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  • Theresa May – 2013 Speech on Police Integrity

    theresamay

    Below is the text of a speech made by the Home Secretary, Theresa May, in the House of Commons on 12th February 2013.

    With permission, Mr Speaker, I would like to make a statement about our work to ensure the highest standards of integrity in the police.

    We are fortunate, in Britain, to have the finest police officers in the world. They put themselves in harm’s way to protect the public. They are cutting crime even as we reduce police spending. And the vast majority of officers do their work with a strong sense of fairness and duty.

    But the good work of those thousands of officers is undermined when a minority behave inappropriately. In the last year, we have seen the Leveson Inquiry, which cleared the police of widespread corruption but called for greater transparency in policing, and the shocking report of the Hillsborough Independent Panel.

    We have seen the sacking of PC Simon Harwood and the investigation of several chief officers for misconduct. And yesterday, I told the House about the investigation now led by Chief Constable Mick Creedon into the work of undercover officers from the Metropolitan Police.

    Mr Speaker, I want everyone to understand that I do not believe there is endemic corruption in the police, and I know that the vast majority of police officers conduct themselves with the highest standards of integrity.

    This was confirmed by Her Majesty’s Inspectorate of Constabulary in their report last year. But that doesn’t mean we should ignore the fact that when it does occur, police corruption and misconduct undermines justice, lets down the decent majority of officers, and damages the public’s confidence in the police.

    We need the police to become much more transparent in their business. We need clearer rules for how officers should conduct themselves. We need to open up the top ranks so policing is less of a closed shop. We need to make sure officers who do wrong are investigated and punished. And we need to make sure that the organisations we ask to police the police are equipped to do the job.

    Now, many of our existing police reforms address these challenges. The new College of Policing will improve the quality of police leadership and drive up standards. Police and crime commissioners are making the police more accountable to their communities. Direct entry into the senior ranks will open up the police to talented outsiders. HMIC is more independent of the police and for the first time it’s led by a non-policing figure.

    These reforms will help but we also need to take further, specific measures to root out corruption and misconduct from the police.

    First

    First, and in line with the recommendations made by Lord Justice Leveson, national registers of chief officers’ pay and perks packages, gifts and hospitality, outside interests including second jobs, and their contact with the media will be published on-line.

    Second

    Second, the College will publish a new code of ethics, which will be distributed to officers of all ranks. In addition, the College of Policing will work with chief officers to create a single set of professional standards on which officers will be trained and tested throughout their careers.

    Third

    Third, to prevent officers who lose their jobs as a result of misconduct being recruited by other forces, we will introduce, for the first time, a national register of officers struck off from the police. The list will be managed and published by the College of Policing.

    Fourth

    Fourth, to introduce a sanction for officers who resign or retire to avoid dismissal, hearings will be taken to their conclusion notwithstanding the officer’s departure from the force. And where misconduct is proven, these officers will also be struck off by the College of Policing.

    Fifth

    Fifth, the College will establish a stronger and more consistent system of vetting for police officers, which chief constables and police and crime commissioners will have to consider when making decisions about recruitment and promotions. And every candidate for chief officer ranks will need to be successfully vetted before being accepted by the Police National Assessment Centre.

    Sixth

    Sixth, Lord Justice Leveson’s report made several recommendations in respect of policing, focused on providing greater transparency and openness and the Government accepts what has been recommended and the College of Policing, ACPO and others have agreed to take forward the relevant work which falls to them. I will place details of the Government’s response to each of the Leveson report’s recommendations on policing in the libraries of the House.

    Finally

    Finally, Mr Speaker, I want to make sure that the Independent Police Complaints Commission is equipped to do its important work. Over the years, its role has been evolving and the proposals I announce today develop it further. Public concern about the IPCC has been based on its powers and its resources, and I want to address both issues.

    Regarding its powers, last year Parliament legislated – with welcome cross-party support – to give the IPCC the ability to investigate historic cases in exceptional circumstances. In the same legislation we gave the IPCC the power to compel police officers and staff to attend interviews as witnesses.

    In addition, I have already said that we will legislate as soon as Parliamentary time allows, to give the IPCC the power to investigate private sector companies working for the police, along with other powers the IPCC has asked for to improve its effectiveness and increase public confidence. I am prepared to consider any further legislative changes that the Commission says it needs.

    But I believe the main difficulty for the IPCC is its capacity to investigate complaints itself. Last year, the Commission investigated just 130 of the 2,100 serious or sensitive cases that were referred to it independently, whilst supervising or managing another 200. Individual police forces investigated the remainder. But 31 per cent of appeals against forces’ handling of complaints were successful and that is simply not acceptable.

    I will therefore transfer to the IPCC responsibility for dealing with all serious and sensitive allegations. I also intend to transfer resources from individual forces’ professional standards departments and other relevant areas to the IPCC to make sure it has the budget and the manpower to do its work.

    Mr Speaker, the Government’s police reforms are working well. Crime is falling. Corruption and misconduct are thankfully the rare exception and not the norm in our police, but that does not mean we should not act. I believe this is a comprehensive plan to address public concern about the integrity of the police, and I commend this statement to the House.

  • Sir Nicholas Macpherson – 2013 Speech on the Origins of Treasury Control

    Below is the text of a speech made by the Permanent Secretary to the Treasury, Sir Nicholas Macpherson, on 16th January 2013 in London.

    Some 60 years ago, Sir Edward (later Lord) Bridges gave the Stamp Memorial lecture, in which he described the many ways in which the Treasury had changed since the end of the First World War.  He chose Treasury Control as the lecture’s title.

    Tonight, I plan to roam a little more widely and to consider the origins of Treasury control itself.  But, as a preface to my lecture, I cannot put it any better than Bridges himself:

    To those of you who may regard this as an arid prospect, I would say … that having spent nearly all my working life in this business, I find in it today more of interest, indeed at times of excitement, than I did as an apprentice thirty years ago.

    The rise of the Treasury

    The Treasury’s origins lie back in the mists of time.  It is younger than the Royal Mint but older than any other department.  The Treasury’s role in the Middle Ages almost certainly merits a separate lecture.  I do not propose to go into it tonight.

    Instead, I shall confine myself to the modern era: the period since the post of Lord High Treasurer first went into Commission, four hundred years ago last June.  Tonight, I want to examine how the Treasury became the dominant institution within Whitehall; to what it owes its power; and why it is more than just a common or garden Finance Ministry on the continental model.

    I would attribute the rise of the Treasury to three factors, which played themselves out in the two hundred year period from the Civil War to the rise of Gladstone:

    – war as a spur to financial innovation;

    – the Treasury’s inextricable links to Parliament;

    – and its ability always to be just ahead of the rest of Whitehall in terms of quality of administration.

    I will then touch on how Treasury control evolved in the 20th century, and finish with some contemporary observations.

    First, war.

    The Second Dutch war of 1667 perhaps did more to strengthen the Treasury than any other.  The war itself was a disaster, culminating in the Dutch raid on the Medway, during which some fifteen English ships were destroyed, with the flagship HMS Royal Charles being captured without a shot being fired and towed back to Holland as a trophy.  But above all it was a triumph of Dutch finance and administration.  This was a country whose population was a quarter of Great Britain’s, but which managed to deploy more money to finance the war.

    Charles II realised it was time to reform the Treasury.  Out went the Lord High Treasurer, the Earl of Southampton.  In came, a new Treasury Commission.  The King had been much influenced in exile by the administration by committee he had seen in Holland and France.

    Charles II faced down his Lord Chancellor, Lord Clarendon, in insisting that “he would choose such persons, whether Privy Counsellors or not, who might have nothing else to do, and were rough and ill natured men, not to be moved with civilities or importunities in the payment of money”.  Lord Ashley as Chancellor of the Exchequer had a good understanding of finance; Sir Thomas Clifford had been a Commissioner of the Navy and Sir John Duncombe one of the Ordnance Commissioners, while Sir George Downing – the Secretary – was a skilled financier, as well as a property developer.

    The new Commission was quick to assert its authority over the Privy Council and Secretaries of State.  Within a week of their appointment, they demanded to be informed of every petition which would involve a charge on the revenue, and the right to give their opinion on the petition itself and the state of the revenues as a whole.  The King agreed.  Eight months later, when one of the Secretaries of State had presented a warrant for hay for the deer in New Park without the Treasury’s knowledge, the Commissioners demanded yet more power.  As a result, all money warrants for the Navy, Household, Guards and Garrisons were now to be countersigned by the Treasury Lords, and Warrants for the regulation of the revenue were to be passed by the Treasury.  Moreover, as the Order in Council of January 1668 made clear, “no free gifts or pensions might be granted until the petitioner had set forth the value of the thing sued for, and the Treasury Commissioners have reported thereon”.

    The strengthening of the Treasury over the next forty years was reflected in the relative ease with which it funded the War of the Spanish Succession, the most expensive war Great Britain had fought to date and which more than doubled the national debt.  The rapid development of the City of London, combined with the setting up of the Bank of England with the First Lord’s support, ensured a much more favourable funding environment.  Indeed, Marlborough’s victories could be funded on the back of relatively benign interest rates.  Not all were happy: Swift’s History of the Last Four Years of the Queen contained forceful condemnation of Godolphin and the whole system of “Dutch finance” – that is “the pernicious counsels of borrowing money upon publick funds of interest”.  Unfortunately, the Treasury blew some of its hard won credibility by a cunning plan to convert floating government debt into stock in a chartered trading company – the South Sea Company.

    The Napoleonic Wars represented a further ratcheting up in the role of the state increasing the share of national income accounted for by public spending temporarily from 12 per cent to 23 per cent.

    But more importantly, the size of the national debt rose inexorably: from £2 million or about 5 per cent of GDP in 1688 to £834 million in 1815 (twice national income).  This put a high premium on the Treasury’s ability to finance wars, both through borrowing and innovations in taxation (Pitt introduced the income tax in 1799): the Treasury’s success on both these fronts was instrumental in Britain’s eventual victory.  Debt interest payments accounted for a half of public spending between 1820 and 1850.

    Secondly, the Treasury’s influence in the House of Commons was critical to its ascendancy.  The most potent symbol of this was the emergence of the First Lord of the Treasury as Prime Minister in the early 18th century.  To this day, if you knock on the door of No 10 Downing Street, it is not the title of Prime Minister which is on the name plate but First Lord of the Treasury.  Only the Marquess of Salisbury of modern Prime Ministers has declined to be First Lord.  But Salisbury always had a particular aversion to the Treasury: in 1900, he could say:

    “by exercising the power of the purse, [the Treasury] claims a voice in all decisions of administrative authority and policy.  I think that much delay and many doubtful resolutions have been the result of the peculiar position which, through many generations, the Treasury has occupied.”

    Alongside the First Lord, the Second Lord (the Chancellor of the Exchequer) became increasingly important as the 18th century progressed.  The Parliamentary Secretary or Patronage Secretary, as the Chief Whip is known to this day, was also of critical importance given the importance of sinecures to 17th and 18th century public life.  And the junior Lords of the Treasury were important cheerleaders for the Treasury’s agenda.  And so the influence of the Treasury in the House of Commons grew; to this day, the Government still sits on the Treasury Bench.  As Henry Roseveare put it:

    “with every extension of the financial basis of government, the Treasury’s access to the roots of power grew more secure.  At best, ambition to control the largest departmental empire – at worst, a desire to have some fingers in the till – ensured the attractiveness of the ‘place the money groweth’.  It was plausibly rumoured in 1690 that two members of the Treasury Commission had paid £200,000 ‘upon the nayle’ for their places”.

