Tag: 2012

  • Michael Gove – 2012 Speech at BETT Show

    michaelgove

    Below is the text of the speech made by Michael Gove, the then Secretary of State for Education, at the BETT Show on 11 January 2016.

    Thank you very much, Dominic, for that kind introduction. I’m delighted to be here at BETT today.

    And I have to start by congratulating all the companies in this Hall.

    British companies are world-leaders in the field of educational technology, and going from strength to strength – the members of Besa, for example, increased exports by 12% in 2010. Crick Software, which has worked in the USA, Chile and Qatar and which already supplies 90% of UK primary schools, recently secured their biggest single order ever, supplying half of all schools in Moscow with Clicker 5 literacy software, fully translated into Russian.

    Promethean, which makes interactive whiteboards and educational software, signed a memorandum of collaboration with the Mexican Ministry of Education last June to work in primary and secondary education throughout Mexico.

    These are just a few of the hugely impressive achievements of British companies – and there are many more all around us. I’d also like to mention particularly all those shortlisted for the BETT awards tonight. Good luck to all nominees, and congratulations, in advance, to the winners…

    How technology has changed the world, and the workplace
    All around us, the world has changed in previously unimaginable and impossible ways. Most of us carry more advanced technology in the smartphone in our pocket than Neil Armstrong and Buzz Aldrin used to reach the Moon.

    Every day we work in environments which are completely different to those of twenty-five or a hundred years ago.

    Where once clerks scribbled on card indexes and lived by the Dewey Decimal system, now thousands of office workers roam the world from their desktop.

    Where once car manufacturing plants housed lines of workers hammering and soldering and drilling, now a technician controls the delicate operations of a whole series of robots.

    When I started out as a journalist in the 1980s, it was a case of typewriters and telexes in smoky newsrooms, surrounded by the distant clatter of hot metal.

    Now newsrooms – and journalists – are almost unrecognisable, as are the daily tools of the trade. The telex machine became a fax, then a pager, then email. A desktop computer became a laptop computer. My pockets were filled with huge mobile phones, then smaller mobile phones, a Blackberry, and now an e-reader and iPad.

    And with each new gadget, each huge leap forward, technology has expanded into new intellectual and commercial fields.

    Twenty years ago, medicine was not an information technology. Now, genomes have been decoded and the technologies of biological engineering and synthetic biology are transforming medicine. The boundary between biology and IT is already blurring into whole new fields, like bio-informatics.

    Twenty years ago, science journals were full of articles about the ‘AI Winter’ – the fear that post-war hopes for Artificial Intelligence had stalled. Now, detailed computer models show us more than we ever imagined about the geography of our minds. Amazing brain-computer-interfaces allow us to control our physical environment by the power of thought – truly an example of Arthur C. Clarke’s comment that any sufficiently advanced technology can seem like magic.

    Twenty years ago, only a tiny number of specialists knew what the internet was and what it might shortly become. Now, billions of people and trillions of cheap sensors are connecting to each other, all over the world – and more come online every minute of every day.

    Almost every field of employment now depends on technology. From radio, to television, computers and the internet, each new technological advance has changed our world and changed us too.

    But there is one notable exception.

    Education has barely changed

    The fundamental model of school education is still a teacher talking to a group of pupils. It has barely changed over the centuries, even since Plato established the earliest “akademia” in a shady olive grove in ancient Athens.

    A Victorian schoolteacher could enter a 21st century classroom and feel completely at home. Whiteboards may have eliminated chalk dust, chairs may have migrated from rows to groups, but a teacher still stands in front of the class, talking, testing and questioning.

    But that model won’t be the same in twenty years’ time. It may well be extinct in ten.

    Technology is already bringing about a profound transformation in education, in ways that we can see before our very eyes and in others that we haven’t even dreamt of yet.

    Now, as we all know, confident predictions of the technological future have a habit of embarrassing the predictor.

    As early as 1899, the director of the U.S. Patent Office, Charles H. Duell, blithely asserted that “everything that can be invented has already been invented.”

    In 1943, the chairman of IBM guessed that “there is a world market for maybe five computers”. The editor of the Radio Times said in 1936, “television won’t matter in your lifetime or mine”.

    Most impressively of all, Lord Kelvin, President of the Royal Society, scored a hat-trick of embarrassing predictions between 1897-9, declaring, “radio has no future”, “X-rays are clearly a hoax” and “the aeroplane is scientifically impossible”.

    A new approach to technology policy

    I don’t aspire to join that illustrious company by stating on record that this technology or that gadget is going to change the world. Nothing has a shorter shelf-life than the cutting edge.

    But we in Britain should never forget that one of our great heroes, Alan Turing, laid the foundation stones on which all modern computing rests. His pioneering work on theoretical computation in the 1930s laid the way for Turing himself, von Neumann and others to create the computer industry as we know it.

    Another generation’s pioneer, Bill Gates, warned that the need for children to understand computer programming is much more acute now than when he was growing up. Yet as the chairman of Google, Eric Schmidt, recently lamented, we in England have allowed our education system to ignore our great heritage and we are paying the price for it.

    Our school system has not prepared children for this new world. Millions have left school over the past decade without even the basics they need for a decent job. And the current curriculum cannot prepare British students to work at the very forefront of technological change.

    Last year’s superb Livingstone -Hope Review – for which I would like to thank both authors – said that the slump in UK’s video games development sector is partly the result of a lack of suitably-qualified graduates. The review, commissioned by Ed Vaizey who has championed the Computer Science cause in the Department for Culture, Media and Sport, found that the UK had been let down by an ICT curriculum that neglects the rigorous computer science and programming skills which high-tech industries need.

    It’s clear that technology is going to bring profound changes to how and what we teach. But it’s equally clear that we have not yet managed to make the most of it.

    Governments are notoriously flat-footed when it comes to anticipating and facilitating technical change. Too often, in the past, administrations have been seduced into spending huge sums on hardware which is obsolete before the ink is dry on the contract. Or invested vast amounts of time and money in drawing up new curricula, painstakingly detailing specific skills and techniques which are superseded almost immediately.

    I believe that we need to take a step back.

    Already, technology is helping us to understand the process of learning. Brain scans and scientific studies are now showing us how we understand the structure of language, how we remember and forget, the benefits of properly designed and delivered testing and the importance of working memory.

    As science advances, our understanding of the brain will grow – and as it grows, it will teach us more about the process of education.

    What can technology do for learning?

    Rather than rushing pell-mell after any particular technology, filling school cupboards with today’s answer to Betamaxes and floppy discs, we need to ask ourselves a fundamental question.

    What can technology do for learning?

    Three points immediately:

    First, technology has the potential to disseminate learning much more widely than ever before. Subjects, classes and concepts that were previously limited to a privileged few are now freely available to any child or adult with an internet connection, all over the world.
    Look at 02 learn, a free online library of lesson videos developed and uploaded by teachers. It has already delivered around 25,000 hours of teaching via 1000 lessons from every type of school and college, right across the country: science lessons from The Bishop Wand Church of England Comprehensive School, music lessons from Eton. What about iTunes U, where lectures from the world’s top universities are available at the touch of a button, and where the Independent Schools Council, Teaching Leaders and some of the best Academy Chains are working to put materials and lesson videos online? Or the hugely successful Khan Academy: more than 3.5 million students watch its educational videos every month and Google has donated $2 million for its materials to be translated into 10 languages.

    I’ve been lucky enough to see first hand in Singapore how brilliant lessons can be delivered through a mixture of online and teacher-led instruction. And in areas of specialist teacher shortage, specialist teaching could be provided for groups of schools online, giving more children the opportunity to learn subjects that were previously closed to them. The Further Maths Support Programme, for example, is using the internet to give poorer families access to specialist help for the STEP papers, which dominate the best universities’ selection process for Maths degree courses.

    As online materials grow and flourish, we all need to think about how we can guide students through the wealth of information and techniques freely available and accessible online.

    And, of course, I’m not just talking about opportunities for pupils to learn. The Royal Shakespeare Company is working with the University of Warwick on an online professional development learning platform to transform the teaching of Shakespeare in schools. Launching next month, the “rehearsal room” teaching resources will give teachers all over the world access to the insights and working practices of internationally-renowned actors, artists and directors, as well as specialist academics and teachers. The programme will even offer the chance to study for a Post Graduate qualification in the Teaching of Shakespeare.

    The Knowledge is Power Programme, one of the most successful and widely-studied charter school chains in America, is already using ubiquitous, cheap digital technology to share lessons from its most proficient teachers. Even the best teachers can hone their skills by watching their peers in action.

    Second, just as technology raises profound questions about how we learn, it also prompts us to think about how we teach.

    Games and interactive software can help pupils acquire complicated skills and rigorous knowledge in an engaging and enjoyable way. Adaptive software has the ability to recognise and respond to different abilities, personalising teaching for every pupil. With the expert help of a teacher, students can progress at different rates through lessons calibrated to stretch them just the right amount.

    Britain has an incredibly strong games industry, with vast potential to engage with education both in this country and all over the world. We’re already seeing these technologies being used in imaginative ways. Games developed by Marcus Du Sautoy, Professor of Mathematics at Oxford, are introducing children to advanced, complicated maths problems – and are producing great results.

    Before Christmas I visited Kingsford School in Newham, where the Department for Education is working with the Li Ka Shing Foundation and the highly respected Stanford Research Institute. Their pilot scheme uses computer programmes to teach maths interactively – for example, showing a race between two people on screen and inviting pupils to plot their time and distance on a graph, then adjust it for variables.

    Again, this pilot hasn’t been dictated by central government, and we haven’t developed the programme. But Stanford already says it is one of the most successful educational projects they have seen and I am looking forward to seeing the results.

    Third, technology brings unprecedented opportunities for assessment. Teachers can now support pupils’ learning by assessing their progress in a much more sophisticated way, and sharing assessments with pupils and parents.

    Each pupil’s strengths and weaknesses can be closely monitored without stigmatising those who are struggling or embarrassing those are streaking ahead. Teachers can adjust lesson plans to target areas where pupils are weakest, and identify gaps in knowledge quickly and reliably.

