.

    Legitimacy

    The final test is legitimacy.  There is a new consensus in Britain both about the need for stability and the operational framework to achieve it.  Any decision to raise interest rates is bound to be unpopular.  But the fact that main opposition party has dropped its threat to reverse the move to bank independence, that there is now an all-party consensus in favour of this reform and that the MPC could cut interest rates during the election campaign without accusations of political bias, shows that this consensus is becoming deeper-rooted.

    But, given Britain’s history, that consensus cannot be taken for granted.  It depends not only on a sustained track record of stability, which no government can guarantee, but also on whether the government can deliver its wider  goals for high and stable levels of growth and employment – and so deliver rising living standards and better public services.  A continuing commitment to stability is a necessary means to these ends.  But, in the end, it will be the success or otherwise of the government’s wider economic agenda –  to close the productivity gap, promote full employment and invest in public services  – that the credibility and legitimacy of British economic policy will depend. These are now the challenges for this parliament.  So as the Prime Minister and Chancellor have said regularly over the past few weeks – the work goes on.

  • HISTORIC PRESS RELEASE : Gordon Brown and Alistair Darling Welcome launch of Sandler Review Consultation Document on Retail Savings [July 2001]

    HISTORIC PRESS RELEASE : Gordon Brown and Alistair Darling Welcome launch of Sandler Review Consultation Document on Retail Savings [July 2001]

    The press release issued by HM Treasury on 30 July 2001.

    The Government welcomed the launch by the independent Sandler review of its consultation document, which was published today.

    Gordon Brown MP, Chancellor of the Exchequer said:

    “UK institutional investors control more than £1.5 trillion in assets, including half the quoted equity markets. Following on from Paul Myners’ review, the work that Ron Sandler is undertaking is the next important stage, in the process of reviewing the efficiency and flexibility of the savings and investment industries.

    “Working closely with the FSA, Ron will be examining the forces and incentives which drive the retail savings industry and its approach to investment to see whether resources are being allocated efficiently and whether consumers are being well served.”

    Alistair Darling MP, Secretary of State for Work and Pensions said:

    “The vast bulk of this investment comes from pension schemes. We want to encourage more people to save for their retirement and to ensure that they receive value for money and a fair deal. Ron Sandler will be looking at ways in which customers can make more informed choices by having greater transparency and openness and as competitive a market as possible.  Ron Sandler’s wide-ranging review will complement the measures I have taken so far such as the 1% cap on stakeholder pension charges to get a better deal for the public.”

  • HISTORIC PRESS RELEASE : Government sets out way forward for Pension Funds’ Transaction Costs [July 2001]

    HISTORIC PRESS RELEASE : Government sets out way forward for Pension Funds’ Transaction Costs [July 2001]

    The press release issued by HM Treasury on 27 July 2001.

    HM Treasury today set out proposals to bring clarity and accountability to the payment of broking services by pension funds and other investors.

    The proposals are:

    • The Government has set out objectives for how the market needs to change. Progress towards these will be reviewed in two years? time.
    • Under amended Myners principles of investment, pension funds will have to understand and manage pension fund costs better, and soft commission arrangements will be tackled.
    • Paul Myners will be asked to develop a set of questions to assist pension fund trustees in requiring better disclosure and clearer incentives for their managers and brokers.
    • The FSA study of Best Execution will be widened to examine soft commission and the bundling of services provided by brokers.

    Announcing the proposals today Ruth Kelly, Economic Secretary said:

    “The challenge for the industry is to develop much clearer structures and incentives. The Government hopes this can continue to be achieved on a voluntary basis. But, if in two years time, there remain competition concerns, the Government will consider what further action is necessary to ensure that a sufficiently competitive environment exists.”

    The Government will publish its final response to the Myners review in September, together with a revised set of principles of investment. This revised set will include the following amendment in place of the final sentence of principle 6:

    Trustees, or those to whom they have delegated the task, should have a full understanding of the transaction-related costs they incur, including commissions.  They should understand all the options open to them in respect of these costs, and should have an active strategy – whether through direct financial incentives or otherwise – for ensuring that these costs are properly controlled without jeopardising the fund’s other objectives.

    Pension funds should not without good reason permit ‘soft’ commissions to be paid in respect of their transactions.