    But the Treasury’s role in Parliament was not confined to personnel.  Until the 17th century, Parliament’s role was to agree to taxes, often to finance war.  But the King had considerable freedom to spend the revenue pretty much how he wanted.  The Civil War, Restoration and Glorious Revolution changed all that.  Again, it was the ubiquitous Downing who was the author of a change in procedure, introducing the principle of “appropriation of supply”.  He persuaded Charles II to incorporate in the bill which sought to finance the Dutch war in 1665 a provision appropriating the £1¼ million exclusively for the pursuit of the war, and through the rest of Charles’ reign this became a device which increasingly curbed the royal prerogative.  Admittedly, it took time for the principle of appropriation to become embedded, largely because expenditure financed by the Civil List – which included the small domestic departments of Whitehall as well as the King’s personal expenses – remained outside the system of annual votes.  However, during the course of the 18th century Parliament steadily chipped away at the Civil List, with the result that more and more expenditure became subject to annual votes.  By the time William IV came to the throne in 1830, the Civil List only covered the expenses of the Royal Household.  More recently, the Sovereign Grant Act of 2011 completed the process by bringing financial support to the Royal Household into annual estimates for the first time.

    At the same time, Parliamentary control of the revenue side of the budget became increasingly regularised, which also strengthened the role of the Treasury.  House of Commons resolutions of 1706 and 1713 conceded the right of financial initiative to the representatives of the Crown – in short Treasury ministers.  And the setting up of the Consolidated Fund in 1787 – “a fund into which shall flow every stream of the revenue, and from which shall issue the supply for every public service” – made it impossible for revenue to be diverted to expenditure not covered by votes.

    Thirdly, the Treasury tended to be ahead of other public institutions in terms of the quality of its administration.  My point here is that for the Treasury to be in control it did not need to be at the cutting edge; it just had to be ahead of the Whitehall pack.  Under Downing’s Secretaryship, the Lord Commissioners improved the organisation of the Treasury: introducing basic principles of administration such as record keeping and “Treasury minutes”.  They also used exhortation to get better service from the Exchequer – which dealt with payments and accounts: thus, the Treasury minute book of 3 June 1667 records:

    “The officers of the Exchequer called in and told that their ordinary hours of attendance are not sufficient and… they are to take care that there be no further occasion of complaint of …a refusal to attend longer”.

    G M Trevelyan concludes in his England under Queen Anne that the best modern traditions of the permanent Civil Service emerged in the Treasury at this period.  However, progress was slow.  It was not until 1776 that  that much maligned Prime Minister Lord North introduced a series of reforms designed further to improve the performance of the Treasury : in particular, the principle that each Treasury official should “personally transact the business assigned to them”, thus ending the prevalence of pluralism or absenteeism; the introduction of training; and the principle of merit informing promotion – or as the relevant Treasury minute puts it “ability, attention, care and diligence of the respective clerks, and not their seniority”.  In effect, the age of sinecurism was over.

    Gladstonean reforms

    In many ways, the forces behind the inexorable rise of the Treasury came together under William Gladstone, who dominated the Treasury of the 19th century.  He was Chancellor, four times, and First Lord, four times, combining the two posts both in 1873-4 and 1880-2.  According to his biographer HCG Matthew:

    “Gladstone acted independently [as Chancellor].  He also acted aggressively.  His years at the Treasury coincided with reform of that institution from within, which Gladstone both shared and encouraged.  The Treasury was asserting its right to control the activities and personnel of the Civil Service as a whole.  Gladstone asserted the political position of the Chancellor in the Cabinet, in Parliament and hence in the country generally”.

    To this day, Gladstone’s influence still dominates the Treasury.  The current Chief Secretary – the first Liberal Treasury minister since Sir John Simon – has a picture of Gladstone on his wall.  And Gladstone’s image also dominates the Chancellor’s study at 11 Downing Street.  Gladstone’s economic principles of sound money and free trade have endured in the Treasury for 150 years.  And at a time of austerity Gladstone’s focus on candle-ends lives on.  The context of Gladstone’s original reference still has a certain resonance: when the Hon F A Stanley (later 16th Earl of Derby) was appointed Financial Secretary to the Treasury in 1877, Gladstone wrote to Sir Algernon West:

    “Stanley is clever but can an heir to the Earldom of Derby descend to the saving of candle-ends, which is very much the measure of a good secretary to the Treasury?”

    Writing in 1950 Sir Edward Bridges was a little defensive about Gladstone’s approach:

    “It recalls at once the wish believed by many to be still endemic in Treasury Chambers, to refuse all proposals of expenditure however worthy the object.”

    And preferred to interpret it “as a sign of the exceptionally prudent housekeeping appropriate to those who are handling other people’s money”.  To this extent, the fabric of the Treasury has always contrasted with other great institutions, such as the Foreign and Commonwealth Office and the Bank of England.  I think Gladstone would have been proud of the Treasury’s recent adoption of cheaper paper and the reduction in the size of desks, and a move to desksharing, the better to maximise rental income here at 1 Horseguards Road.

    It was Gladstone who commissioned the Northcote-Trevelyan report of 1854 which ushered in recruitment by open competition and promotion on merit.  Indeed, it was Gladstone who pressed Trevelyan to recommend open competition when his early drafts showed signs of compromising on this principle.  Not for the last time in Whitehall, there was considerable foot-dragging about implementation – between 1854 and 1868 only six departments made use of open competition in relation to 28 posts in all.  But Gladstone’s Chancellor, Robert Lowe gave it renewed impetus in the late 1860s.  According to Hennessy.  Lowe was “a tormented soul … [whose] deeply unappealing manner and striking albino appearance had not endeared him to his contemporaries”.  Nevertheless, he insisted that all Treasury posts were open to competition  and sought to impose the same principle on all other departments, though the Foreign Office and Home Office exempted themselves on the grounds that performance in those departments hinged on character and not intellect.  And other departments like the Department for Education failed to honour the agreement.  And so the Treasury tended to be the main beneficiary of a reformed university system.  This resulted in the Treasury attracting a more able – though not a more diverse – intake.  For all his support of meritocracy, Lowe had a curious obsession with the social composition of his elite, telling the Select Committee of Civil Service Expenditure in July 1873, that he valued:

    “The education of public schools and colleges and such things, which gives a sort of freemasonry among men which is not very easy to describe, but which everybody feels.  I think this is extremely desirable”

    And when challenged by his inquisitor that it might be

    “a great hardship upon [a naturally intelligent] man [that he] should find that because he has not the good fortune early in life to be at a public school, or to have learned Greek iambics he is to be debarred from the highest departments of the public service”

    Lowe replied:

    “He accepts the situation with a knowledge of what it is, and I see no hardship whatever in it…. And very likely with all his qualifications and merits he might be found wanting in the very things to which I attach very great value in the upper class; perhaps he might not pronounce his ‘h’s’ or commit some similar solecism, which might be a most serious damage to a department in case of negotiation. “

    It was Gladstone who provoked by the Lords’ rejection of a Paper Duties Bill in 1860 brought budget procedures into the modern era.  He determined that all tax proposals should be consolidated annually into a Finance Bill.  But more importantly, in terms of theatre, it was Gladstone who perfected the modern Budget speech, with its attendant rituals and traditions.  Central to a Gladstone budget speech was a focus on what the country could afford.  As he put it in 1860:

    “it would not be fair to speak of the great increase in the expenditure of the country without considering the great extension of the means by which that increase is supported …  We ought to have a clear knowledge of the proportion which our wealth bears to our expenditure, in order that we may be able to take a comprehensive view of our financial position”.

    And when his increasingly fragile Budget box was finally pensioned off in 2010, it is no coincidence that the National Archive – to whom the box belonged – chose to present the Chancellor with a new box modelled on Gladstone’s, albeit updated for the Elizabethan era.

    Gladstone’s reforms to Treasury control were themselves a response to the increase in expenditure arising from the Crimean War.  Of course, the Treasury did not control everything.  Sir Charles Trevelyan could still complain to a Select Committee in the mid-19th century that though the Treasury had managed to get the War Office and Admiralty to use cheaper stationery, the Foreign Office and Home Office continued to use paper of a very expensive quality.

    In 1861, Gladstone set up the House of Commons Select Committee on Public Accounts – a crucial ally to the Treasury in ensuring that public money is spent wisely and as Parliament intended.  And the Exchequer and Audit Departments Act of 1866 brought together the procedures of Estimates, Appropriation, Expenditure and Audit into one coherent system.  The inefficient and unwieldy Exchequer was finally swallowed up by a strengthened Audit Office under an independent Comptroller and Auditor General.  In 1872, the Treasury introduced the system whereby permanent heads of departments would be nominated as ‘Accounting Officers’: they would sign off the Appropriation Accounts submitted to the Comptroller & Auditor General in effect taking responsibility for the economy and efficiency of spending, as well as accounting accuracy.  And, although there were subsequent attempts to diminish the role of the Accounting Officer, for example by making the Principal Finance Officer rather than the Permanent Secretary responsible, the Treasury has always resisted any change to the core principles of the Accounting Officer regime.  As Warren Fisher, Permanent Secretary to the Treasury between the wars told the PAC in April 1921:

    “it should not be open to any permanent head … to say “please, sir, it wasn’t me” … Pin it on him in the last resort and you have got him as an ally for economy’.

    There have been subsequent revisions to this mid-19th century settlement.  For example, the Resource Accounts Act of 2000 replaced cash accounting with modern accounting practices and opened the way to Whole of Government Accounts.  More recently the Clear Line of Sight project has sought to create even better alignment between planning, control and accounting for public spending.

    We have also seen substantial changes to how public expenditure is planned.  First, through the Plowden reforms of the early 1960s, which sought to replace annual control of supply with volume planning of functional programmes on the basis of a multi-year public expenditure survey.  And more recently through the adoption of a top down approach to public expenditure planning in 1992, and the adoption of fixed multiyear spending totals under Gordon Brown, Alistair Darling and now George Osborne.

    But the basic Gladstonean principles of spending control and accountability remain in place.  The Treasury is accountable to the House of Commons for the stewardship of public spending.  But through its alliance with the Public Accounts Committee – formalised through the Concordat of 1932 and more recently through the modern bible for Accounting Officers, Managing Pubic Money – it effectively delegates responsibility for the efficiency and effectiveness of public spending to departments.  As Warren Fisher put it, rather than the Treasury acting as:

    “the single handed champion of solvency keeping ceaseless vigil on the buccaneering proclivities of Permanent Heads of departments”, “the Heads of Departments should work together as a team in the pursuit of economy in every branch and every detail of the public service”.

    To this day, the Treasury relies on the implicit threat of a Public Accounts Committee appearance and potential censure of an Accounting Officer if a department spends in excess of the estimates voted by Parliament.  And also on the National Audit Office’s powers to carry out value for money studies of particular areas of public spending, ranging from the award of national rail franchises to the sale of Northern Rock.

    Very occasionally the guild of permanent secretaries will grumble about the NAO and PAC, either for missing the point or trivialising complex issues.  But I would tend to attribute this to the discomfort of being held to account.  I am in no doubt that the PAC, under the chairmanship of Edward Leigh and Margaret Hodge, supported by Amyas Morse the C&AG, have made a real difference to the quality of public administration.  And I speak from experience, having appeared before the Committee some eleven times over the last two years.  I welcome and endorse the Committee’s determination to “follow the pound” from the Treasury through to the front line of public services, whether in a Jobcentre or an Academy school.

    The Treasury in the 20th century

    If Gladstone established the main principles of control, they have continued to evolve since his retirement in 1894.  Most importantly, the size of the state grew in the 20th century.  Indeed, there were incipient signs of this in his last administration when Harcourt reformed the estate duties.

    But – in succession – rearmament in the run up to the First World War; the creation of the welfare state under Lloyd George; the First World War itself; Neville Chamberlain’s further extension of the state into social security and housing in the 1920s and the great depression changed the role of the Treasury inexorably.

    Treasury control evolved in two ways.

    First, its finance ministry role became more strategic, particularly in the second half of the 20th century.  Not only did the Treasury  retreat from managing the civil service – the Fulton report on professionalising Whitehall led to sponsorship and leadership of the Civil Service moving first to the Civil Service department and then to the Cabinet Office.  But the Treasury also delegated the setting of pay to departments in the early 1990s, and has tended to increase delegations on more general spending.  For example, when I joined the Treasury in the 1980s I had to approve Forestry Commission spending on a hut in the Lake District costing just £15,000.  Today, the relevant delegation for Treasury approval is £100 million.