    Sophisticated assessment like this is already being used in schools around the country. Brailes Primary School, for example, a small rural school on the border of Warwickshire and Oxfordshire, uses online tools enabling teachers to use pre-assembled tests, or design tests of their own. One of the teachers, Deborah Smith, has praised the system, saying, “it has enabled me to differentiate my teaching to meet the needs of different groups. The assessments are quick and simple to prepare…leaving more time for planning and teaching.”

    In Chichester School for Boys, electronic voting pads provide students with instant feedback during classes. Teachers get real-time feedback on how well their material is being understood – even on a question by question basis.

    These are just three ways in which technology is profoundly changing education today – and I am sure that there will be more.

    We’re not going to tell you what to do

    While things are changing so rapidly, while the technology is unpredictable and the future is unknowable, Government must not wade in from the centre to prescribe to schools exactly what they should be doing and how they should be doing it.

    We must work with these developments as they arise: supporting, facilitating and encouraging change, rather than dictating it.

    By its very nature, new technology is a disruptive force. It innovates, and invents; it flattens hierarchies, and encourages creativity and fresh thinking.

    I could say the same of our whole school reform programme. In fact, I’m fairly sure I have said the same.

    Just as we’ve devolved greater autonomy to schools, and put our trust in the professionalism of teachers; just as we’ve lifted the burden of central prescription, and given heads and schools power over their own destiny; just as the internet has made information more democratic, and given every single user the chance to talk to the world; so technology will bring more autonomy to each of us here in this room.

    This is a huge opportunity. But it’s also a responsibility.

    We want to focus on training teachers

    That’s why, rather than focusing on hardware or procurement, we are investing in training individuals. We need to improve the training of teachers so that they have the skills and knowledge they need to make the most of the opportunities ahead.

    It is vital that teachers can feel confident using technological tools and resources for their own and their pupils’ benefit, both within and beyond the classroom, and can adapt to new technologies as they emerge. That means ensuring that teachers receive the best possible ITT and CPD in the use of educational technology.

    Working with the TDA, we will be looking at initial teacher training courses carefully in the coming year so that teachers get the skills and experience they need to use technology confidently. And we’re working with Nesta who, supported by Nominet Trust and others, are today announcing a £2m programme to fund and research innovative technology projects in schools.

    We must also encourage teachers to learn from other schools which are doing this particularly well.

    Some ICT teaching in schools is already excellent – as reported in the most recent Ofsted report on ICT education and last year’s Naace report, “The Importance of Technology”.

    Sharing that excellence will help all schools to drive up standards. We are already working with the Open University on Vital, a programme encouraging teachers to share ICT expertise between schools. High-performing academy chains will also play a huge role in spreading existing best practice and innovation between schools.

    And Teaching Schools across the country are already forming networks to help other schools develop and improve their use of technology. The Department for Education is going to provide dedicated funding to Teaching Schools to support this work.

    The current, flawed ICT curriculum

    The disruptive, innovative, creative force of new technology also pushes us to think about the curriculum.

    And one area exemplifies, more than any other, the perils of the centre seeking to capture in leaden prose the restless spirit of technological innovation.

    I refer, of course, to the current ICT curriculum.

    The best degrees in computer science are among the most rigorous and respected qualifications in the world. They’re based on one of the most formidable intellectual fields – logic and set theory – and prepare students for immensely rewarding careers and world-changing innovations.

    But you’d never know that from the current ICT curriculum.

    Schools, teachers and industry leaders have all told us that the current curriculum is too off-putting, too demotivating, too dull.

    Submissions to the National Curriculum Review Call for Evidence from organisations including the British Computer Society, Computing at School, eSkills UK, Naace and the Royal Society, all called the current National Curriculum for ICT unsatisfactory.

    They’re worried that it doesn’t stretch pupils enough or allow enough opportunities for innovation and experimentation – and they’re telling me the curriculum has to change radically.

    Some respondents in a 2009 research study by e-Skills said that ICT GCSE was “so harmful, boring and / or irrelevant it should simply be scrapped”. The Royal Society is so concerned that it has spent two years researching the problem with universities, employers, teachers and professional bodies – so I’m looking forward to its report, due to be published on Friday. And while ICT is so unpopular, there are grave doubts about existing Computer Science 16-18 courses.

    In short, just at the time when technology is bursting with potential, teachers, professionals, employers, universities, parents and pupils are all telling us the same thing. ICT in schools is a mess.

    Disapplying the Programme of Study

    That’s why I am announcing today that the Department for Education is opening a consultation on withdrawing the existing National Curriculum Programme of Study for ICT from September this year.

    The traditional approach would have been to keep the Programme of Study in place for the next four years while we assembled a panel of experts, wrote a new ICT curriculum, spent a fortune on new teacher training, and engaged with exam boards for new ICT GCSES that would become obsolete almost immediately.

    We will not be doing that.

    Technology in schools will no longer be micromanaged by Whitehall. By withdrawing the Programme of Study, we’re giving schools and teachers freedom over what and how to teach; revolutionising ICT as we know it.

    Let me stress – ICT will remain compulsory at all key stages, and will still be taught at every stage of the curriculum. The existing Programme of Study will remain on the web for reference.

    But no English school will be forced to follow it any more. From this September, all schools will be free to use the amazing resources that already exist on the web.

    Universities, businesses and others will have the opportunity to devise new courses and exams. In particular, we want to see universities and businesses create new high quality Computer Science GCSEs, and develop curricula encouraging schools to make use of the brilliant Computer Science content available on the web.

    I am pleased that OCR is pioneering work in this field, and that IBM and others are already working on a pilot. Facebook has teamed up with UK-based organisation Apps for Good to offer young people the chance to learn how to design, code and build social applications for use on social networks, via a unique new training course which they aim to make freely available online this year to potential users all over the world.

    And other specialist groups have published or are about to publish detailed ICT curricula and programmes of study, including Computing At School (led by the British Computer Society and the Institute of IT), Behind the Screens (led by eSkills UK), Naace and others, with considerable support from industry leaders.

    Imagine the dramatic change which could be possible in just a few years, once we remove the roadblock of the existing ICT curriculum. Instead of children bored out of their minds being taught how to use Word and Excel by bored teachers, we could have 11 year-olds able to write simple 2D computer animations using an MIT tool called Scratch. By 16, they could have an understanding of formal logic previously covered only in University courses and be writing their own Apps for smartphones.

    This is not an airy promise from an MP – this is the prediction of people like Ian Livingstone who have built world-class companies from computer science.

    And we’re encouraging rigorous Computer Science courses
    The new Computer Science courses will reflect what you all know: that Computer Science is a rigorous, fascinating and intellectually challenging subject.

    After all, the founder of Facebook, Mark Zuckerberg, is one of the most innovative and successful proponents of Computer Science today. But his computing skills are just as rigorous as the rest of his talents – which include Maths, Science, French, Hebrew, Latin and Ancient Greek.

    Computer Science requires a thorough grounding in logic and set theory, and is merging with other scientific fields into new hybrid research subjects like computational biology.

    So I am also announcing today that, if new Computer Science GCSEs are developed that meet high standards of intellectual depth and practical value, we will certainly consider including Computer Science as an option in the English Baccalaureate.

    Although individual technologies change day by day, they are underpinned by foundational concepts and principles that have endured for decades. Long after today’s pupils leave school and enter the workplace – long after the technologies they used at school are obsolete – the principles learnt in Computer Science will still hold true.

    An open-source curriculum

    Advances in technology should also make us think about the broader school curriculum in a new way.

    In an open-source world, why should we accept that a curriculum is a single, static document? A statement of priorities frozen in time; a blunt instrument landing with a thunk on teachers’ desks and updated only centrally and only infrequently?

    In ICT, for example, schools are already leading the way when it comes to using educational technology in new and exciting ways – and they’re doing it in spite of the existing ICT curriculum, not because of it.

    The essential requirements of the National Curriculum need to be specified in law, but perhaps we could use technology creatively to help us develop that content. And beyond the new, slimmed down National Curriculum, we need to consider how we can take a wiki, collaborative approach to developing new curriculum materials; using technological platforms to their full advantage in creating something far more sophisticated than anything previously available.

    This means freedom and autonomy

    Disapplying the ICT programme of study is about freedom. It will mean that, for the first time, teachers will be allowed to cover truly innovative, specialist and challenging topics.

    And whether they choose a premade curriculum, or whether they design their own programme of study specifically for their school, they will have the freedom and flexibility to decide what is best for their pupils.

    Teachers will now be allowed to focus more sharply on the subjects they think matter – for example, teaching exactly how computers work, studying the basics of programming and coding and encouraging pupils to have a go themselves.

    Initiatives like the Raspberry Pi scheme will give children the opportunity to learn the fundamentals of programming with their own credit card sized, single-board computers. With minimal memory and no disk drives, the Raspberry Pi computer can operate basic programming languages, handle tasks like spread sheets, word-processing and games, and connect to wifi via a dongle – all for between £16 and £22. This is a great example of the cutting edge of education technology happening right here in the UK. It could bring the same excitement as the BBC Micro did in the 1980s, and I know that it’s being carefully watched by education and technology experts all over the world.

    As well as choosing what to study, schools can also choose how.

    Technology can be integrated and embedded across the whole curriculum.

    In geography lessons, for example, pupils could access the specialised software and tools used by professional geographers, allowing them to tackle more challenging and interesting work. Molecular modelling software could bring huge advantages for science students.

    The Abbey School in Reading has already been piloting 3D technologies for teaching Biology, showing 3D images of the heart pumping blood through valves, and manipulating, rotating and tilting the heart in real time. As Abbey School Biology teacher Ros Johnson said, the 3D technology “has made me realise what they weren’t understanding…what I can’t believe is how much difference it has made to the girls’ understanding”.

    This isn’t a finished strategy – but it shows our ambition
    The use of technology in schools is a subject that will keep growing and changing, just as technology keeps growing and changing.

    But we can be confident about one thing. Demand for high-level skills will only grow in the years ahead. In work, academia and their personal lives, young people will depend upon their technological literacy and knowledge.

    And this doesn’t just affect our country. Every nation in the world will be changed by the growth of technology and we in Britain must ensure that we can make the most of our incredible assets to become world-leaders in educational technology.