    The Treasury has pulled back from other areas too: from running the central catering organisation of the civil service; the telecommunications agency; and more recently from sponsoring the Office of Government Commerce an organisation dedicated to achieving better procurement.  We have been happy to transfer the latter to the Cabinet Office, whom under the Paymaster General, Francis Maude, is doing an excellent job in driving forward the efficiency agenda.

    And it is not as if these changes have made the Treasury less effective in controlling public spending.  Over the last fifteen years or so, the Treasury has been much more effective at delivering public spending outturns in line with plans than it was in the 1970s and 1980s.  It has been the planning of revenue – reflected in continued shortfalls in tax for a given level of national income – which has been the perennial problem of the public finances.

    But almost in parallel with its abdication of control of the civil service, the Treasury acquired a new role to supplement its finance ministry responsibilities: that of an economics ministry.  To some degree, this happened by stealth.  Bridges detected a change emerging during the 1920s where “the Treasury staff began to think of expenditure rather less in terms of the prospect of the spending of so much public money and rather more in terms of the employment of resources”.  It was the Second World War which really changed the Treasury.  First, through the enlisting of a staff of distinguished advisers including Keynes, Catto, Robertson and Henderson.  Secondly, through a new approach to macroeconomic policy and demand management: as Bridges put it “1941 marks the date when a new theme was introduced to the making of the Budget, namely the inflationary- deflationary scheme, a conscious attempt to use fiscal measures to hold the balance between the money in people’s pockets and what they could buy with it…It is now a well established and important feature of the general aims of Treasury control”.

    However, the Treasury’s dominance of economic policy making was largely fortuitous.  Until the 1950s, economic planning responsibilities resided in the Cabinet Office.  It was that department which had serviced Ramsey MacDonald’s Economic Advisory Council.  And during the war it was the Cabinet Office – through its Economic Section – which was responsible for planning and forecasting.

    It was only when Sir Stafford Cripps became Chancellor in 1947 that responsibility for coordinating functions on economic policy moved to the Treasury, the Economic Section moving over from the Cabinet Office some six years later.  This change, along with the nationalisation of the Bank of England in 1946, the adoption of a Keynesian approach to demand management and the creation of the Bretton Woods system meant that the Treasury was not only responsible for the macroeconomic policy framework but also for operationalising it.

    Of course, some areas of economic policy remained more contested: in particular, those relating to microeconomic policy and the supply side.  Harold Wilson took a dim view of the Treasury’s capacity arguing that “the only thing we need to nationalise in this country is the Treasury, but no one has ever succeeded” .  His creation of the Department of Economic Affairs with a remit to prioritize economic growth reflected the view that the Treasury was too laissez-faire and that its commitment to controlling public spending was somehow antithetical to the promotion of growth.

    As Sam Brittan said even before he took up a post as an “irregular” in the DEA:

    “the snag in most … plans for … an economics ministry is that there is something called finance quite apart from economics or production.  In fact the instruments by which production is influenced … are the budget, monetary policy, exchange rate policy and one or two very general controls”.

    But it was far from inevitable that the DEA would fail.  Other countries – in particular, Germany – have managed to create strong Economics Ministries alongside strong Finance Ministries.  But fail it did not least because the National Economic Plan could not withstand the pressure on sterling through the mid-1960s.  And it fell to the Treasury to pick up the pieces.  As Sir Douglas Wass said in the 1970s:

    “as the attempt of the DEA failed … so it fell on the Treasury to fill that gap and to concern itself with the supply potential of the economy”.

    And thereafter the Treasury has progressively built up its role on the supply side – not least because of the recognition that ultimately it is microeconomic policy which is most likely to promote growth.  As Nigel Lawson said in his Mais lecture of 1984:

    “The conventional post-War wisdom was that unemployment was a consequence of inadequate economic growth, and economic growth was to be secured by macro-economic policy … Inflation, by contrast, was increasingly seen as a matter to be dealt with by micro-economic policy … But the proper role of each is precisely the opposite of that assigned to it by the conventional post war wisdom”.

    Privatisation, labour market reform, and growth policy – whether through innovation, infrastructure, deregulation, and skills – have all become a focus of Treasury activity in recent decades.  This perhaps accelerated under Gordon Brown, with the Treasury setting up the Enterprise and Growth Unit in 1997, and bringing together work on personal tax, labour market and distributional issues.  Both groups live on to this day, as does the Treasury’s enhanced role on tax policy – transferred from the Inland Revenue and Customs and Excise in 2004.

    The abolition of exchange controls in 1979 began a process which would transform the City of London, and the Treasury has had to play a bigger role in relation to the financial sector.  The 1979 and 1987 Banking Acts put banking supervision on a statutory basis.  Responsibility for securities services and insurance moved from the DTI to the Treasury in the 1990s.

    The financial crisis itself has had a big impact on the structure of the Treasury – with significantly more officials working on financial service issues.  The banking interventions have had serious finance ministry implications, not least on the Treasury’s own finances – with its balance sheet ballooning and – for a time – dwarfing all other activities.  But more important still is the economics ministry role of shaping a financial service regime which better suits the needs of the economy.  Financial service legislation both here and in the EU has become a hardly perennial.

    The financial crisis also raised important questions about the Treasury itself.  Like the Bank of England and many others, the Treasury underestimated the build up of risk in the financial system.  And although the Treasury ultimately assumed a leadership role in resolving the British banking system in the autumn of 2008, it had a faltering start reflecting limited capacity in financial services following the run on Northern Rock in 2007.  It is important that we learn the lessons from that period.  We are currently implementing the recommendations of Sharon White’s review of the Treasury’s management response to the financial crisis.  And I am particularly pleased that Charles Roxburgh is joining us from McKinseys as Director General to lead our work on financial services.

    And it is in recognition of the Treasury’s enduring and intertwined role as an economics and finance ministry that I recently restructured the senior team with the creation of an additional second permanent secretary, with Tom Scholar and John Kingman respectively in charge of the Treasury’s finance and economics ministry functions, supported by the Chief Economic Adviser, Dave Ramsden, whose group of economists roam across both areas.

    As Alistair Darling put it in 2008, “macro and micro policy are not only indivisible – they reinforce each other”, and more recently George Osborne has said:

    “My experiences at the Treasury have made me even more convinced that Wilson was wrong to think that finance ministry objectives and economic growth are natural enemies.

    The Treasury must be more than just a finance ministry – it must be the driver of economic reform across the government…

    When I look back at the decisions I have taken, I ask myself.

    Would a finance ministry faced with a huge budget deficit have reduced corporation tax to boost growth?

    Would a finance ministry looking for Whitehall budgets to cut have protected science spending, even though it’s one of the easiest taps to turn off?

    I believe it would have been more, not less difficult to make these tradeoffs if there was an institutional split – and it’s right that the Chancellor of the Exchequer is accountable for getting that balance right.”

    However, for those of you who think that the Treasury’s power has become excessive, it is worth taking you back to the early 1960s.  Then it not only managed the whole Civil Service, but directly funded the overseas aid programme, higher education, museums and art galleries – these cultural institutions were deemed too important to be entrusted to ordinary Whitehall departments.  At the same time, the Treasury of those days was not only creating the macroeconomic framework, it was also operationalising it by setting interest rates when and how the Chancellor saw fit.  And it was presided over by five permanent secretaries and seven deputy secretaries.

    I would argue that the Treasury of today is much more strategic.  It tends to work through others.  For example, it sets the monetary policy target.  It delegates its operationalisation to the Bank of England.  It determines the regulatory framework, but delegates its operation to the FSA soon to be succeeded by the Prudential Regulatory Authority at the Bank.  It sets the public expenditure totals: it falls to the departments and the Cabinet Office through the Efficiency and Reform Group to drive forward the efficiency improvements necessary to maintain services at a time of falling public spending.  It determines that there should be two economic and fiscal forecasts a year.  But it leaves it to an independent Office of Budget Responsibility to provide them.  Growth policy is developed in partnership with the Department of Business and others, and operationalised through a number of departments and agencies.  Indeed, it has no choice if the Treasury is to remain a lean and agile department of around 1000 officials.  And to underline this, its senior management structure is half the size it was in the 1960s.

    Treasury control has evolved.

    But I believe it remains something which Downing and Gladstone – if they came back today – would recognise.

    As George Osborne said at a dinner to celebrate the foundation of the Treasury Board in 1612:

    “… The people assembled here today – serving under different administrations and different policitcal parties – have understood that the responsibility for the health of the public purse and the stability of the economic system is heavy one, fraught with difficulty and beset by competing claims and often requiring the answer no.”  But “The spirit of the Treasury created 400 years ago –born of a desire to bring order to the public finances, managed by persons of merit – survives to this day”.

    I could not put it any better than that.

  • Mark Simmonds – 2013 Speech at the Barclays Africa Forum

    Below is the text of the speech made by the Foreign Office Minister, Mark Simmonds, on 20th June 2013.

    I am delighted to have the opportunity to speak at the second Barclays Africa Forum.

    I would like to thank Barclays for hosting this event. As a bank that has been operating in Africa for over a century, you are better placed than most to provide insights into the many opportunities that the continent offers.

    It is particularly pleasing to see so many representatives of British business here with an interest in Africa. But it should not be a surprise, because we are discussing Africa at an important moment in its history. People have spoken for many years of Africa being at a crossroads, but I think that – finally – the talk is justified.

    I say that not just because of the news coming out of Africa – which I will return to shortly. I say it because last month I was in Addis Ababa for the celebrations that marked the 50th anniversary of the foundation of the Organisation of African Unity – a key milestone in the continent’s history – and because just this weekend five African Heads of State were here in London to take part in a conference ahead of this week’s G8 Summit.

    As the Prime Minister, David Cameron, said at the conference, we want to “forge together a new agenda that will drive growth for us all”.

    The active role played by the leaders from Ghana, Guinea, Senegal, Somalia and Tanzania was one of the many signs that Africa is taking its seat at the international top table. And just as we looked back at the last 50 years when I was in Addis, so we now have the opportunity to look to the next 50, as Africa takes the key decisions that will set its future path – how it manages its resources, how it approaches peacekeeping and security and how it enables its people to realise their ambitions.

    Today I want to focus my remarks on this future. To consider where Africa stands and where it’s heading. Why the UK is well placed to work with Africa on its journey. What the Government is doing to support the continent’s future. And how Government and business can work in partnership to build prosperity for Africa, and for Britain.

    “Africa is hot”

    At the end of April The Times ran an article that is synonymous with the new narrative of economic growth in Africa. Putting it simply, it said “Africa is hot.”

    Of course, Africa’s growth story is nothing new. But I think that is telling in itself: you are all here because you know what the narrative is. You know that countries in sub-Saharan Africa fared better than most during the financial crisis. You know that growth projections are impressive and that the opportunities across the continent reflect this.

    The facts speak for themselves. The economy of sub-Saharan Africa is already worth £1.3 trillion, and it is forecast to be 50 percent higher in 2017.

    Let me take equity funds as a more specific example. Equity funds that badge themselves African held assets of less than $1 billion in 2006. That had risen to nearly $5 billion by the end of last year. Compare the headline figure to, say, Latin America and it doesn’t seem overly impressive – $5 billion to Latin America’s $38 billion. But compare the rate of growth and you get the real story. Sub-Saharan African funds saw an increase of close to 400 percent in just six years. In Latin America growth was less than 40 percent.

    This growth is compounded by a significant demographic shift. Not only is the population of Africa growing, it’s also becoming increasingly prosperous. Standard Chartered estimated that in 2011 around 60 million Africans had an annual income of more than $3,000. They predicted that this would rise to 100 million by 2015. Again, consider the rate of increase: nearly 70 percent.

    It’s not surprising, then, that the World Bank says that Africa is on the verge of an economic take-off similar to that experienced by China 30 years ago.

    Yet there is still a perception problem. Even now, many companies are put off by what we call the “old agenda”. They worry that doing business with Africa is too risky. Corruption, war and famine are words I hear all too often.