    Today has seen the conclusion of the Education World Forum here in London. I cannot emphasise enough how important it is for me, personally, that we learn from the highest performing education systems – some of whom I am delighted to see represented here – and I am very grateful to everyone who has taken the time and trouble to come to London for this event.

    I’m not here today to announce our final, inflexible, immutable technology strategy. There’s no blueprint to follow – and we don’t know what our destination will look like.

    I’m setting out our direction of travel, and taking the first few steps. There is lots more to come, and we will have more to say over the course of the year.

    I’d also like to welcome the online discussion launched today at schoolstech.org.uk and using the twitter hashtag #schoolstech. We need a serious, intelligent conversation about how technology will transform education – and I look forward to finding out what everyone has to say.

    We want a modern education system which exploits the best that technology can offer to schools, teachers and pupils. Where schools use technology in imaginative and effective ways to build the knowledge, understanding and skills that young people need for the future. And where we can adapt to and welcome every new technological advance that comes along to change everything, all over again, in ways we never expected.

    Events like the BETT show are crucial in showcasing the best and brightest of the technology industry, showing what can be done – and what is already being achieved. We will depend upon your insight and ideas, your expertise and experience, as you take these technologies into your schools and try them with your students.

    Thank you again to BETT for inviting me, and I wish you all good exploring today.

  • Eric Pickles – 2012 Speech at Local Government Summit

    ericpickles

    Below is the text of the speech made by Eric Pickles, the then Secretary of State for Communities and Local Government, at the Queen Elizabeth II Conference Centre in London on 16 January 2012.

    There is no greater responsibility, no higher priority for this Government than to get the nation back on track towards renewed, long-term, sustainable growth.

    Growth puts people in jobs, keeps families in homes, makes our towns and cities great places to live.

    Getting public spending under control has been vital and non-negotiable.

    We’ve strained every sinew to do it in a way that protects the most vulnerable.

    Today is Blue Monday – officially the most depressing day of the year, as people look ahead to months of chilly weather and paying back their Christmas bills.

    This year, it will be tough for many people – facing pay freezes at work, be it in the public or private sector, as well as a rising cost of living.

    This is why it’s essential in February and March, as town hall budgets are set, that councils sign up to the council tax freeze.

    It’s practical help every councillor can offer to their ward constituents. A vote against the council tax freeze is a vote for punishing tax-rises. Local taxpayers will remember that decision next time they cast their vote at the ballot box.

    Councillors have a moral duty to sign up to keep down the cost of living – anything less is a kick in the teeth to hard-working, decent taxpayers.

    But cutting the deficit is only the first step.

    We want to give investors confidence to invest.

    Make it easy for entrepreneurs to bring their ideas to market.

    Make Britain one of the best places in Europe, if not the world, to start and grow and business.

    Now in the past, supporting growth might have been seen as a job for the Treasury and Business Department.

    But we simply don’t have that luxury today.

    This is a job for every part of Government.

    Including my Department.

    I am determined that the Department for Communities and Local Government should be at the forefront of creating the right conditions for local economies to thrive.

    Not least because localism and growth are two sides of the same coin.

    Localism and Growth

    You can’t engineer, can’t manufacture growth through nationally-dictated plans and blueprints.

    However well-meaning, however expertly devised, Regional Development Agencies simply didn’t deliver.

    Even in the five years to 2008, before the crunch really bit, the number of private sector jobs fell in Birmingham, in Nottingham, in Sheffield, Bradford, Croydon and Leicester.

    Instead of trying to impose growth from Whitehall, we want to encourage and celebrate local leadership, ingenuity, and enterprise.

    Instead of the public sector going solo, we want to get councils and entrepreneurs working together.

    So we’re creating the conditions for local leadership.

    Local Enterprise Partnerships put civic leaders and local entrepreneurs in the driving seat as never before.

    Partnerships now host two dozen Enterprise Zones – with tax breaks and simple planning rules to attract new firms.

    Partnerships have advised firms bidding for the two point four billion pounds available under Regional Growth Fund – helping safeguard jobs everywhere from steelyards in Redcar, to biotechnology start-ups in Plymouth.

    And now we’re reforming business rates, so that councils see a direct benefit to their own finances from boosting the local economy…

    …and this will give every council every possible reason to work with businesses and entrepreneurs.

    But perhaps the policy that best encapsulates the new approach is the Growing Places Fund.

    Half a billion quid is up for grabs for local leaders to support enterprise, encourage businesses, create the conditions for local growth.

    What have we asked Local Enterprise Partnerships to do to get their hands on it?

    Not complete a form the size of a telephone directory…

    Not report every five minutes on every step along the way…

    But set out they want to do with the cash, and what they aim to deliver, in terms as simple as we could possibly make them.

    It’s a process that is based on our trust in local leaders to deliver.

    This means making tough decisions and putting the cash where it can make the biggest difference – not where it’s most expedient, or will appease the most people.

    Get this right, vindicate our trust, and this could be the shape of things to come.

    Get it wrong, and well – we’re back to the strings and guidelines, the gentle breath of the overseer tickling the hairs on the back of your neck.

    Over to You

    So the spotlight falls on you.

    To a great extent, what happens in your area next is in your hands.

    We’ve binned the guidance, the strictures, the blueprints.

    As local leaders – whether in business or the Town Hall – for the first time in decades – you’ve got a clear run.

    Your communities are looking to you to lead. To shape the future of your local economies.

    Now after a little over a year of Local Enterprise Partnerships, there has been good progress.

    Coventry and Warwickshire have worked with local banks to unlock finance for start-ups.

    Tees Valley Unlimited are working with the UK’s Trade and Investment service to draw in foreign investment.

    Places with Enterprise Zones, from Harlow to Hull, are getting on with the necessary to make them a success.

    Manchester, for example, have unveiled their detailed plans for Airport City, with the potential to create twenty thousand new jobs, and dozens of firms are already keen to move in.

    So on the one hand there’s a huge amount going on.

    But on the other there’s absolutely no room for complacency – especially when we can all feel the chill winds blowing from the Continent.

    So use today to galvanise your approach.

    Some people have said, “we’d love to do our bit but we’d really like some more instruction.”

    It’s a play: Waiting for Guidance.

    But the best aren’t hanging around.

    Look at the West of England.

    They’ve not only secured an Enterprise Zone…

    They’re also setting up “Enterprise Areas” too, with similar, straightforward planning rules, the better to attract new firms.

    They didn’t wait to be told. They thought, “what can we do?” and they did it.

    Some have said, “there’s money coming in but it’s going to our neighbours, or the upper tier, or the lower tier.”

    Well then – cut a deal.

    If you’re going to make the most of localism, you can’t waste time bickering.

    The best will join forces.

    Some will consider pooling their business rate incomes under the new system…

    …sharing the risks and rewards, and helping everyone plan ahead.

    If you’re not quite there yet – if you know in your heart of hearts that’s more you could be doing…

    Really use today.

    Look at your contemporaries in the room.

    Learn from each other.

    Challenge each other.

    If there are people here you don’t know yet – get stuck in.

    Who knows if that stranger isn’t the person who can make the links between your universities and business, between your exporters and new markets, between your entrepreneurs and lenders.

    Above all, there is no point clinging to the old levers and approaches.

    The world has changed.

    Nobody’s going to try and force a solution on you.

    Nobody’s going to stop you pursuing your own.

    Be creative, be ambitious. Do what it takes to create the conditions for your economy to grow.

    What it Means

    I want to end by thinking about what’s at stake here.

    Not too far from my constituency is the Ford plant at Dagenham.

    As British engineering faltered towards the end of the last century, it became a symbol of decline.

    Of glories past.

    The kind of place that motorists snatch in glimpses as they hurtle past on the A13.

    Now of course there are still challenges for British automotive industry.

    But believe me, it’s on the way back.

    In the year to last October…despite the tough conditions…despite the uncertainty in the markets…this country increased exports of vehicles by nearly twenty per cent.

    Who’d have dreamt that ten years ago.

    Dagenham, meanwhile, now produces a million engines each year, and employs four thousand people.

    Creating the conditions for growth is about turning places like Dagenham from symbols of decline, to symbols of hope.

    It’s about making space for new industries that give places a sense of purpose.

    And about giving the people who look to you a reason to feel proud.

    It goes back to why you’re here today.

    I doubt very much that anyone gets into public affairs purely for the love of a beautiful spreadsheet, a snappy minute or a well-chaired committee.

    We do it because we want to make change happen.

    Today, you’ve got a golden opportunity to be the people who create growth, support jobs, underpin the prosperity and quality of life of the communities you work in.

    It’s up to you to make the most of it.

  • George Osborne – 2012 Speech to Asia Financial Forum

    gosborne

    Below is the text of the speech made by George Osborne, the Chancellor of the Exchequer, in Hong Kong on 16 January 2012.

    I am delighted to have the opportunity to address this Forum, to speak with such a distinguished audience and to do so here in Hong Kong.

    I had a very useful discussion earlier today with Chief Executive Donald Tsang. He deserves our thanks for the excellent job he has done in his years as Chief Executive.

    Later today I will fly to Beijing and then Tokyo.

    It is no surprise or coincidence that my first trip abroad in 2012 should be to Asia.

    It reflects instead the deliberate, conscious effort that the British Government places on deepening Britain’s partnership with Asia.

    This Asian partnership is not a substitute for our close working relationship with our neighbours in the European Union, our strong links with North America. It is an essential complement to those friendships.

    For Asia will be the engine of world growth in this year and the years ahead.

    I have spent much of my time in Office in talks about the eurozone.

    The eurozone has made progress in recent months, in particular the provision of liquidity to banks by the ECB.

    But of course there remains more to do, as the euro area itself acknowledges.

    No one likes to see credit ratings downgraded, but what matters much more are the actions western countries take to restore their own fiscal sustainability and take the structural reforms necessary to ensure productive, competitive economies.

    All European economies need to tackle the structural obstacles to growth that we’ve simply not had the political will to address in recent years.

    It is good news that these issues of growth and competitiveness will be the focus of European leaders’ discussions later this month.

    Britain is taking all these problems head on.

    Yes, we’re reducing our deficit with a strong, credible and comprehensive deficit-reduction plan.