    There is, of course, a reason for that. As the situation in Mali, Somalia and other conflict areas makes clear, the “old agenda” has not gone away completely. But one of the key messages I make to companies in the UK and overseas is that Africa is not homogenous. Corruption, war and famine are very real in some places, but look across the continent as a whole and they are now exceptions, not the rule.

    So we need to continue spreading the message of Africa’s growth story, which is why events like this are so welcome.

    The UK as a partner of choice

    It’s a story that the UK cannot – and should not – ignore.

    And that’s not just because it’s in the UK’s interest; it’s in Africa’s interest too, because the UK has a lot to offer to support Africa’s rise. We have expertise and skills in sectors from the financial services and the knowledge economy to oil and gas, green energy, agriculture and infrastructure. These are all areas in which British firms can add value that would benefit Africa in the long term.

    But we need to look beyond even our expertise and skills and make the most of all the unique levers that give us competitive advantage in the African market. And by that I mean things like our close links of history, and personal ties built up over generations. Or the vital importance of English as the language of international relations and international business – a skill that many African countries want to develop further, and one they look to us to help them with.

    We must do all we can to harness this comparative advantage, because – as the Prime Minister has said – we are in a global race. Indeed, much of the foreign investment surging into Africa is coming not from the developed world but from other emerging economies, China in particular.

    We need to ensure that Britain doesn’t lose out.

    The Government’s response

    That is exactly what the Government is seeking to do. We are working across Whitehall to support Africa’s rise, and to unlock as many business opportunities as we can in the process. But to do this successfully we need increasingly to work in partnership with business.

    Part of this is about improving the UK’s diplomatic presence on the ground. Since coming into office we have opened or re-opened Embassies in Somalia, South Sudan, Cote d’Ivoire, Madagascar and Liberia, as well as opening the doors of a new UK Trade and Investment office in Mozambique.

    And we are backing this up with more effective – and more targeted – high-level engagement.

    Ministers from across Government are visiting Africa frequently – myself included – and we are supporting a growing number of trade missions, such as those led by the Lord Mayor of London to Nigeria, Angola and Ghana in April and May.

    We have created a sub-Saharan Africa Task Force of key companies and stakeholders, which, under Lord Green’s chairmanship, is seeking to better respond to the needs of businesses like yours. This complements the work UKTI is doing to establish British Chambers of Commerce in South Africa and Nigeria – something we hope to emulate elsewhere.

    Ministers are driving forward UKTI’s High Value Opportunities programme, which has identified five large projects in Africa where the UK can win significant business. I am personally leading our work on one of these, focused on oil and gas in Eastern Africa.

    And in November the Prime Minister appointed Baroness Scotland as his Trade Envoy to South Africa. Incidentally, Lord Marland, the Chairman of our network of British Business Ambassadors, was in Gabon on Saturday, meeting government and business contacts. He will be travelling to Africa again in the autumn with a senior trade mission.

    We are also changing the way we work.

    Within the Foreign Office, we have, for example, established a network of around 50 staff across our Africa Posts who work on prosperity issues – which is supported by a seven-strong team of ‘prosperity champions’ in London.

    We have trained our diplomats in commercial diplomacy and used programme funding to undertake projects across Africa to support British companies and improve the business environment on the ground.

    And we have improved our engagement with the private sector by setting up new British Business Groups in places like Sierra Leone and Botswana, and strengthening our links with key organisations such as TheCityUK and the Business Council for Africa.

    We’re already starting to see results. Take West Africa, for example, where as part of this exercise we linked four Posts without a UKTI presence to an FCO/UKTI ‘hub’ in Ghana. During its first six months in operation the four Posts concerned gave support to 113 British companies, and we saw exports over the same period increase by 60 percent.

    A new approach

    However, I think we can do even better.

    I want us to be more ambitious, which is why I am driving a cross-Whitehall initiative to harness the Government’s resources and network to deliver a step-change in our trade agenda in key African markets.

    The initiative will see us working in partnership with the private sector to undertake a range of activities – from conducting research and capacity-building projects to arranging scoping visits – focussed on agriculture, extractives (particularly the supply chain), climate change and energy, infrastructure and financial and professional services.

    We identified these sectors as particularly attractive to British companies, and we will as a first step pilot work programmes in Angola, Cote d’Ivoire, Ghana, Mozambique and Tanzania. It is about a partnership so we are looking to see how we can support African governments too, as they seek to improve their business prospects and grow their economies.

    The countries we have identified are those where we judge that a concerted effort by the Government could make a real difference. I hope to visit all five countries in the coming weeks to speak to their governments about how we can make this work.

    Some of you may have already heard about this work, and those that haven’t will I hope do so soon. But I wanted today to highlight three key points about our approach.

    First, the countries we are focused on are indicative of a broader Government strategy – namely that we are strengthening our links to countries with whom we share a traditional connection as well as those with whom we do not. I have travelled extensively around Francophone Africa during my first year as a Foreign Office Minister, for example, and earlier this year I took part in an excellent event in London, organised by UKTI, on partnering with Portuguese companies as a platform to Lusophone Africa. We should do more work like this.

    Second, we want the initiative to support both British businesses and the development of Africa’s private sector.

    This is as much about Africa’s prosperity as it is Britain’s, and it ties in well with the work the Secretary of State for International Development, Justine Greening, is driving forward. As she said in a speech at the London Stock Exchange in March, we need to work “hand in hand” with business to drive economic growth in developing economies, alongside our core development work on basic services.

    DFID are doing much more with business to support both domestic and international investment in African economies, and they are also working to support Africa’s aspirations to deliver a continental free trade area by 2017. A huge amount of work is underway to support the development of infrastructure, open up border crossings and develop local businesses along corridors. At the same time, we are working across Government to help Africa tackle barriers to business such as corruption – not least through our G8 agenda of Tax, Transparency and Trade, the ‘3Ts’.

    And third, we want – as I have said many times before – to work in partnership with business, both here in the UK and in Africa.

    Take as an example the development of small and medium-sized enterprises in Africa, something I am particularly keen that we support. British financial institutions have a clear role to play in supporting SME development as a driver of growth in African countries – and so I very much welcome the initiative Barclays launched last year which aims to do exactly that.

    We want to hear from British businesses

    Taken together, the actions I have outlined today are helping to ensure that the UK responds to – and supports – Africa’s rise and, by extension, that we remain globally competitive in a world of shifting economic power.

    But as I have also made clear, prosperity is driven not by government, but by the private sector. By entrepreneurs and innovators, by companies like yours.

    So we want to work with you, to hear your views, to support your efforts to do business and to help you help Africa on its path to prosperity and peace. Let me know what more we can do.

    I wish you well in your event today and look forward to hearing the outcomes from your discussions.

  • Grant Shapps – 2013 Speech on the Labour Party

    Below is the text of the speech made by Grant Shapps on 31st July 2013.

    I know the summer is not a traditional time for political speeches…

    …so apologies for rousing you from your deck chairs…

    …but there is a certain urgency to what I want to say and less than two years left to get this message across.

    Since the beginning of this parliament, we’ve been working relentlessly to sort out the mess…

    We’ve cut a third off the deficit…

    … created 1.3million jobs in the private sector…

    … and cut tax for 25million working people.

    We’re supporting a nation that wants to get on.

    Making tough decisions now…

    …so that we can help not just this generation…

    …but the next.

    That’s the story so far.

    But what if the next five years told a very different tale?

    I’d like you to imagine for a moment that it’s the day after polling day…

    … the 8th May 2015.

    The sun is rising over the Thames…

    … the longest night of the political calendar is over…

    … and a new government is formed.

    History in the making.

    As the city starts another day, a car travels up Whitehall.

    In it are Ed Miliband…

    …and Ed Balls.

    Len McCluskey’s there too, of course…

    … After all, he paid for that car…

    … chose the passengers…

    … and put fuel in the tank…

    …In every sense, the back seat driver.

    Now, as the car slowly approaches the gates of Downing Street.

    The Skycopter hovers above…

    … capturing live the unthinkable nightmare that so many have dreaded.

    Yes – that’s right.

    After years of fighting off their radical left-wing policies…

    …And despite a gruelling, hard-fought campaign stretching back a generation…

    …It’s finally over for the Blairites

    Because they know, as we do…

    …how the bungling premiership of Miliband, driven by Balls, would inevitably pan out.

    And so I invite you to imagine…

    …if indeed your power of creativity can stretch this far…

    …that it’s the two Eds’ first day on the job.

    One man and his tempestuous Chancellor.

    A new day has dawned, has it not?

    You can picture the scene for yourself…

    Weak Ed Miliband cuts short his first bilateral to hurriedly address the irate calls of his Chancellor…

    …that it was a skinny latte, not a cappuccino that he ordered.

    And imagine Miliband sigh as the Downing Street switch connects the soon-to-be Lord McCluskey of Anfield…

    …with his third set of policy demands for the day…

    Because after all those rigged MP selections…

    …And the tens-of-millions of pounds in union funding…

    …Today – is payday for Unite…

    …And it’s gonna come with 1,000% interest.

    Because now, it’s starting to sink in for Ed…

    … he’ll be lucky if he gets to choose his own sandwich at lunchtime…

    …let alone his Cabinet.

    Meanwhile – there’s Ed Balls…

    Yes, think for a moment of Ed Balls.

    There he is next door…

    …unpacking his portrait of Gordon to hang on the wall…

    …and already thinking about measuring up for the Number 10 curtains…

    …As the country braces itself to relive the torrid nightmare of a Chancellor…

    …who is once again demanding to know…

    …when it will be his turn.

    On that first day they waste no time in enacting their manifesto.

    And it’s a package that comes with a sense of inevitability…

    Since Labour have already committed to billions more in unfunded spending this year alone…

    … in government, the deficit quickly begins to grow…

    …foreign investors soon take fright…

    …and mortgage rates – for millions of ordinary people – start to rise.

    In opposition, Labour opposed all the changes to tighten border controls.

    They’ve even proposed going further – planning a higher target for immigration.

    So back in government, immigration goes up…

    …bringing new pressure to our public services…

    … and fresh strains on health, housing and education.

    In Opposition Labour have opposed…

    …every single measure introduced to fix the welfare state.

    So in addition to reversing our own measures…

    …Messrs Miliband and Balls follow through on Labour’s pledge…

    …to make benefits a human right.

    Now, I’m not making this up –

    … Labour has actually been working on this policy…

    Which, taken to its logical conclusion…

    …could allow prisoners – serving a life sentence at Her Majesty’s Pleasure…

    …To be entitled to housing benefit.

    As they…and thousands more…

    …exploit the Human Rights Act…

    …to secure their newfound human rights to claim welfare, regardless of personal circumstances…

    … The implications for public finance are immense.

    Gone the fairness brought to the welfare system…

    … gone the incentive to get back into employment…

    … and gone the assurance that work will always pay

    Forget the cost to the state…

    …or to hardworking taxpayers…

    …because with the Welfare Party…

    …benefits always come first.

    But they’re not done yet…

    Next up, they implement their pledge…

    …to get rid of medical professionals examining care standards in our hospitals.

    As if to learn nothing from the NHS tragedies of Morecambe Bay…

    …or the appalling conditions at Mid Staffs…

    …Labour once again hand the most crucial role in patient safety…

    …back to those with no qualifications whatsoever in healthcare.

    So – they’ve returned uncertainty to the Health Service…

    They’ve brought the benefits system to its knees…

    … they’ve spent more…

    …borrowed more…

    …and created more debt.

    And after a while, these decisions –

    …real choices that Labour have committed to or worked up during this parliament…

    …come back to bite them…

    …and the rest of us.

    Imagine the concern of hardworking people…

    …as their council tax bill doubles – just as it did under the last Labour government …

    … leaving those on fixed incomes – like the elderly – financially vulnerable.

    And imagine the angst of parents as they start to attack – and close down – popular Free Schools…

    even though people in their own party – like Lord Adonis – have praised them as some of the country’s best.

    Meanwhile, as the deficit creeps back up to double digits…

    … the Paris based Organisation of Economic Co-operation and Development issue a bleak warning on the state of Britain’s economy…

    …With the economic news worsening, in scenes reminiscent of some of our Eurozone neighbours…

    … the International Monetary Fund meets in Washington to draft its UK bailout demands.

    A nation is pushed to the brink once more…

    … Britain firmly back in the danger zone.

    Yet inside Downing Street the mood is only worsened…

    …by the endless television rounds of Lord Mandelson…

    …keen to offer his view.

    As they say in the Labour party –

    Things Can Only Get Better…

    …if only because they’d struggle to get any worse.

    Right, I think that’s enough dystopian torture for one day…

    So let’s get back to reality.

    While we’ve been working to get Britain back on track…

    Labour are on the wrong side of every major argument.

    They said that, under this government, crime would soar…

    … It hasn’t.

    … Crime has fallen by 10%.

    They said there’d be a double – or was that triple – dip recession…

    … There wasn’t.

    We now know the only actual recession took place under Labour –

    … and at 7.2% it was the biggest in this nation’s history.

    They said the private sector wouldn’t create jobs –

    … meaning a million more unemployed by today…

    … But they were wrong…

    … private sector employment is at an all-time high.

    The sad fact is, Labour loves doing Britain down.

    In every case it’s almost as if they’ve been willing the country to fail…

    You could almost sense palpable disappointment for Ed Balls just last week…

    … as, through gritted teeth, he acknowledged stronger than expected growth.

    It’s the single biggest difference between our outlooks.

    We can see a vision of this country beyond the boom and bust of Brown.

    A future where we continue to generate employment…

    …adding to those 1.3million jobs created in the private sector.

    A future where we drive up apprenticeships…

    …adding to the record number created since 2010.

    … And a future where we help businesses trade around the globe…

    …continuing record rises in exports to China, India and Brazil.

    We recognise that times have changed.

    And as a nation we can harness the opportunities this brings to our citizens.

    Take the humble phone in your pocket for example…

    Just a few years ago it was good for making an emergency phone call.

    Or perhaps sending a text…

    But today here in Britain, there are more mobile phones than there are people…

    These sophisticated online devices are changing everything about our lives.

    The built-in cameras capture events…

    … as three-quarters of Britain’s 34m facebook users access their news-feeds through their mobiles…

    They enable us to share projects and thoughts through social media, no matter where we are.

    Now, we can just as easily access TV and Radio from across the globe…

    … as we can discover what’s happening in our own back yard.

    Just this month, new payment technology means that if you leave cash and your credit cards at home…

    …you can still pay by simply touching your phone on a contactless reader in quarter-of-a-million UK shops.

    You can bring colleagues together for meetings using Skype or Facetime – from London to Bejing.

    …Who here shares my appreciation of the phone’s flash – which doubles as a torch – when you’ve come home late and dropped your keys?

    … and this morning maybe you blamed your phone – rather than your alarm clock –

    …when you overslept and missed the Deputy Prime Minister’s press conference!

    Today it’s a reality that we carry the world around with us.

    Of course this raises all sorts of complex questions for society and public administration.

    But as a government, we must be at the epicentre of the opportunities this brings.

    That means removing the digital-divide for all our citizens…

    …with the most ambitious rollout of fibre-optic broadband in Europe.

    And the faster deployment of 4G, which just this week saw 15 UK cities upgraded to a staggering 60megabits per second…

    …that’s a high-definition film downloaded in just 3 minutes.

    It means helping young people fresh out of education to set up their own e-businesses…

    … backing world-beating innovation from aerospace to computing…

    …and hi-tech engineering to pharmaceuticals.

    Yet in this changed environment,

    Labour leaders remain inextricably bound up with the past.

    Their addiction to wholesale union funding means they maintain an old fashioned, skewed relationship with trade union barons…

    … demanding policies…

    … fixing candidates

    and installing their leader.

    It’s a dinosaur world, that time forgot…

    …which would lead to them governing in response to the demands of a few.

    Instead, we’re governing for the many…

    … unencumbered by narrow interest and restrictive practice.

    …We look to the advances and opportunities from technology…

    … to unleash new jobs in brand new industries.

    It’s part of our overall package to rebalance our economy and get Britain moving.

    But it’s something which the same old Labour party…

    … wedded to their old ways and beholden to their union paymasters – will never match.

    Now, the last few years have been a struggle for people in this country.

    But they’ve led the way in sacrifice to get this economy back on track.

    Of course, down the line they’ll hear the false promises of Labour’s soft options and easy credit.

    But this country has been there before…

    … and it doesn’t stand up to scrutiny.

    So today, I’m here to remind all of us –

    …that if we give up on our recovery now…

    …we’d be handing the keys right back to the people who crashed the economy in the first place.

    Same Old Labour…

    …forcing Brits to live the pain again.

    So on that morning of the 8th May 2015…

    …I want to make one thing certain.

    Ed Miliband and Ed Balls must drive past those gates of Downing Street – without turning in.

    They’re off to the commiseration party at Labour HQ.

    t’s a vision we need to make a reality.

    Because if we don’t see this through…

    We’ll be condemning our citizens to relive the austerity gains of the past few years.

    And if we do that – we’ll be letting Britain down.

    I’ve absolutely no intention of doing so…

    …and nor does this Prime Minister.

    hat’s why, during this summer, Cabinet colleagues will be outlining what we’ll be doing next.

    You’ll be hearing from our excellent Home Secretary Theresa May…

    … the redoubtable Work and Pensions Secretary Iain Duncan Smith…

    … and ministers from across the government.

    Because we’ve got to continue the bold steps to recovery…

    …so that we can go to the British people in two years’ time…

    …and ask for their permission to finish the job.

    And we won’t throw away a single minute…

    …not even a single second in getting our country back on track.

    So when parliament returns this September…

    It will be clearer than ever that we have the right programme to take this country forward.

    We’re determined to do what’s right for our nation in the long term, rather than what’s popular in the short.

    We’re advancing to a brighter and better future.

    Because we’re on the side of hardworking people the length and breadth of this country…

    …And we must not let them down.

    …because they are relying on us to succeed.

    Thank you.

  • John Swinney – 2013 Speech to SNP Party Spring Conference

    Below is the text of the speech made by John Swinney, the then Scottish Finance Minister, to the SNP Spring Conference on 24th March 2013.

    Conference, this has been a momentous week.

    Almost 80 years after our party was formed; 14 years after the Scottish Parliament was created; six years after this party entered government – our aim of self-government took another massive step forward.

    Let me start with a truth that we have all patiently put forward for decades, a truth that will play a fundamental part in the decision made by the people of Scotland on September 18th 2014:

    “By international standards Scotland is a wealthy and productive country. There is no doubt that Scotland has the potential to be a successful independent nation.”

    That is a quote from a group of dispassionate and impartial economic experts who form the Fiscal Commission established by the First Minister. These independent onlookers have conducted one of the most thorough analysis of Scotland’s economy that has ever been undertaken. We know that quote to be true.  Our job is to make sure our people share the confidence we have in Scotland.

    Scotland has strong foundations, perhaps some of the strongest from which any country has sought its independence.  Our opponents will try to undermine the self-confidence of our people. We must never let that happen.

    This Spring Conference is not only timely because of the announcement of the referendum date on Thursday.  It is timely because Wednesday’s budget confirmed the choice between two futures that the people of Scotland will face.

    The choice is between a UK system that, in the Budget short-changed Scotland, with a last minute cut to the finances Parliament has already allocated, locking us further into a no-growth austerity agenda; or, the prospect of taking into our own hands the vital decisions to stimulate our economy.

    In these last days of the union, we have seen the gulf that exists between our ambition for Scotland and the poverty of Westminster’s policies.

    We want to transform the life chances of our people. The No campaign want to keep our people in their place.

    In all the debate about Scotland’s financial future, one point is very clear: the real risk to Scotland comes from staying part of the United Kingdom.  By any measure, the Chancellor’s plan isn’t working.

    The Chancellor tells us he can’t borrow to invest. Yet he is going to borrow £244 billion more than he planned to borrow just to deal with economic failure.

    Sustainable public finances require a growing economy. That is not on offer from the UK – not now, not any time soon.

    The UK growth forecast for 2013 started off at 2.9%. Now it is only 0.6%.

    This is a damning judgement of the UK Government’s record on the economy.

    Conference, the Chancellor needed to deliver a Budget to kick start the economy.

    Instead, the Chancellor and the Scotland Office spent Wednesday afternoon claiming that they had given Scotland extra money, only for the cheque to bounce within a matter of hours. They’ve cut our budget by £100m, and replaced it with loans that we have to pay back.

    In eight days’ time, Scotland’s spending plans – democratically agreed by our own Parliament – will be cut as a result of George Osborne’s decisions.

    Scotland needs investment—not cuts. That is the price of being part of the United Kingdom.

    And to make matters worse, the combined effect of the Chancellor’s cuts will deliver a hammer blow to some of the most vulnerable in our country.

    Working tax credits – cut.

    Housing benefit – cut.

    Child benefit – cut.

    Child tax credits—cut.

    Council tax benefit—cut.

    Disability living allowance—cut.

    Employment and support allowance—cut.

    Child trust funds—cut.

    And unsurprisingly VAT and employee national insurance contributions—up.

    And the NO campaign believe this is an example of their excellent stewardship of the UK economy.

    The tragedy of this week’s budget is not simply the misguided policies of this Tory Government. It is the missed opportunity for Scotland.

    The contrast with the record of the SNP government could not be clearer.

    For six years, we have delivered careful management of the public finances.

    We have balanced the Budget.

    We have lived within our means. But we have also restored free education, abolished prescription charges, safeguarded the NHS, secured pensioners’ bus passes. And, for the sixth year in a row, we have frozen the Council Tax.

    That is a triple-A record at a time when the UK has lost its triple-A rating.

    But Conference, it has not been without its challenges.

    Along with our local government partners, we’ve plugged Westminster’s £40million cut to the Council Tax Benefit budget for next year.

    We’ve set up a £33 million Scottish Welfare Fund to administer Community Care Grants and Crisis Grants, reinstating £9 million of funding cut by Westminster in recent years to financially support an extra 100,000 vulnerable Scots.

    We’ve given £5.4 million to benefits advice groups to help them cope with the increasing demand for help from hard-hit families as a result of Westminster’s cuts.

    And as the First Minister announced yesterday all SNP-led local authorities will follow the lead of Dundee in halting the threat of evictions from this disgraceful tax for those struggling to pay.

    We have not stood by while Westminster cuts fall hardest on our poorest.

    But to the people of Scotland I say, in all honesty, we cannot, within our limited powers and resources, fix every Westminster cut. To create a fair and prosperous society we need the powers of independence.

    Conference, the foundations for Independence are clear.

    Scotland is wealthy, in numbers and in our people.

    With our geographical share of oil, Scotland would be ranked 8th out of the 34 OECD member countries. We are a rich country.

    Five of the seven countries that rank above Scotland are small independent nations.

    We are better off than the rest of the UK.

    Our population makes up 8.4% of these Islands. Last year we contributed 9.9% in revenues to the UK and got 9.3% in return.

    The difference is that Scotland was in a relatively stronger financial position than the UK to the tune of £4.4bn, or £824 per person.

    With independence we could have chosen to invest an extra £1.4bn in capital projects, creating jobs and growth, to save £1.4bn in an oil fund for the future and to borrow £1.4bn less…all of that – and we would still have enough left over to undo the bedroom tax.

    The numbers show that Scotland’s relatively stronger fiscal position last year was not a one off event.  Over the past five years, Scotland has been in a relatively stronger fiscal position than the UK as a whole to the tune of £12.6 billion.

    And when we look further back, between 1980 and 2011, Scotland has run an average annual surplus equivalent to 0.2% of GDP, whilst the UK has run an average deficit of 3.2% of GDP.

    That’s the true picture Scotland’s books present.   This country pays her way and has strong foundations for Independence.

    Conference, you will have noticed we have had a bit of a rammy over oil in recent days.  A rammy over oil is nothing new.

    The NO campaign have accused me of saying one thing in private about oil and a different thing in public.

    That would never do would it.

    Back in the 1970s the Westminster Government claimed in public that oil was volatile and running out.  But in private, the UK Government said something very different.  The Government’s Chief Economist at the time in Scotland, Gavin McCrone assessed the impact of oil.