    But we’re also reforming welfare entitlements, removing regulation, making it easier to employ people and create businesses, overhauling education, reducing our corporate taxes to some of the lowest in the world, and championing within the EU a deepening of the single market and leading across the world the cause of greater free trade.

    That’s why, as we look to this difficult year ahead, I want to focus today on three reasons to be optimistic for the future.

    Three reasons for Britain to be bold.

    The first reason is this:

    A richer, stronger Asia is an opportunity for the world, not a threat – we should be bold enough to say it and to explain it to our own populations.

    Second, we in Britain can build on our position as the home of Asian investment and Asian finance in Europe – provided we’re bold enough to do what it takes to make that happen, and we will.

    And third, with a new alliance between Britain and our friends in Asia, we can be bold in defeating the forces of protectionism and make global finance a force for good, not instability.

    First, a richer, stronger Asia.

    There is no doubt that this is one of the most remarkable achievements in our modern history, and you’ll know the story far better than I do. The Chinese economy is 15 times larger than it was when I first visited China as a student two decades ago. In 1960, South Korea had the same income per head as those in Sub-Saharan Africa. Today, South Koreans enjoy an average income of $23,000.

    What is the human story behind all these statistics? The desire of people to have a better life and to leave to their children more than they were born with.

    It is the most powerful force for progress we have ever known – and here in Asia it has driven an economic transformation.

    That hasn’t always been easy for those in the west.

    I do not believe, as some argue, that the rise of the east is a threat to the west.

    It is the strength of Asian economies which mean world growth in this decade and the next will be higher than the past 30 years.

    Of course there are challenges as we adjust to sharp shifts in economic growth and power.

    These adjustments can be painful when unemployment is a challenge in many countries across the world, and where competition for scarce resources affects the prices of key commodities.

    In the past, when developed economies were weak, oil prices were self-correcting forces.

    In the current crisis, demand from Emerging Economies has kept prices high.

    But these problems are the problems of success – the problems of a stronger world economy.

    Globalisation is a force for good.

    Not only has it been a force for poverty reduction far greater than all the aid programmes across the world put together.

    Not only has it allowed people here to have aspirations and ambitions beyond the dreams of their parents and grandparents.

    But it also provides huge opportunities to trade and invest for countries who seize them, and I believe that we can make Britain the home of Asian investment and Asian finance in Europe.

    This is my second reason for optimism.

    If we take the right steps, if we’re bold, then growth in Asia means growth in Britain.

    It is precisely as Asian economies become richer and become nations of consumers that hundreds of millions of people will want to buy the things that British companies can sell them.

    They will want to buy modern medicines for the first time – and when they do so, I want to make sure it is from pharmaceutical firms like Glaxo SmithKline and Astra Zeneca, the largest employer in the constituency I represent.

    They will need modern insurance, banking, and accountancy services, and when they seek those services I want them to do so from companies like HSBC, Prudential, Barclays and Standard Chartered.

    The wealthiest will become consumers of Rolls-Royces made in Sussex, and Bentleys made in Crewe, dressed in Burberry clothes manufactured in Yorkshire.

    And – like a generation of Japanese tourists before them – they will want to travel.

    And when they do, I want them to go on holiday to Britain. I want them to go this year, the year of the spectacular London Olympics and the Queen’s Diamond Jubilee celebrations.

    And when they go I want them to fly here on the wings of Airbus planes made in North Wales, powered by Rolls Royce engines assembled in Derby. For Britain is one of the top ten manufacturers in the world as well as a global financial centre.

    If we are going to make the most of what the growing economies of Asia have to offer Britain, then we need make sure we have dealt with the problems in Britain’s economy.

    And we are.

    For one of the illusions of globalisation has been that the countries of the west could live indefinitely on the cheap credit and low inflation that the emerging economies of the East provided for us – that we could go on forever borrowing money from hard-working Chinese savers to buy the things those Chinese workers were making for us.

    The financial crisis and the deep recessions has been the toughest of reminders of the simple truth that you have to earn your living in this world.

    And the lesson of the past year has been that global confidence in a country depends on its determination to deal decisively with the challenges it faces – and by getting to grip with our debts, Britain has shown it is determined to do that.

    As I’ve said, we are undertaking major reforms to increase Britain’s competitiveness.

    Cutting business tax rates to among the lowest in the developed world, scrapping regulation on small firms, reforming welfare and education, and creating the most flexible workforce in Europe.

    The UK is already one of the most open economies in the world – with a stable political system, a commitment to the rule of law and free trade.

    Even more than it already is, we want Britain to become one of the easiest places to invest, to raise capital, to start a business, to expand and to export from.

    And our links with Asia grow stronger and stronger.

    The UK is now the largest source of foreign direct investment to China from within the whole EU and UK goods exports to China rose by 20% last year, and 40% the year before that.

    UK goods exports to Hong Kong rose by 19%.

    This is largely driven by the ingenuity and innovation of the Asian and British private sectors.

    But we have got to do more if we are to be the home of Asian investment in Europe.

    The British Government needs to roll up its sleeves and make it happen.

    Let me tell you how.

    Last year, my colleague William Hague, the British Foreign Secretary, spoke at this very Forum and said he wanted to refocus Britain’s diplomatic efforts on the East.

    He has been good to his promises. Our embassy in China has expanded significantly and the work of our trade promotion agency, UKTI, has increased its presence across China.

    As well promoting British investment in Asia, we are actively seeking Asian investment in Britain and its infrastructure.

    We are investing in a new generation of transport, energy and communication networks for our country. Last week alone, we committed to a new high speed rail link to connect our largest cities. The Olympic Park is the largest urban regeneration scheme in Western Europe.

    Here and in Beijing I will be promoting infrastructure as just one of the opportunities the UK brings for Chinese investors, following the lead taken by Hong Kong’s own Cheung Kong Group, the largest overseas owner of UK infrastructure.

    And there is the potential for a new and fruitful partnership that would bring benefits to the people of China, Hong Kong and Britain.

    Last September, at the UK-China Economic and Financial Dialogue, I agreed with Vice Premier Wang that “both sides welcomed the private sector interest in developing the offshore RMB market in London” and we agreed to “engaging in bilateral dialogue and dialogue with other authorities, as necessary, to support the market’s future development”.

    My visit furthers that dialogue with the Chinese authorities, together with Chinese and British banks, on establishing London as a new hub for the RMB market, as a complement to Hong Kong and other financial centres.

    The recent history of the growth of the RMB market is well known to all of you.

    It is clear that there is scope for substantial expansion of the RMB market in the coming years.

    In June last year, RMB had a world foreign exchange market share of 0.9 per cent.

    This compares to China’s share in world trade in 2010 at 11 per cent.

    London is perfectly placed to act as a gateway for Asian banking and investment in Europe, and a bridge to the US.

    This is not just an accident of time-zone, or our language, although both are important.

    It reflects London’s strength in product development, its regulatory structure and the depth, breadth and international reach of its financial markets. We are by some distance the world’s largest foreign exchange market; and the growing use of RMB in those global markets will bring substantial benefit to Chinese economic development and the wider world economy.

    It is a reflection of China’s increase in influence and share of global GDP, and is a step towards greater capital convertibility.

    I welcome the Donald Tsang’s comments on the importance of the joint private sector forum announced today, facilitated by the Treasury and the Hong Kong Monetary Authority, to promote closer cooperation between the London and Hong Kong on the development of global RMB business.

    I also welcome Hong Kong’s decision to extend the operating hours of its RMB settlement system, which London is the key beneficiary of.

    Our objective is simple: we want to expand the amount of business and trade we do with each other, so that the citizens of China, Hong Kong and Britain all benefit from the prosperity and jobs that will bring.

    And it leads me to my third and final point today.

    I believe we can be bold in forging a new alliance between Britain and our Asia partners to defeat the forces of protectionism and make global finance a force for good.

    I have been doing this job for just short of two years now.

    One of the things that have struck me in the thirteen IMF and G20 meetings I’ve attended is how often the British and Chinese agendas are very similar.

    You might not expect it, given our different history, cultures and traditions.

    But very often, around the table, China and the UK are some of the most forthright advocates of free global and open markets.

    China is the world’s second largest manufacturing exporter in the world, while the UK is the world’s second largest services exporter.

    I would like to set out what I think should be our shared agenda in 2012.

    First, we need to resist a return to protectionism.

    The December World Trade Organisation ministerial meeting highlighted that Doha is at a significant impasse.

    We need to look at new and innovative alternative approaches to taking forward trade liberalisation, consistent with WTO rules.

    That means continuing to push ahead with ambitious free trade agreements with key partners.

    Britain is pushing hard to complete EU free trade deals with India and Singapore this year, as well as maintaining momentum towards an ambitious agreement with Japan.

    Second, we need must ensure a reformed and more representative IMF has the tools and resources to do its job.

    The reforms agreed at the Seoul G20 summit in 2010, which the UK was one of the first countries to ratify, will ensure the IMF is more representative of its whole membership.

    The IMF does not belong to any one region of the world.

    Its role is to support countries which get into difficulty, not currencies.

    Its resources should be drawn from its members and available on an equal basis to all.

    But its members also have a responsibility to ensure the IMF has the resources it needs to promote the global economic stability from which we all benefit.

    The risks faced by the global economy have increased significantly over the past year.

    The capacity of the IMF may also need to rise to ensure those risks can be addressed, but this cannot be a substitute for action by the eurozone.

    Britain stands ready to play its part.

    Third, we must also ensure global capital markets are underpinned by global rules for financial regulation enforced by strong global institutions.

    As home to two of the world’s major financial centres, Hong Kong and Britain share an interest in a truly global approach to financial regulation that maximises the benefits, while reducing the risks, of open financial markets.

    It is because we favour a global approach that we oppose an EU-only FTT.

    At the heart of these new global rules are the Basel III prudential requirements for banks, which must now be rigorously implemented around the globe.

    We must also push ahead with the agreed G20 reforms of derivatives, remuneration and systemic financial institutions and I would like to take this opportunity to acknowledge what Michel Barnier – who will speak at this Forum after me – is doing to help advance issues in Europe.

    These new global rules – high standards, globally applied – must be overseen and enforced by a stronger Financial Stability Board as the global financial watchdog, building on the reforms made at the Cannes G20 summit.