    His verdict was this:

    “All that is wrong now with the SNP estimate [of government oil revenues] is that it is far too low”

    Well this Government will take no lessons from the Unionists.  We say the same thing in private as we say in public.  We say oil production is rising.  Investment is rising, now worth around £100 billion.

    Oil prices are higher than the Office for Budget Responsibility predicts.

    Scotland is estimated to be the largest producer of hydrocarbons in the EU.  The industry has the potential to generate between £41 and £57 billion in tax revenue between 2012-13 and 2017-18.

    We are on the cusp of another great boom in the oil industry and our opponents are at it again; claiming it is all going to run out; pretending that oil is a problem instead of the opportunity that it truly represents.

    Conference our job is to make sure Scots are not duped out of our oil opportunity for a second time in our history.

    Our opportunity is not just about oil.

    We have some 25% of Europe’s potential offshore wind and tidal energy, a tenth of Europe’s wave power potential, and an estimated 50% of carbon capture and storage reserves. We remain one of the richest energy nations in Europe.

    This represents a huge resource which if harnessed correctly will make an important contribution to the Scottish economy for decades to come. And as oil and gas mature, so the new technologies of renewable energy and carbon capture will be reaching their peak.

    There can be no doubt, that in the event of a Yes vote in 2014 Scotland will be becoming independent from a position of relative economic strength.  Having the ability to properly combine the assets of our people with our natural assets in the pursuit of a more prosperous Scotland can only enhance our potential.

    For beyond any one sector or industry, we have the strength of the people of Scotland and of our nation itself.  We have a strong intellectual base with many of our Universities regularly appearing in assessments of the Top 100 global places of learning.

    Last year a record 87% of school leavers sustained their place in education, employment or training. And youth unemployment is currently falling at its fastest rate since 1992.

    Our opponents only talk about what we “can’t do” never what we “can do”.  Conference, our children don’t have time any longer for Scotland’s defeatists.  We need to take control of our future.

    We have to explain to Scotland what is possible.

    That is why we invited a group of world leading economists, some of them Nobel laureate winners, to analyse Scotland’s economy and finances.

    Their 222 page vision for the macroeconomic framework of Scotland will

    – build investor and business confidence,

    – enable Scotland to develop sustainable fiscal policies,

    – and sustain an economy that enables Scotland to develop our own unique policies.

    It’s a robust structure that provides foundations for prosperity, fairness and economic opportunity.

    The work of the commission considers all the options that are of significance in designing the macroeconomic framework for an independent Scotland.

    They make the argument that retaining Sterling would make sense for Scotland and the rest of the UK.  It would give price stability and enable a future independent Government to use the full  fiscal and economic flexibility that comes with sovereignty to  change and adapt to new economic circumstances, promote growth and create jobs.

    A Sterling zone would provide a consistent and transparent framework to manage the transition process, and ensures that the rest of the UK would also retain an integrated market with a key trading partner.

    And Conference, far from all the rhetoric we know the UK Government accepts that it is possible.

    And I’m pretty sure conference that our £45bn worth of exports to the UK will bring them to the table the very moment the Yes ballots are counted.

    The Fiscal Commission also recommended an independent fiscal body to consider fiscal discipline.

    Scotland knows the hardship suffered when a country lets its finances get out of control.

    Westminster took us into the second largest structural budget deficit in the EU despite a decade of continuous economic growth. We know what this exposure led to when the recession hit. We see the impact on intergenerational poverty. We have nothing to be thankful to Alistair Darling for his stewardship of the UK economy.

    The Fiscal Commission also encouraged us to set up an oil fund.

    Norway has had their oil for forty years—the same amount of time Westminster has squandered ours. They formed an oil fund 17 years ago which is now worth £450 billion.

    We’ll save on the upside and deliver for Scotland’s pensioners and future generations.

    As the Commission makes clear, as a nation our economic fundamentals are sound – but, Conference and Scotland, we could do better.

    The sad truth remains: while many of our economic characteristics are as strong, if not better than the UK as a whole, we lag behind many other countries of a comparable size both on key economic and social indicators.

    The Fiscal Commission gave us a substantial and thoughtful route map on creating a sound economic framework for an Independent Scotland. I thank them for this work and I have some advice for the NO campaign. Read the report – you’ll learn something about how to run sustainable public finances.

    Conference, the Fiscal Commission also told us something else.  We live in a society of growing inequality.

    In terms of GDP per head, the UK is currently ranked 17th in the OECD and 28th in the UN’s Human Development Index – between the Czech Republic and Greece.

    Too many of our people live in poverty, part of a UK economic structure and society which is one of the most unequal in the advanced economies.

    Despite growth in recent decades, inequalities have grown rather than fallen, and the gap between the rich and poor has become greater. Those inequalities will only rise as a result of the forthcoming welfare reforms.

    Indeed, the OECD in 2011 showed that since 1975 income inequality among working age people increased more quickly in the UK than in any other OECD country

    Regional variations within the UK have also widened. Policy decisions have been taken at the UK level with little consideration for their impact in different parts of the UK.

    Every person struggling with the impact of poverty is a member of our society unable to play their full part in the economic life of our country. All this does is hinder our efforts to become a stronger and more successful nation where all have the opportunity to flourish.

    So our pledge to the people of Scotland is this.  The point of Scotland is becoming independent is to give us the power to boost the economy and tackle inequality.  That is what people can expect with Independence.

    With independence – Scotland would have control over new economic levers that can be used to deliver economic growth, boost resilience, achieve greater fairness and opportunity, promote sustainability and boost long term competitiveness.

    We can fully unlock Scotland’s job creation potential and improve the prospects of the people in Scotland.

    At the heart therefore of our case for independence is the argument for greater economic powers for Scotland to be able to grow our economy more quickly and build a more cohesive, sustainable and inclusive society.

    Scotland has proven its competence in managing the powers we currently hold. Independence will allow us to build upon this platform of trust and competence into areas of responsibility available to other comparable nations.

    With the momentous date in the diary, let’s get ready for a day when policies are no longer engineered in London and endured in Scotland.

    A day when we are no longer held back.

    Independence offers the people of Scotland the chance to make our country a wealthier, fairer, more sustainable place in which we can all to live.

    That is the bright future that lies ahead for our country.

  • Hugo Swire – 2013 Speech to Commonwealth Business Forum

    hugoswire

    Below is the text of the speech made by Hugo Swire to the 2013 Commonwealth Business Forum on 13th November 2013.

    I am delighted to speak to you all today and I am grateful to Governor Cabraal for giving me the opportunity to speak at this lunch.

    Forums like this are vital for increasing trade between Commonwealth countries and promoting the fundamental values that I believe are crucial for emerging economies to fulfil their potential.

    Capitalising on the networks and relationships at our disposal in this globalised, competitive world will help us all to promote prosperity, stability and security. And the Commonwealth is a long-standing network of old friends which lends itself perfectly to this ambition. Indeed, with 53 members, representing a third of the world’s population and over 1 billion citizens under the age of 25, the Commonwealth itself numbers some of the world’s fastest growing economies: exporting over £2 trillion of goods and services year. 20 percent of export trade within the Commonwealth is, I am told, British. I am particularly pleased that there are more companies here from the United Kingdom that any other Commonwealth country, apart from, of course, our hosts here in Sri Lanka.

    For the UK, we have strengthened our commercial capacity in our High Commissions in Commonwealth countries in Canada, Sierra Leone, South Africa, Mozambique, Ghana, Kenya, Cameroon, Papua New Guinea and Guyana. UK Trade and Investment helps British companies of all sizes do business across the Commonwealth providing the assistance required to expand the already deep business links between us all. We have redoubled our efforts to get small and medium sized enterprises in the UK to boost exports and rediscover the buccaneering spirit that I know will see British businesses undertake new venture and forge new markets across the globe.

    The Commonwealth provides its members with a solid platform for trade and investment. Our shared language, similar legal systems and our founding principles of democracy, the rule of law and good governance set the parameters for trusting, financially beneficial partnerships.

    This networking lunch is an opportunity to broaden, strengthen and deepen relationships between us all.

    We believe that sustainable prosperity and development is not possible without good governance, rule of law, property rights, effective public services, strong civil institutions, free and fair trade, and open markets.

    This applies not just to countries struggling to rise out of poverty, but also to those – like Sri Lanka – which have recently achieved middle income status, and which aspire to make the transition to high growth and high per capita wealth. And also to established economies like the UK, where we have shaken up the public sector and put a renewed emphasis behind private sector growth.

    This approach is at the core of what my Prime Minister, David Cameron, has called the ‘golden thread’ of development, as he said: we should not “just ask whether countries are getting richer; we [should] ask whether they are getting freer, getting fairer and becoming more open too.” And it has been central to the UK’s efforts through the G8 on tax, trade and transparency.

    The Commonwealth is perfectly placed to support development in this way. It does not focus exclusively on helping its member states to become richer. It also focuses on helping its member countries to develop their democratic credentials; to foster the rule of law; to have open, strong and transparent institutions; and to adhere to the Commonwealth’s political values and principles.

    Good governance, like good corporate behaviour, helps create jobs; contributes to market sustainability; reassures shareholders; attracts investors; improves reputation and has potential to generate long-term growth. Investors are understandably more cautious about doing business in unstable, repressive states.

    In Sri Lanka corporate governance and the general business environment has been improving since the end of the conflict. But it is not perfect and there is room for improvement. This means increased transparency, simpler regulation and faster procedures, good governance and respect for the rule of law. These are the factors, Golden Thread factors, that can provide the certainties and assurances that UK companies require if they are to continue to invest here.

    UK companies already have a significant foot-print in Sri Lanka. There are over 100 UK companies operating here, including some of you who are represented today, HSBC, Standard Chartered, and others such GSK, Unilever and Rolls Royce. The UK is Sri Lanka’s 2nd largest trading partner in terms of volume and we are a top 5 investor. And earlier this year the largest ever bilateral trade contract was signed allowing Airbus and Rolls Royce to provide Sri Lankan Airlines with a new fleet of aircraft and engines.

    Over the coming years, and if the Golden Thread factors develop positively, I would expect the number of UK companies to increase further and to expand into other sectors where the UK is home to world class expertise.

    One area where the UK has unrivalled expertise is Financial Services. The UK is the world’s pre-eminent centre for financial services, creating the best environment for businesses and their employees, customers and communities to prosper.

    In addition, Britain is the leading exporter of financial and professional services across the world and a thriving and rapidly expanding hub for Islamic Finance. We have a huge amount to offer Commonwealth nations – not least with Scotland hosting next year’s Commonwealth Games in Glasgow when that great historic trading and manufacturing city will host the Commonwealth Games Business Conference, to which you are all invited, in July.

    The Commonwealth’s strength is in its diversity, and that is as true for trade and business as anything else.

    So, I hope that you will all seize this opportunity to make new contacts and forge new business links from across the Commonwealth Family. My Government is determined to reinvigorate the Commonwealth, both as an international organisation and a natural place to do business. The Commonwealth ‘effect’ – our shared principles of democracy, rule of law, good governance and similar legal systems provide solid foundations for doing business and a platform for trade, investment, development and in turn prosperity – and, some studies say, can bring a trade advantage of up to 50 percent.

    Let’s make the most of it!

  • Hugo Swire – 2013 Speech on the UK and Korea

    hugoswire

    Below is the text of the speech made by the Foreign Office Minister, Hugo Swire on the UK and Korea. The speech was made at Edgbaston Cricket Ground in Birmingham on 5th February 2013.

    Thank you to our sponsors, British Airways, who have re-opened a direct route to South Korea – which makes a big difference. And thanks also to our colleagues from PwC and KOTRA.

    Good morning and welcome to ‘Opportunity Korea week’. It is a real pleasure to be here at Edgbaston, one of England’s most famous cricket grounds.

    As my colleague the Business Secretary, Vince Cable, outlined at the opening of ‘Opportunity Korea’ week last night in London, Korea is a country that is full of opportunities.