    These are all long-lasting reforms that will make global finance a force for good rather than a source of instability, intermediating to put to work the savings of millions to create new jobs and new investments for millions more.

    And working with partners in Asia we can do just that.

    Ladies and Gentlemen, these are challenging times for the world.

    But there are also opportunities to build a more balanced, sustainable global economy if we take them.

    A strong Asia.

    A strong British-Asian relationship.

    And strong multi-lateral organizations that support open markets and global stability.

    In a challenging and difficult year, these are three reasons to be positive about our future.

    Together, let’s build a more prosperous economy for everyone.

    Thank you.

  • Nick Clegg – 2012 Speech at Mansion House

    nickclegg

    Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, at the Mansion House in London on 16 January 2012.

    Another week, another speech about the evils of capitalism. Let me start by asking: who here is in favour of irresponsible capitalism? Because you won’t find many people arguing for more recklessness, more short-termism or greater rewards at the top. On the contrary – the growing consensus is that we need the opposite: a more sustainable economy; a more balanced economy, where rewards are proportionate and relate to real success.

    That consensus, emerging among the political parties, has attracted a little cynicism.

    I can understand that. It is, after all, bonus season in our banks. But there is a more generous interpretation of the shifting political mood. One that says: perhaps the penny has finally dropped.

    As this debate moves forward, we need to be clear about what we mean. Because, whether you call it a new economy, an ethical economy, moral markets, responsible capitalism, there is a big difference between having strong views on bonus culture or excessive top pay and wanting real change in the practices and principles that guide corporate life. A bit of wrist slapping or moralising at the worst offenders will not be enough. This should not be a war of words but a real contest of ideas about how to reform our economy.

    So this morning I want to offer a liberal diagnosis of what’s wrong; and then a liberal remedy.

    First, diagnosis. Why is our capitalism in crisis? I will argue that this is, at root, a crisis of power.

    That we now have an economy driven by immensely powerful vested interests. Interests that politicians have abjectly failed to stand up to.

    The remedy, put most simply, is a redistribution of power. Last month I set out my vision for an Open Society and I talked about the need to disperse political power to create strong citizens. Today I want to talk about dispersing economic power to that same end.

    Before I say any more, I want to make one thing clear: Capitalism may be today’s political punchbag, but let’s take a long view: it’s one of history’s great success stories. No other human innovation has driven progress – and raised living standards – so consistently. Markets catalyse ideas, invention and experimentation. When they work well, they are meritocratic and liberating.
    And they generate the wealth to support the most vulnerable and needy in society.

    Liberals believe strongly in the virtues of the market. But only if it is a market for the many, not a market for the few. Our economy is in danger of becoming the latter, monopolised by a minority, serving narrow and sectional interests.

    I am not here to take a cheap shot at big business – this would hardly be the right crowd.

    Big British firms are the backbone of our economy: our employers, our wealth generators, leaders in our society. And I am grateful to many of our major firms, particularly, for the commitment they are showing to greater corporate and social responsibility.

    Just last week over 100 large companies signed up to the Coalition’s Business Compact, opening their doors to young people from all backgrounds in order to improve social mobility. I’m delighted to see some of them represented here today.

    And I know many people in this room will agree: our economy is now seriously out of whack. It simply cannot be right that, right now, because of the crash and the recession, millions of ordinary people are struggling to get by. Yet relatively little has changed for those at the top.

    It cannot be right that for most people, on average, wages are falling by around 3% a year, yet executive pay is rising – on average by 13%. Over the last 25 years, top chief exec pay has shot up by 1200%.

    That is a gross imbalance, with wealth and influence hoarded among the few. It’s socially destabilising. Morally, it cannot be justified. And it’s bad for the economy too.

    Our problem is what Jesse Norman has called crony capitalism. It’s easy to throw rhetorical rocks at directors, bankers and businesses. But, if we are honest, this is as much a failure of politicians and regulators, the authorities too often cowed by corporate power. Whether that is political parties of all stripes in hock to vested interests or regulators struggling to stop supermarkets from putting the squeeze on small suppliers, whether it’s politicians kow-towing to media barons, the problem is endemic.

    There’s nothing new about it. Kings have always bestowed privileges on their favourite merchants. Corporations will naturally seek a dominant market position. It’s one of the reasons liberals from John Bright to the present day have been such fierce advocates of free trade. The agricultural landlords of the 19th century and early 20th century were happy for working people to pay more for their food because of protective tariffs. What Lloyd George in 1906 memorably called ‘stomach taxes’. So long as their own profits were protected.

    This has always been capitalism’s greatest danger: a tendency for the rule makers and the money makers to get too close. And we saw the consequences of that closeness play out in the most dramatic fashion right here, in the City, just three years ago. It was a political failure; a regulatory failure; and a market failure too.

    Political failure, because Whitehall became so dependent on City revenues. That politicians would not see the problems that were brewing. Instead, they hoped the goose would keep laying golden eggs.

    Regulatory failure, because the Financial Services Authority failed spectacularly in its duties. Regulators are meant to guard vigilantly against industry excesses. But they turned soft – either captured by or intimidated by those they were supposed to keep in check. And, just like the politicians, just like the industry, the FSA ignored the alarm bells ringing. And market failure, as short-termism and recklessness eventually consumed our banks, taking the whole economy to the edge of a cliff.

    Politicians in the pockets of vested interests, regulators asleep at the wheel, an unrestrained economic elite. The primary symptoms of crony capitalism.

    For liberals – from Gladstone to Grimond – the role of the state has always been to break up unaccountable, opaque concentrations of power, to protect the national interest from those vested interests. That is why, as well as the moves the Coalition Government is making to bring greater transparency to government contracting and lobbying, we need real reform of party funding to reduce the influence of those interests in politics. We need tougher border controls between the political class and the corporate world, and we need a better distribution of power within our economy.

    That’s why, for example we want new rules to stop an executive serving in one company from sitting on the pay board at another, so that directors’ salaries are no longer, effectively, decided by their mates. And we see an extremely important role for the state in redistributing wealth through income tax. In fact, one of the Coalition’s most significant reforms is our changes to income tax. Making it more progressive – so that lower earners keep more of what they earn.

    But liberals also recognise that narrowing wage inequality is not solely a task for the state. We also need to put much more power in the hands of other stakeholders in the economy – shareholders and employees – when it comes to setting top pay. Trusting not the unfettered market, nor the interventionist state, but trusting people.

    That is the core of a more responsible capitalism: power in the hands of people. Strong economic citizens able to keep vested interests in check. So let me say a word on the Coalition’s approach to empowering two groups in particular: shareholders and employees.

    First, shareholders. Part of the challenge is getting more of them to behave like business owners rather than absentee landlords. If they are unhappy, we don’t want them just to sell up and move on, we want them to throw their weight around so that the company improves: but we need to make sure they have the right tools at their disposal and they know how to use them.

    The Coalition has said we will introduce binding shareholder votes to curb executive pay as part of a package of measures to moderate boardroom behaviour. Vince Cable will set out that package next week but I can tell you today that we are going to overhaul the way shareholders – and others – can access information.

    Often, the reason investors are passive is because they can’t see the reasons to act. Take annual and pay reports. Shareholders should be able to use them as a kind of report card so they can see how well their money is being spent. But, you’ve read them, many – not all, but many – are impenetrable texts: obscuring rather than illuminating. Hundreds and hundreds of pages of facts, figures, charts and graphs. Plenty of information but nowhere – nowhere – a simple, clear single figure showing who gets paid what; Or a simple summary of where the money goes – how much is spent on directors, how much on dividends, or re-invested into the business.

    That information is absolutely essential for any investor trying to calculate value for money. Some companies do much better on making it transparent and easy to understand, but not enough. And where companies bury it – that is deeply cynical.

    So the Coalition will force companies to open up their books, so that investors don’t need an accountancy degree to decipher them. We are looking at a range of ways of increasing transparency, but here are two very simple changes:

    One: shareholders will only need to look at one number, not a dozen, to see how generously top executives are being paid, and they will need a clear policy in place for departing CEOs so that, if they deviate from that policy, and if a hefty payment is made for failure, that decision is up in lights.

    Two: the way money is spent will need to be crystal clear. So if a company is spending too much on boardroom pay compared to the amount being reinvested in the business, they will have to explain why: show investors where their money is going. That’s how to unlock shareholder power.

    But it’s not just shareholder power that matters. Ultimately investors seek profits, just like executives expect high pay. Some enlightened shareholders might see the benefits of a well-rewarded workforce, but the people best placed to look after the interests of staff are staff. And that is what, so far, has been missing from this debate: ordinary people.

    In an open society, a liberal society, people don’t just hold more power in politics, but in the economy too. And, over time, empowering workers can have a hugely transformative effect over corporate culture. People want to work in companies which are dynamic, but they also value stability. They want firms that secure big profits, but not at any cost. They believe that effort and achievement should be rewarded above all else.

    Aren’t those precisely the values everyone is now clamouring for businesses to hold?

    There are, of course, a range of ways employees can be given a louder voice.

    More rights, for example: like the new right to request flexible working and more flexible parental leave – to name just two.

    But today I want to focus specifically on employee ownership, a touchstone of liberal economic thought for a century and a half.

    John Stuart Mill hoped that employee-owned firms could end what he called the ‘standing feud between capital and labour’, and liberals have been championing it ever since. Because we don’t believe our problem is too much capitalism: we think it’s that too few people have capital. We need more individuals to have a real stake in their firms.

    More of a John Lewis economy, if you like.

    And, what many people don’t realise about employee ownership is that it is a hugely underused tool in unlocking growth.

    I don’t value employee ownership because I believe it is somehow “nicer” – a more pleasant alternative to the rest of the corporate world. Those are lazy stereotypes. Firms that have engaged employees, who own a chunk of their company, are just as dynamic, just as savvy, as their competitors. In fact, they often perform better: lower absenteeism, less staff turnover, lower production costs. In general, higher productivity and higher wages. They weathered the economic downturn better than other companies.

    Is employee ownership a panacea? No. Does it guarantee a company will thrive? Of course not. But the evidence and success stories cannot be ignored, and we have to tap this well if we are serious about growth. The 80s was the decade of share ownership. I want this to be the decade of employee share ownership.

    Now that’s a big ambition, I know. And it won’t happen overnight. But it won’t happen at all without Government taking a lead, so I am kickstarting a drive in Government to get employee ownership into the bloodstream of the British economy.

    We’re already doing this in the public sector, though the work of the Mutuals Taskforce, under Julian le Grand, and work being led by Francis Maude. And, of course, the radical reform of the Royal Mail – on that, I’d like to pay special tribute to Ed Davey. Governments have been grappling with the future of the Royal Mail for decades. Under Ed’s stewardship it will finally be transformed into an organisation in which staff have a meaningful stake. And now I’ve asked Ed to turn his hand to employee ownership in the private sector too.

    Working with professional bodies and businesses, the Coalition is going to find out where the barriers are, so that we can knock them down. Do staff and business owners know enough about employee ownership? Are the accountants and lawyers who advise them taught enough about it? Is there red tape we can cut? Does the tax system treat these firms fairly? Do we need an off-the-peg model so that more ordinary people take this up?

    We’ll appoint an independent adviser – an expert in the field – to help us find the answers and solutions to these kinds of questions, which will be brought together at a Summit I will chair in the summer.

    Crucial to all of this, of course, will be encouraging take up. One option, to give you an idea, could be giving employees a new, universal “Right to Request” shares.

    Imagine: an automatic opportunity for every employee to seek to enter into a share scheme, enjoying the tax benefits that come with it, taking what for many people might seem out of their reach, and turning it into a routine decision. Clearly the details of that kind of policy need to be properly thought through. We need to establish which companies would and wouldn’t benefit – it might not be feasible for microbusiness, for example.

    But we need to start by thinking big: not asking ‘why?’, but asking ‘why not?’ Looking across the board – tax, regulation, simplicity, awareness – to help more of these companies flourish, in order to put more employees at the helm.

    And that brings me to the thought I want to end on today: economic power in more hands.

    As the debate on a more responsible capitalism moves forward, Liberals will remain set on that goal:

    An end to crony capitalism, where vested interests trump the national interest. A better balance of power, in the economy – and between politics and business. That is the route to a safer, more stable, more prosperous economic future. This is how we will spread wealth and share rewards.

    A more responsible capitalism. A more liberal capitalism.

    Thank you.

  • David Cameron – 2012 Speech with President Mahmoud Abbas

    davidcameronold

    Below is the text of the speech made by David Cameron, the Prime Minister, on 16 January 2012.

    Well, it’s a great pleasure to welcome President Abbas back to Number 10 Downing Street. Britain and the Palestinian Authority have very good and strong relations and last year we upgraded our diplomatic relations with the Palestinian Authority.

    Britain wants to see a two-state solution come about. We are passionate about this; we do everything we can to push and promote this agenda at every available opportunity. I spoke to the Israeli Prime Minister after the New Year and I am delighted to have the Palestinian President here today.

    We believe the peace talks that have begun in Jordan do provide an opportunity – an opportunity we hope that both sides will pursue. We think this is absolutely vital.

    Obviously, as a friend of Israel and a friend of the Palestinian Authority and the Palestinian people, we want to see a strong, democratic, peaceful Israel alongside a strong, democratic and peaceful Palestine. We believe that is achievable, but we can’t achieve it without the two parties coming together and talking and discussing. In the end, this two-state solution can only come about from the two parties talking to each other. We cannot want it more than you want it.

    So, we wish you well. We will do everything we can to help promote these discussions. We think that time, in some ways, is running out for the two‑state solution unless we can push forward now, because otherwise the facts on the ground will make it more and more difficult, which is why the settlement issue remains so important.

    But we wish you well; we hope the talks can continue and we hope that the two-state solution that we strongly support can be achieved and we say that as a friend of Israel but also a very strong friend of the Palestinian people, the Palestinian Authority, and indeed as major donors to the Palestinian Authority and the institutions that you are so successfully building up. But President Abbas, you are very welcome here again.”

    President Mahmoud Abbas (via interpreter):

    Thank you. Thank you very much. Thank you very much Prime Minister. We are indeed very happy to be here and I would like to thank you for the invitation. And I would like to thank you also on behalf of the populace, on your stance vis-a-vis Palestine, on your support for the solution which we also – the two-state solution.

    You have indeed played a very, very important role in building our Palestinian institutions and this we can witness through the assistance that you have been offering us.

    Of course, nothing can be achieved without negotiations. As you know, there are negotiations going on right now because of the initiative that King Abdullah II of Jordan has taken. We are optimistic about those negotiations and at the same time we hope that there will be something tangible as a result of these negotiations.

    Of course, time is of the essence; there must be speed, we must be fast in achieving those things because the settlements and the whole thing will go on – seeing the settlements going on, is going to help everything; it’s what stands in the face of everything at the same time. So, settlements have to stop. Settlements have to stop in order for us to be able to continue our negotiations; to come to some sort of solution and a solution which will encompass the vision of the Palestinian state to come in the future.

    I personally know very well that you have a very balanced relationship, be that towards Israel or the Palestinian Authority. This at the same time is of great importance because you could play a political role, so to speak, so that we can find the balance that we all want to seek. We always need your help, sir. As we need your help and I am indeed very happy to be here with you.

  • Francis Maude – 2012 Speech on the Big Society

    Francis Maude
    Francis Maude

    Below is the text of the speech made by Francis Maude, the then Minister for the Cabinet Office and Paymaster General, on 17 January 2012.

    Everyone is a localist now. But Localism is not just letting go of power, as if all you would have to do is open your hands and it will flow away. You have to push it away. With localism you really have to mean it.

    We need a culture change, that’s not just about how politicians and Ministers behave. We have done a great deal – we are giving more freedom to local government. There is less money but you get more freedom in what you do with it. But we’re always pushing power beyond local government and right down to communities. This doesn’t happen overnight, it’s a long term movement. We need to encourage and support people.

    We have one of the most centralised Western democracies in the world.

    I don’t need convincing that people care about what their neighbourhood looks like; the quality of their local services; and the future of their high streets. That’s why we have Neighbourhood Watches, local campaigns, residents’ associations.

    But Whitehall has stifled local enterprise over the years. And people are frustrated about not being able to make a difference in communities in which they live – especially in deprived areas.

    Our role in central government is to free and empower individuals, communities and councils to find local solutions to local problems, instead of trying to impose uniform solutions on different communities with no understanding of their unique issues.

    We have recruited the first of 5000 people to be trained as Community Organisers to tackle problems on the ground.

    They are being trained to learn the skills they need to identify local leaders and bring people together to act on what matters to them.

    And this summer 12 National Citizen Service pilots gave over 8000 16-year-olds across the country the opportunity to engage deliver social action projects which they were most passionate about.

    NCS empowers young people to take ownership and make a genuine difference within their local communities, whilst arming them with essential life skills.

    This year up to 30,000 young people will have the chance to get involved and by 2014 – 90,000 places will be available.

    We have also set up an £80million Community First fund to provide small grants to community groups and local social action projects.

  • Chloe Smith – 2012 Speech to ResPublica

    chloesmith

    Below is the text of the speech made by Chloe Smith, the Economic Secretary to the Treasury, to ResPublica on 17 January 2012.

    Good morning and thank you for inviting me to speak here today about Charities and Philanthropy.

    It’s a subject of deep interest to me in my role in the Treasury and one that is vital to realising the Government’s vision of a Big Society.

    And I’m pleased to be speaking about this issue here at ResPublica, as it is you that have led and shaped that debate in recent years.

    It’s your innovative insights on public service delivery, emphasising the virtue and the potential of an associative society, that have set the agenda for ambitious reform across public services.

    When we came to Government we knew that we were at a watershed for how we provide public goods and meet public need. Over the previous decade, under the previous Government, power was continuously hoarded to the centre, to Whitehall.

    It became all about central levers and targets.

    But over that decade, the very nature of society itself was changing, becoming less hierarchical in every sector.

    The internet has been the great leveller and across every sphere it gave individuals the tools to take action for themselves, to produce their own solutions, to share their ideas with a wider community.

    And across the board, businesses, pressure groups, social entrepreneurs, and charities seized the opportunity to grow with renewed vigour. And at the same time, or perhaps as a result of this change, there has been a profound shift in attitudes across society.

    Whilst there are still those who point to Government and say “You do it”, there is an ever growing tide of people who are saying “We’ll do it.”

    A wave of people who have the knowledge, tools, and support to take on responsibility not only for their own needs and their family, but the community that they live in.

    A wave of change that brings irresistible pressure to reform at the very heart of Whitehall.

    Big society

    At its heart, the Big Society is about putting more power in people’s hands – a massive transfer of power from Whitehall to local communities.

    Giving local councils and neighbourhoods more power to take decisions and shape their area.

    Encouraging and enabling people to play a more active part in society

    And opening up public services to enable charities, social enterprises, private companies and employee-owned co-operatives to compete to offer high quality services

    We have made some excellent progress towards realising these ambitions. Not least in supporting the charities that drive volunteering and social action across the UK.

    Steps taken to support charities

    We have already taken steps to reduce the administrative burdens which can be a great weight on charities and distract them from their primary purpose and their primary love.

    At Budget we committed to an online filing system for charities to claim Gift Aid, to be introduced during 2012/13. I know from feedback to the announcement that this will make a big difference across the sector.

    And we have already delivered a significant first step with the introduction in April of intelligent forms for charities to apply for and claim Gift Aid.

    These forms contain automatic checks so will considerably reduce the number of mistakes made, the need for manual checking and so speed up the claiming process.

    HMRC will also be working with the sector to develop a Gift Aid database for charities. We have also taken steps to develop new fundraising opportunities for charities.

    We opened a £100m Transition Fund to help charities, voluntary groups and social enterprises affected by reductions as part of the Government’s Spending Review.

    This was part of a £470 million support for the sector, demonstrating the Government’s commitment to building the resilience of voluntary sector organisations.

    We are developing new funding streams like the Big Society Bank, which will draw on money in dormant bank accounts to provide wholesale finance for charities and other groups.

    But we are also working with charities to develop ways and means to galvanise greater giving across society.