    I saw these opportunities for myself when I visited Korea last October – my first visit to Asia as a Foreign and Commonwealth Office Minister. I saw the country’s dynamism and creativity; a Korea whose ingenuity and sheer energy has propelled it to become the 12th largest economy in the world.

    Scott Wightman, our Ambassador in Seoul, had just taken up his post. The fact that I had made a dedicated visit and was not travelling on to anywhere else showed how important South Korea is to us.

    If we are to get ahead of our competitors and meet the Chancellor’s ambitious target to increase the value of our annual exports to £1 trillion by 2020, then British companies have to look to countries like Korea – which is a truly remarkable example of a sustainable and knowledge-based economy.

    Our trade with Korea is already growing, so we have a strong basis for further growth. British non-oil-related exports to Korea were up 16 percent in January to November 2012, compared to the year before. That is not altogether surprising – more and more British companies are choosing to enter the market and I met a number of their representatives during my visit.

    But I am convinced we are not yet taking full advantage of the opportunities on offer. I believe more of our fantastic SMEs could be exploiting the benefits of the EU-Korea Free Trade Agreement, which is eliminating tariffs on 97 percent of all goods by July 2014. This represents a huge market for you. I want to see more British companies building on the success of firms like Delcam and MIRA here in the West Midlands; or firms like Bonnie Baby, Harris Tweed and Lye Cross Farm, a West Country cheese maker which has increased its sales to Korea by 50 percent in the last year with help from UKTI and our Embassy in Seoul.

    You are all here because you are either already active in Korea or because you want to learn more about the opportunities. I hope that after this week of events there will be enough of you to go on a trade mission. I hope that those of you with experience in the market will share what you’ve learned with the newcomers. For my part, some of the points I find particularly striking are:

    Korean consumers like British brands and love British design;

    Secondly, the EU’s Free Trade Agreement with Korea is the most ambitious of its kind to date, and could be worth over £500 million per year to the UK economy if British companies take full advantage of it;

    Thirdly, Korea has established global brands – there is probably not a household in the UK without a Korean product in it – and if UK companies work with these brands, through them they will be able to gain access to other significant markets;

    And last but not least, Korea wants to do business with us; they hold British brands, products and expertise in high regard.

    Diplomatic relations build trade – the more you understand each other, the easier it is to do business. This year is the 130th anniversary of diplomatic relations between the United Kingdom and Korea. To mark the occasion, we are working to establish a Joint Economic and Trade Committee, or JETCO, with our Korean partners. The Committee will look at tackling market access issues and creating mutual business opportunities. This is but one of the areas the Government is prioritising, which reflects the importance we place on doing more business with Korea.

    Today is the second of five days of events across the UK as part of Opportunity Korea week. But Opportunity Korea doesn’t end on Friday. All of you will have the chance to join an outward trade mission to Korea during the next 12 months when UKTI Seoul will be able to put together a tailored programme of visits with Korean buyers, distributors and agents to help you break into or develop your position in the Korean market.

    Some of the great global brands were set up by British businesses going to the four corners of the globe. Some bigger companies think they can do this themselves, but I still think it is wise to use the expertise of UKTI.

    I hope that you will get a lot out of today’s event. Please take the time to talk with the Scott and his team. Take advantage of the presence here today of Gary Harte and Steve Duckworth, both of them working for successful British businesses in Korea and able to tell you about the intricacies of doing business. Talk to Henry An from PwC Korea who can offer expert advice on the legal and regulatory environment. And if you’re considering investing in Korea, make sure you talk to one of the representatives from KOTRA.

    I have responsibility for a large part of the world in the Foreign and Commonwealth Office; and I don’t know if it is because I visited Seoul first, but I was struck by the opportunities.

  • Owen Smith – 2013 Speech to Labour Party Conference

    Below is the text of the speech made by Owen Smith, the Shadow Secretary of State for Wales, to the 2013 Labour Party conference in Brighton.

    Conference,

    It was 25 years ago this week that I came here to start life as a student at the University of Sussex.

    The year was 1988, the year the Lib Dems were founded, and Sussex, renowned for its progressive politics, was among the first universities to establish a Lib Dem Society.

    I wondered how they were getting on.

    So I looked up the university society listings before I came here today and sure enough there’s a Clegg-shaped hole between the Labour Club and the Mexican society.

    The University was also famous as the setting for Malcolm Bradbury’s novel, The History Man.

    The story’s anti-hero begins as a nice but naive, bearded and sandal-wearing radical, who open marriage descends into treachery, lies and a trough of ‘moral turpitude’.

    Sound familiar, Nick?

    In the TV version, our hero ends up voting Tory, for a rotten right wing government which privatised our public goods, put a million young people on the dole, and introduced a tax which united the country in opposition.

    Who says life can’t imitate art?

    But that’s enough of the jokes. Their conference finished last Thursday.

    Ours is just beginning – and what a beginning with that wonderful, welcome announcement that a Labour Government led by Ed Miliband will scrap the bedroom tax.

    Of course a Labour Government will scrap it.

    We will scrap it because it is an affront to our values of fairness and decency,

    Because it neither saves the money they claim, nor solves the crisis in our housing.

    We will scrap it because like so many of the policies of David Cameron’s deeply out of touch government it seeks to balance the books on the backs of the poor and the disabled.

    And let me tell you Conference, people in Wales – hit harder by the Bedroom Tax than anywhere in Britain – will have heard that news and understood that Labour is on their side.

    And just as the bedroom tax has hit Wales harder than any other part of Britain, Wales also has more workers earning less than the living wage than anywhere else – more than one in five of the total workforce.

    So Welsh workers and Welsh wages need a Labour Government in Westminster as well as in Wales to fight their corner. And Labour this week is sending a clear message to the hard working people of Wales.

    We are on your side. We will strengthen the minimum wage and push for a living wage too.

    Our values in action, conference.

    And our proof, conference, that there is always an alternative.

    In Wales, a Welsh Labour Government, has been getting on with the job of defending those values and articulating that alternative, protecting the living standards of ordinary people that have fallen so drastically under the Tories.

    In Wales, we kept the EMA and refused to treble tuition fees – holding firm the ladder of education and social mobility that the Tories are so keen to draw up behind them.

    In Wales, we’ve rejected the privatisation of Bevan’s NHS and held fast to its role as a beacon of excellence and equality.

    And in Wales we’ve been on the side of working people with policies that have put 6000 young people back to work, and by taking bold action earlier this month to stamp out the disgraceful blacklisting of construction workers.

    But conference, despite Carwyn and our Welsh colleagues’ values and innovations and sheer hard work, devolution alone is not enough.

    – Not enough to stop Welsh wages from falling by £1600

    – Not enough to prevent under-employment become the new norm in our economy.

    – And not enough to stop food-banks become a shaming feature of communities across Wales.

    No, a Labour Government in Wales alone is not enough – and will never be enough – however much devolution we deliver.

    Because the social and economic union between the nations of Britain provides a safety net that Scotland or Wales could never recreate if they chose to fly alone.

    And though Labour will always defend and cherish the proud identities of the different nations of the UK, we will also celebrate the centuries of common endeavour and shared history that makes us also One Nation.

    And which allows Labour Governments in Westminster to share Britain’s wealth more fairly than the market or the out of touch Tories ever would.

    So credibility, yes. And deficit reduction, of course. But decency, fairness and transformation too.

    Because we need a Labour Government to rebuild the very foundations of our economy, from the bottom up so that it works for the many, not the few.

    We need banks that serve the industry of our country – not speculate idly in its success or failure.

    We need companies that feel a duty to the society in which they operate – not just to the shareholders who trade them around the Globe.

    We need work that pays a decent wage – a Living Wage, with prices under control and growth that is fairly shared across classes and regions.

    And we need a Labour Government to consign the Bedroom Tax to history, to strengthen the Minimum Wage and to deal with the cost of living crisis that is damaging our communities.

    Conference, Ed Miliband spoke for Britain on this week when he said we will do these things.

    That we can do better than this.

    That Britain can do better.

    He spoke for Britain…and he warmed hearts in Wales.

    He set Labour marching forward once again…

    And Wales will march with him.

    Led by our First Minister, Carwyn Jones…

  • Chloe Smith – 2013 Speech at the Government Construction Summit

    chloesmith

    Below is the text made by the Cabinet Office Minister, Chloe Smith, on 2nd July 2013.

    Since coming into office we have made it a key priority to reform public sector construction so we can build the schools, hospitals, prisons and roads this country deserves – and at the same time help develop a more efficient, more innovative and more competitive construction industry.

    This is a hugely important agenda for us. Britain remains in a global race for the jobs and opportunities of the future.

    And our construction industry is critical to this country’s growth – both in creating jobs and in providing the crucial infrastructure this country needs to compete globally.

    So we are reforming to ensure we invest in the right places to achieve growth and support UK suppliers to grow here and abroad.

    We are also reforming to achieve greater efficiency. The public sector is under unprecedented pressure to produce more for less today. As we address the huge deficit we inherited – budgets are tighter across the sector, but the demand and expectations for public services are rising.

    We owe it to the taxpayer to deliver public services that don’t just cost less but are better, more innovative and more catered to the individual’s needs.

    Today I want to talk about how the Government has and will continue to promote efficiency and reform in public sector construction, alongside innovation and growth in the construction industry. I will focus on the key areas of efficiency, cost benchmarking, procurement reform, fair payment and new digital models of procurement.

    But first I’ll highlight the context for reform. As you know, two years ago, this Government published a cross-Government Construction Strategy with clear objectives to promote efficiency and reform in Government construction, alongside innovation and growth in the construction sector.

    How would this work?

    On one hand Government would be a tough negotiator – hunting for the best prices and deals on behalf of the taxpayer. We set out a target to make public sector construction 15 to 20 per cent more efficient by 2015.

    But at the same time we would build long-term strategic relationships with suppliers; making it easier and simpler to do business with Government.

    Today as you’ve heard – a new Industrial Strategy for construction (IS) has been launched – a fine example of how industry and government has worked together to give the sector a long term vision. This builds on foundations of the Government Construction Strategy and gives it a broader momentum to spearhead lasting change through reform.

    The themes of the Government Construction Strategy are peppered throughout the drivers of change highlighted in the Industrial Strategy.

    The first of these themes I want to discuss is efficiency.

    In the past there was a shocking productivity gap between the public and private sectors. And the more money that’s been pumped into public services – the less efficient we’ve become.

    This wasn’t good enough at any time – today facing the twin challenges of less money and rising public expectations – there needs to be reform.

    The Cabinet Office’s Efficiency and Reform Group has led an ambitious programme of reform, transforming the way Government works – acting as an effective operations centre at the heart of Government, driving efficiency and clamping down on waste.

    This work supported Departments to deliver £3.75 billion of savings in our first year in office, £5.5 billion in 2011-12 and we recently announced £10billion of savings for 2012-13.

    Construction is playing its part in this. We reduced costs to contribute £447 million savings in 2012/13.

    One of our key efficiency reforms has been the publication of benchmarks of Government construction costs establishing what a project should cost.

    Before the launch of the Strategy, few government clients had compiled their benchmarks and made them widely available.

    This is no longer the case. We have now published department cost reduction trajectories and construction cost benchmarks, which help inform central government and wider public sector clients as to what they currently pay for construction and what their construction should therefore cost, moving forward.

    This is important for spurring on efficiency. For example since 2010 the Education Funding Agency has reduced the average cost of a new secondary school from £2450/m2 to £1460/m2 and is currently out to tender with the Priority Schools Building Programme at this lower cost. This represents a 40 per cent reduction.

    The cost data will not reduce the overall amount to be invested in construction but will mean that taxpayers will get more for this money.

    So successfully delivering projects at 15 to 20 per cent less than the historic benchmark will mean that the public sector will be building £1.2 billion worth more in projects by 2015.

    The equivalent to approximately 60 new secondary schools.

    The latest publication of cost benchmarks is published today with, for the first time, more granular department cost benchmarks, and data direct from local authorities. It shows that costs are coming down and sets the pace at which further reductions will be achieved. As we move forward we would like to include private sector comparison data – this exercise is now underway and I would appreciate your help to build up this overarching sector view.