    Creating incentives for people to donate more to charities like those represented here so that they can continue and expand their programmes. It’s about identifying what Government can do to incentivise people in to giving more.

    Budget and Autumn Statement 2011

    We want to make it easier for people to give in a range of ways and at different life stages.

    Tax reliefs for charities and charitable giving are an important way to do that, and though they cost over £3bn a year, they are a vital source of support for charities.

    And over the last year we have taken important steps to improve the effectiveness of reliefs, and also expand opportunities for giving.

    We are reducing the rate of inheritance tax from 40% to 36% for those individuals who leave 10% or more of their estate to charity. This will reduce the cost of giving to charity through bequests. We consulted on the detail of this proposal last summer, and will put legislation into place through Finance Bill 2012.

    We have also made changes to encourage greater lifetime giving of pre-eminent works of art to the nation in return for a tax reduction.

    At the Autumn Statement we announced an increase in the annual limit for both tax reductions under the Gifts of Pre-eminent Object scheme and taxes offset under the existing Acceptance in Lieu Scheme, from £20m to £30m.

    And more than that, companies as well as individuals will be able to access the new scheme.

    We have also announced an increase in the Gift Aid benefit limit from £500 to £2,500 to enable charities to better recognise the generosity of their significant donors.

    We have not forgotten smaller charities or donations from those less well off. We are introducing a new Gift Aid Small Donations Scheme from April 2013.

    This will be a big help for those charities collecting so called ‘bucket donations’, allowing them to claim a Gift Aid style payment on small donations up to £10 without collecting Gift Aid declarations.

    Qualifying charities will be able to claim up to £1,250 in repayments on total donations capped at £5,000 per year.

    These measures add up to a significant pack to support charities and charitable giving. But at the same time, there is no cause for complacency.

    Payroll Giving

    Last year’s Government White Paper on Giving demonstrated our commitment to encouraging more people to donate.

    It included a commitment to raise support for Payroll Giving – a tax effective method for employees to make regular donations to charity.

    Payroll giving provides a sustainable and predictable income stream for charities, and I have asked my officials to work with Cabinet Office to seek out ways to improve take-up.

    We know that we have to do much more to raise awareness of the scheme, and ensure that awareness leads to action. Together with the charity sector and with employers we need to change behavioural attitudes to embed giving, in this case payroll giving, as the social norm.

    Conclusion

    At a time when we are having to cope with the worst fiscal deficit in our history, I hope you will agree that the Government has made an excellent start at supporting the charitable sector.

    That said I believe that we are merely at the outset of a period of huge innovation and change for the charitable and wider third sector.

    Not only in terms of finance and philanthropic support, but also for how charities and third sector will be increasingly intertwined with how we deliver public services for the future.

    It is vital that we continue to engage with policy makers, the charities, and service users to ensure that we get these reforms right, and meet public need and efficient and effective way.

    I look forward to our discussion and learning what more we can do working together in the years to come.

    Thank you.

  • David Cameron – 2012 Speech to Headteachers

    davidcameron

    Below is the text of the speech made by David Cameron, the Prime Minister, on 17 January 2012.

    Well welcome everyone. It’s great to have you here at Number 10 Downing Street. I’m always – bit terrified with Queen Elizabeth I looking down on me, prove that anything is possible in life. But a very warm welcome. We’ve got some extremely talented head teachers here, we’ve got my policy aide here. We’ve got Michael Barber who spent many years in this building working for a previous government and is helping us now, also working at Pearson. And obviously we’ve got the Secretary of State for Education on my right. Sir Michael Wilshaw who has kindly agreed to become Head of Ofsted and take on one of the toughest jobs there is in public life, but I think one of the most important and I’m really looking forward to working with you.

    The subject we’re going to look at today which I’m very passionate about is the issue of coasting schools. I think we’d all agree that the last government and this government taking very, very strong action to try to turn around schools that are failing. Also, I think this government is doing a lot to celebrate the excellence there is in the secondary state sector and the primary state sectors, really good schools that are powering ahead to show what can be done. But I think there’s a danger in all of this to miss what is in the middle in terms of some schools that are just above failing – they get left for too long – and also, I think this is a subject that doesn’t get addressed enough, schools that might be ranked as satisfactory or even actually might be ranked as good schools but that could actually do so much better.

    And I think one of the consequences of recent years where we’ve seen some extraordinary stories of turnarounds and new schools in relatively deprived areas and of course Michael for many years ran the Mossbourne Academy in Hackney which is a classic example – a brilliant example – of this. We’ve seen schools that were previously failing turned around with incredible results at GSCE and A-level. And that’s prompted me – but I’m sure many others as well – to ask the question: if you can do that in Hackney, if you can do that in inner city Manchester or inner city Birmingham, why aren’t we doing that everywhere across the country and actually striving for better results?

    Now it’s not just a question of the aspiration of head teachers, or the aspirations of teachers, it’s also about the aspirations of parents and I think our great allies in this agenda as well as – and we’ll hear about Ofsted inspections and what teachers and heads should do – I think our great allies in this should be well-informed parents who want their schools to do more and I think try to raise the rate of… the level of aspiration not just in schools but actually in the home and in society about schools is a very big part of this agenda. That’s enough from me.

    I’m going to ask Michael to set out what he’s talking about today and the proposal he’s making and then perhaps Michael will come in and we’ll open it up and please feel free to agree, disagree, challenge, promote, argue or indeed anything else. Mike, over to you.

  • David Cameron – 2012 Speech at Street League Reception

    davidcameron

    Below is the text of the speech made by David Cameron, the Prime Minister, at the Street League Reception on 17 January 2012.

    Good evening. Please come on through. Good evening and a very warm welcome to Number 10 Downing Street. It gives me real pleasure to welcome Street League here after such a successful year, but I am very, very nervous tonight because the last time we had a Street League party here at Number 10 Downing Street, I was standing next to Cesc Fabregas and I said, ‘I know what’s going to happen? It’s going to be the curse of Cameron. Five minutes after this party, you’re going to be off back to Spain.’ He said, ‘No, I’m not going to be off back to Spain.’ Five minutes after the party, he was. So, Robin – great to have Robin van Persie. I’ve told him he’s not allowed – I know it was a difficult day yesterday. Some pretty tidy football from Swansea, but I wasn’t going to mention that. But anyway, you’re not allowed to go anywhere after this, but thank you very much for what you’re going to do to help support Street League.

    That’s really what I want to say tonight, is just what a fantastic charitable organisation I think this is. I think it brings three really brilliant things together. The first is the idea of using the power of football and the power of sport to do real good in our country and to turn people’s lives around. I think it’s a brilliant idea and listening to some of the people who have been involved this year, some of the graduates – these are really inspiring stories about how Street League has come to town, it’s inspired people, it’s taken them on, it’s given them new hope. So, I think it’s a fantastic idea because it’s harnessing something that we are mad about in this country, football, and turning it to good use.

    The second thing I love about it is that it is also about social action, social enterprise. I’m really proud of the fact that Number 10 Downing Street, in spite of the fact that this can be quite a busy place, that around 40 people in Number 10 have taken part, partnering with Street League and put their time and their effort in to help young people. I said I wanted to help and everyone pointed out that I was completely rubbish at football, but I did a little bit of interview training, some mock interviews for people, and what was great about it was you would think that if you came to Number 10 Downing Street for a mock interview and your mock interviewer was the Prime Minister, it might just be a little bit intimidating, but actually it worked incredibly well. We had some great sessions and it was a huge privilege to take part.

    I think the third and the really key reason why this is such a great idea is what you really get from listening to the – there are, I think, 40 graduates here tonight, but there are 400 overall this year – is just hearing their stories about how this organisation gave them confidence and a chance to go on and do better things. I think that, in the end, is what it is all about: confidence and turning people’s lives around, and giving them a fresh start. It’s a brilliant idea and it’s a charity I’m very proud to be associated with. I want to thank all of the backers, and there are many of them here tonight. I want to thank all the staff who have been involved with Street League. I want to thank also the FA and everyone involved in football that has also partnered Street League. The FA have had a slightly better – and the football league, a slightly better record in terms of luck, because of course there was the first Street League international, which was when England played Spain in a friendly, and we won. It was probably because I wasn’t there, so I didn’t bring my normal curse. But thank you to everyone who has been involved.

    I think this is a fantastic organisation. I think it’s a great idea and it is turning young people’s lives around – 400 people this year, building on 370 last year. So, the question is: what are you going to do next year? How can you go on growing and expanding and building, and getting to more parts of our country? I am absolutely committed to doing what I can to help, as is everyone in Number 10 Downing Street and your other partner organisations. So, a very, very big thank you for what you do, and now I am going to hand over to the man of the match, who did, in spite, scored yesterday – Robin van Persie. Thank you very much.

  • Mark Hoban – 2012 Speech to the London Stock Exchange

    markhoban

    Below is the text of the speech made by Mark Hoban, the then Financial Secretary to the Treasury, at MiFID on 18 January 2012.

    Good morning and thank you for inviting me to speak at the here today. It’s a pleasure to speak to many leading figures from across the financial system, and from across Europe, and do so here at one of the world’s oldest stock exchanges.

    From the earliest coffee houses surrounding the Royal Exchange to its formation over two hundred years ago, and through to the global powerhouse that it is today, the London Stock Exchange has always been the beating heart of the city.

    The LSE has been critical to the growth of financial markets in the UK that have enabled UK companies to raise £445bn in funds since 2005.

    With financial and professional services firms that employ almost 2 million people across the UK, with more than two thirds employed outside of London.

    As home to 230 foreign banks, channelling more FDI to the UK than any other sector, but also facilitating a huge amount of foreign investment right across the EU.

    And as the Chancellor said on Monday we are committed to working with the Hong Kong Monetary Authority to promote the development of a strong RMB market here in London.

    Of course as well as growth, over the last 300 years the stock exchange has also borne witness to a fair few crises, most recently, the financial crisis of 2008.

    We still live under the shadow of those events just over four years ago, as what was once a crisis of private and banking debt has transformed into one of sovereign debt.

    As everyone here knows, the instability in the Eurozone continues to undermine confidence and growth across all our economies. Not just across Europe, but across the world.

    Resolving the Eurozone sovereign debt storm is the immediate crisis that we all have to deal with, and we are as eager as our Euro area counterparts to see a comprehensive resolution to the crisis.

    European regulatory reform – challenge

    But over the longer term, we have the equally substantial task of financial sector reform correcting the regulatory failures of the last decade, and ensuring that regulation keeps pace with evolving markets.

    In driving forward regulatory reform, we need to learn the lesson of yesterday, but also recognise that today’s markets could trigger tomorrow’s financial crisis.

    So in the UK, we are reforming the structure and approach of our regulation, looking ahead as well as behind.

    There are those who argue that regulatory reform is the enemy of growth – that we should postpone reform.

    But we reject that argument – ineffective regulation and supervision of banking led to a massive contraction in our economy.

    A stable and resilient financial system provides sustainable economic growth. But we must understand the impact that reform can have on growth – disproportionate regulation can restrict investment, lead to higher costs for investors and lower returns for business.

    Growth is aided by open and competitive markets and we must be aware of those who will use reform to fragment markets – reform must be consistent and non-discriminatory. Reform should not erect barriers either within or around Europe.

    To allow that to happen would be to diminish the opportunities available to businesses and investors of all types.

    That is why we are vigorously guarding against that retreat. A free and open Single Market has brought huge benefits to the whole of the EU and is the most powerful tool that we have to foster renewed growth as we recover from the financial crisis.

    European regulatory reform – principles

    We will support the Commission wholeheartedly in its duty to protect and promote the Single Market in financial services even as we embark on vast regulatory reform.

    Now more than ever, it is critical that Member States are able to have confidence and trust in EU institutions to see through regulatory reform in full and to stand up for the Single Market.

    That means ensuring full and consistent implementation of high minimum regulation standards across the EU, whilst allowing member states to impose higher requirements where needed to ensure financial stability.

    It means protecting the integrity of the single market, ensuring that regulation does not fragment the Single Market by currency, geography or firm.

    And it means applying one of Europe’s core principles – the free movement of capital – to countries outside Europe’s boundaries and as much as to those within it.

    London and Europe thrives because of our freedoms – erecting barriers around Europe impoverishes everyone by denying opportunities for European firms to grow using capital from outside Europe and restricts out opportunity to support growth in Africa and Asia.

    It was because of the value we attach to the Single Market, the maintaining and Open Europe and protecting taxpayers and consumers alike by backing tougher regulation and supervision that the Prime Ministers sought safeguards at last month’s European Council.

    That approach characterises our robust approach to regulation reform at home and abroad.

    In the same way, we cannot afford to impose a Financial Transaction Tax if it is not going to be applied globally.

    Without global consistency, those transactions covered by the tax would merely relocate to countries not applying the tax.

    As the Commission’s own impact assessment shows, a unilateral European tax could reduce EU GDP by as much as 3.4%, or €422bn.

    European regulatory reform – UK leadership

    Even as we embark on a period of unprecedented regulatory reform, we rightly have to have to protect European competitiveness globally, and promote the Single Market within.

    On the Capital Requirements Directive, we continue to press for full and consistent implementation of Basel III as a minimum not a maximum basis.

    High, common and consistently applied minimum standards for capital, liquidity and leverage are vital for stability, reducing fiscal risk and protecting a Single, un-fragmented market.

    On EMIR we have worked hard to ensure a clear recognition of the principle of non-discrimination in the Council and it’s why we are challenging the ECB’s location policy in the ECJ.

    We have also secured a commitment to close loopholes with respect to the clearing obligation, and to ensure fair and open access in future legislation.

    And it’s exactly the same commitment that we are taking on negotiations on MiFID.

    MiFID

    The MIFID Review offers a huge opportunity to promote competition and the Single Market in financial services.

    We have already seen the beneficial impact that MiFID has had in lowering costs and spurring growth in equities markets, and it is right that we seek to update the directive for the significant changes in the market since its original implementation.

    But any reform of MiFID has to be driven by evidence not political whim.

    It is vital that the Commission undertakes the necessary analysis and deliberation to understand the impact of reform, and considers any unintended consequences.

    For instance, whilst it is clear that greater transparency has had a positive effect in equity markets, it is not necessarily the case that that precisely the same measures are directly transferrable to other market classes.

    Both bond and derivative markets are considerably less liquid than equity markets, and extreme care is needed to ensure that transparency requirements are carefully designed to work for each asset class.

    For example, the component bonds that make up Markit’s iBoxx bond indices are some of the most actively traded bonds in Europe. But looking at over 9000 of these bonds, only 52% actually traded at least once in a six month sample period in 2010.

    It is because of this complexity that the Commission must undertake rigorous impact assessments to fully understand the costs and benefits of increased transparency.

    Likewise, the Commission must undertake the same analysis when it comes to updating MiFID to reflect changes in the commodities market.

    The Commission cannot succumb to knee jerk reactions which may only serve to increase costs for European citizens.

    It is vital to remember that the commodities derivatives market serves a critical economic function in allowing end users to mitigate commercial risk.

    That is why we are sceptical about blanket position limits across all markets – they have a role to play in defined circumstances.

    But more often than not active position management by exchanges and authorities will be much more effective in tackling market abuse and indeed provide a more rigorous approach.

    It is incorrect to think that blanket limits will enable governments to control prices as some would seem to suggest.

    Furthermore the Commission must resist pressure to use MiFID to raise barriers against third countries seeking to trade with the EU.

    Across EU dossiers there has been an increasing and worrying tendency to try to implement strict equivalence or reciprocity provisions through EU legislation. It’s an approach that could serve to effectively close EU financial markets to third country firms.

    For instance, it seems that no third country would meet the standards as set out under the current MiFID proposal.

    From the moment that MiFID is passed and until equivalence decisions are taken, it would close the EU market entirely to any new third country firm.

    And barriers would be placed in the way of outward investment flows too, for example restricting access to emerging markets.

    At a time when we have to do everything we can to attract ever more investment within but also beyond the EU’s borders, it’s an approach that merely undermines our growth ambitions.

    Emerging economies are already taking steps to meet global standards of regulation, but change will take time.

    We gain nothing by browbeating emerging economies and their most successful firms and sovereign wealth funds with additional and unnecessary burdens.

    These are all complex debates and underline just how important it is to get the evidence base right to ensure that reform is effective and doesn’t undermine free, competitive and open markets.

    In a post-crisis market where we have seen extensive consolidation across the board, we cannot afford to sit back and sacrifice competition and customer welfare.

    DG Competition in particular has a fierce reputation for objective and rigorous economic and competition analysis, and a record of upholding their Single Market obligations in the European Treaty.

    It is vital that DG Competition lives up to those duties in the weeks and months to come, without political interference.

    To protect and promote the Single Market as we implement a vast agenda of reform.

    Across the European financial services agenda, the Commission must not let political expediency trump economic evidence.

    Responsibility of the European Commission

    I fully understand nonetheless that the Commission faces a huge challenge to resist pressure to delay, obfuscate and pander to vested interests in the EU.

    We see the Commission as parties in our commitment to protect and promote the Single Market in financial services…to meet its responsibility to secure regulation in the interest of all 27 members of the EU.

    Regulatory reform that is ambitious, effective and based on rigorous economic analysis.

    Domestic regulation – supervision

    It’s exactly the same approach that we have taken in our domestic reforms.

    It’s no exaggeration to say that the UK has been leading the way on regulatory and banking reform, taking tough and far reaching decisions to remedy the failures that preceded the crisis.

    We are fundamentally reforming our system of financial supervision, remedying the failures of the Tripartite system.

    Putting the Bank of England back in charge of prudential regulation;

    Creating the Financial Policy Committee to monitor risks across the financial system, whilst also requiring the FPC to take economic growth considerations into account when pursuing financial stability;

    And we are creating a Financial Conduct Authority to oversee the conduct and operation of firms and markets, putting the consumer protection at the heart of the financial system.

    We have also introduced a permanent bank levy on wholesale funding that is higher in relative terms than any other major European jurisdiction, targeting short term funding in particular.

    And we have introduced the toughest and most transparent pay regime of any major financial centre in the world.

    Domestic regulation – ICB

    But even with such ambitious reforms, there is no room for complacency.

    We are also learning the lessons of the crisis to implement radical reform to the structure of the banking system itself on the basis of recommendations from the Independent Commission on Banking.

    Recommendations which seek to answer how to create successful but stable financial services sector.

    Recommendations that seek to preserve the innovation that fuels the sector’s success without putting the wider economy at risk.

    As the Chancellor set out last year, we will separate retail and investment banking through a ring fence, ensuring that services that are vital to families, businesses and the whole economy can continue without resort to taxpayer money.

    We will also ensure that banks have bigger cushions to absorb losses without recourse to the taxpayer.

    That means requiring ring fenced retail banks hold equity capital of at least 10%, more than required under the Basel III agreement, with minimum loss absorbing capacity for the bigger banks of at least 17%.

    Through these proposals on loss absorbency, and through our initiative on Recovery and Resolution Plans, we are tackling the perceived implicit taxpayer guarantee for UK banks.

    That perceived guarantee for banks not just in the UK, but across the UK, is one of the greatest distortions to the Single Market.

    We are tackling that distortion at home, and we will continue to work with the Commission to reconcile that distortion at the international level through the Crisis Management Framework.

    Conclusion

    It is the UK that has been at the vanguard of regulatory reform.

    Our domestic reforms strengthen regulation of the banking sector, promote competition and protect the interests of the taxpayer.

    Our willingness to act on capital and liquidity in delivering the international consensus has strengthened and protected our banking sector at a time of stress in European markets.

    It is the UK that has been leading the way to ensure that we implement tough, consistent and non-discriminatory reforms that safeguard the stability, openness and competitiveness of the European financial system.

    But on all these fronts, we need the support and the evidence base of the industry. We need to hear your voices not just here in London, not only in Brussels, but right across the EU.

    It’s no easy task in the current environment, but we remain committed to working tirelessly to protect the Single Market, and we will continue to press the European Commission to resist vested interests that would seek to undermine it.

    It is only by working with the likes of yourselves here today that we can embed reform that is credible, effective, and protects the open competition which has allowed financial services to support growth across all 27 members of the EU.

    I look forward to working with you in that task in the months and years to come

    Thank you.