    A Government hunting for the best deals is not just good news for the taxpayer and for the service user – it’s good for British businesses too. Efficiency and growth will go hand in hand as we open up to all kinds of businesses and business models.

    We’re changing the way we engage with the industry over upcoming contracting opportunities. In the past, constrained by fears about picking winners, cosiness with incumbents and breaching theories of efficient markets, we have left business to flounder in the dark about what’s coming up – meaning we were also blind as to what the industry could offer.

    But over the last two years, Government has been publishing a pipeline of upcoming opportunities that gives suppliers a clear picture of the contracting landscape across Government construction.

    The latest iteration includes £19.2 billion worth of investment over the next two years. Now that the spending round has been announced a refresh of projects will be completed shortly. So keep an eye open for updates.

    I hope you’ve taken the time to visit the New Models of Delivery knowledge hub today and view our new microsite that will make pipeline data more accessible to search.

    The pipeline is seen as a key enabler for growth and investment in the Industrial Strategy. It calls for further development to bring a regional emphasis and ownership of local pipeline data and to encourage new partners to contribute.

    As well as engaging better with the market before procurement – we are also reforming the way we procure. Historically businesses have found bidding for public sector work excessively bureaucratic, time-consuming and expensive. This often meant the best, most cost-effective ideas were shut out from the start – particularly those coming from small, innovative firms.

    SMEs are a crucial engine for growth – 99.9 per cent of the UK’s businesses are SMEs, they are responsible for almost half of our private sector output and create two thirds of new jobs.

    Yet when we came into office only 6.5 per cent of Government business was going to SMEs.

    This Government set out an aspiration to ensure that 25 per cent of our business in Central Government should go – directly or indirectly – to SMEs by 2015.

    To achieve this we have made our procurement processes much simpler, more open and less bureaucratic – so all businesses, no matter what their size, have a chance of success. For example, using PAS91 (2013) to standardise PQQs in the construction industry; and advertising contract opportunities centrally.

    There is also much greater visibility of opportunities. In the past businesses often simply didn’t know what was out there. Now the Contracts Finder website gives businesses a single place to survey everything on offer from Government.

    We are using technology to enable quicker procurements such as e-Auctions.

    And we have introduced more accountability. Our Mystery Shopper allows suppliers to report instances of poor procurements across the public sector for Cabinet Office to investigate.

    These reforms are starting to pay off. Overall Government has increased its direct spend with SMEs from 6.5 per cent in 2009-10 to 10 per cent in 2011-12, and in 2011-12 figures from Government’s top suppliers shows that SMES had benefitted from a further 6.6 per cent of spend in the supply chain. We hope to publish information on spend in 2012-13 later this year.

    Another key priority for us is to ensure there is prompt payment to the supply chain. Timely access to cash is of course critical to the survival of many SMEs.

    There is now a contractual obligation which took effect for all central Government contracts placed to pay down to tier three within 30 days.

    We are also working with key central government departments to roll out Project Bank Accounts across government construction projects. This will improve the speed and security of payment to members of construction supply chains down to tier 3 within a matter of days.

    This is already working well. The Highways Agency now uses Project Bank Accounts on all contracts awarded post October 2011.

    Through electronic bank accounts they pay prime suppliers at the same time as subcontractors down to tier 3 and already this has had a great impact in preventing cash from being held up in supply chains.

    Last year alone £1.1 billion worth of projects signed up to use Project Bank Accounts and I’m pleased to announce today that in 2012/13 we exceeded our target of £2 billion, with nearly £2.2 billion of spend having been committed via Project Bank Accounts since their introduction.

    The Industrial Strategy re-emphasises this Government’s commitment to fair payment. PBAs, along with supply chain finance and enterprise credit guarantee scheme will continue to support liquidity to the supply chain.

    The reforms I have outlined so far are making a difference – but they are not the end of the story.

    We are determined to keep piloting new innovative ways of working with the industry – and ultimately embed these across Government and other public bodies. And we are committed to driving efficiencies through harnessing the latest digital technologies.

    This is a key theme in the Industrial Strategy – the aim is that new models of procurement once proven, become business as usual across the public sector.

    We are currently trialling three new models of procurement which call for the early involvement of the supply chain, and more integration around the design, the construction and the manufacture of products.

    These are: Integrated Procurement Insurance; Two Stage Open Book and Cost Led Procurement. Building Information Modelling (BIM) is also becoming successfully embedded in Departments along with Government Soft Landings.

    I hope you’ve all taken the opportunity to meet the experts spearheading these new ways of working at the New Models of Delivery and BIM knowledge hubs here today.

    We are starting to see how effective these new methods can be. For example using Two Stage Open Book, Surrey County Council has reduced the cost of maintaining the county’s roads by 15 per cent [in addition to 16 per cent achieved in procuring long-term contract]. Project Horizon has demonstrated clearly the benefits of contract-led, properly structured early contractor involvement and supply chain improvement processes.

    Then the Ministry of Justice has secured £800,000 of savings through the implementation of BIM at Cookham Wood prison in Kent where a 180-cell extension is now on site. Through BIM’s innovative 3D modelling, MoJ was able to visualise exactly what was being built before the process started and identify any potential issues, leading to savings being made right at the outset.

    BIM is the enabler of a better future; a more collaborative built environment that liberates added value at all stages of the asset lifecycle. It allows SMEs to compete with bigger companies. And the savviest, smartest firms are already maximising the potential that BIM can unlock.

    Take Bryden Wood, a British-based multi-disciplinary design and technology company, who in February won a competitive tender for a landmark construction project in St Petersburg, Russia. They beat much larger, international practices and it was their experience of working on complex projects where BIM is essential to coordinate the vast range of design, construction and handover activities that secured the contract.

    The Government has established a requirement for centrally procured public projects to be level 2 BIM-enabled by 2016. Through this, we want to encourage innovation and collaborative working across all tiers of the supply chain right from the start of procurement process.

    In March this year, Fiatech recognised the UK government and industry for their leadership in advancing technology and productivity improvement in capital projects by presenting us with the James B. Porter, Jr. Award for Technology Leadership. This award will be officially presented to us in a few moments.

    This is a real achievement – the UK is now seen as a world leader in the use of BIM in the public sector.

    Public sector construction in this country is entering a new era – where design excellence, effective procurement, efficient delivery and competitive pricing is becoming the norm. This is good news for the taxpayer, for services users, the industry – and the economy.

    We are producing world class iconic public sector buildings such as the London Olympics Velodrome, Tate Modern and UCH Macmillan Cancer Centre. All winners of the Prime Minister’s Better Public Building Award at the BCI annual awards.

    But we are not about to start resting on our laurels.

    To continue to achieve success the Government and industry needs to keep working together – as we have on the Industrial Strategy.

    It’s vital we continue to join up and share our resources, ideas and best practise. Tell us where barriers remain, report incidences of bad practise to Mystery Shopper – and if you have an innovative idea that will save money and improve public services – we want to hear it.

    This Government is open for business – together we can create better public services and a better future for construction in the UK.

  • Chloe Smith – 2013 Speech to the Federation of Master Builders Conference

    chloesmith

    Below is the text of the speech made by the Cabinet Office Minister, Chloe Smith, to the Federation of Master Builders made on 18th June 2013.

    Thank you for inviting me to give this keynote speech today celebrating the launch of the report Improving the public procurement process for construction SMEs (pdf).

    Federation of Master Builders (FMB) has done a great job of getting together key influencers to this event, including my MP colleagues and LGA representatives and I am delighted to be invited to address such an influential audience.

    This report raises important issues that I recognise – SMEs find the Pre-Qualification Questionnaires (PQQs) complex and cumbersome, framework agreements to be bureaucratic, and that future business opportunities from local authorities are not always visible.

    These are much the same issues this government has been addressing in central government reforms:

    – we are driving through real transformational reforms in procurement

    – we have radically improved the visibility of investment opportunities through pipelines

    – we are absolutely committed to fair payment

    – we are significantly improving engagement, ensuring that we listen to SMEs, and that they have their say in our policy process

    Already we are seeing significant positive results. Things are changing for the better.

    But, this report has reiterated to me the real value of widening the action we have taken in central government. In particular, sharing best practice we have implemented in central government processes with the wider public sector including local government. The recommendations of this report all chime in with the key themes of these reforms.

    So today, I feel is a good opportunity to share with you the experiences of those reforms and to explore how we can work together to take this experience and best practice to the wider public sector.

    But first, let me set the background to the action we have taken.

    Creating the right conditions for small businesses to grow

    More than 95% of the UK’s 4.8 million businesses are micro firms that employ less than 10 people. Together they account for a third of private sector employment (7.8 million) and a fifth of private sector turnover. So SMEs such as the builders’ industry are a crucial engine for growth in our economy.

    The public sector spends £230 billion on goods and services a year – that’s roughly 15% of the UK economy and £1 for every £7 spent in Britain.

    Businesses have consistently found bidding for public sector work excessively bureaucratic, time-consuming and expensive. This has often meant the best, most cost-effective ideas were shut out from the start – particularly those coming from small, innovative firms.

    This government very quickly recognised that for a healthy market place to operate it needs to open and expand access to opportunities, especially for SMEs, and make the conditions right for small businesses to grow.

    When we came into office we found SMEs were winning only around 6.5% of the value of central government’s procurement. This wasn’t good enough.

    So one of our first priorities was to transform the way we did business so that the smaller businesses would have better opportunities to do business with the public sector.

    Many of you will be aware of this government’s aspiration to ensure that 25% of our business in central government should go – directly or indirectly – to SMEs by 2015.

    So we have worked hard on that journey. Spend with SMEs has increased across government from 6.5% in 2009 to 2010 to 10% in 2011 to 2012 at a time when overall procurement spend has declined.

    SMEs have in fact benefitted from a further 6% in indirect spend through the supply chain for 2011 to 2012. We hope to publish information on spend in 2012 to 2013 later this year.

    There are a number of things we have done to get us to this place. Let me share with you our experience of the reforms we have made to set us on this transformation.

    Positive action taken

    We are nurturing relationships.

    We believe it makes commercial sense to nurture our relationships with suppliers – to discuss what’s coming up on pipelines and investment plans, and to ensure early engagement with supply chains prior to procurement.

    We have made sure that now SMEs have a Crown Representative pushing for them at the top. Their voice is heard in the high level discussions, influencing the policies we design.

    We are reforming procurement.

    As you demand, we have made our procurement processes much simpler, more open and less bureaucratic – so all businesses, no matter what their size, have a chance of success. For example, using PAS91 to standardise PQQs in the construction industry; and advertising contract opportunities centrally.

    We are using technology to enable quicker procurements such as e-Auctions. And Cloud Store, an online appstore for ICT services, allows public sector organisations to purchase off the shelf IT services on a pay as you go basis.

    In construction we are committed to drive efficiencies through harnessing digital technologies. We have established a requirement for projects to be BIM-enabled from 2016. Through this, we want to encourage innovation and collaborative working across all tiers of the supply chain from the start of procurements.

    We are now seen as a world leader in the use of BIM in the public sector. We have established the BIM4SME group to assist those making the journey, to share experiences and learn from others.

    We have improved the visibility of contracting opportunities.

    The Contracts Finder website was launched to give businesses a single place to survey everything on offer from government. Over 15,000 contracts have been published to date and nearly 5,000 have been awarded to an SME.

    In July 2011, government construction was the first sector to publish pipelines to help the industry have the confidence to invest and to gear up for future public sector contracts. We have now published pipelines across 18 sectors via the Contracts Finder portal. These provide visibility of government business opportunities worth £79 billion spanning the next 5 years.

    We will continue to publish pipelines every 6 months to help suppliers to spot opportunities at an early stage so they can compete and win work. I want to encourage SMEs to use these pipelines as a tool to engage with their suppliers and key markets.

    We have increased the accountability of public procurement.

    Our Mystery Shopper scheme allows suppliers to report instances of poor procurement for Cabinet Office to investigate. For those of you who are not familiar with Mystery Shopper service – it allows suppliers, including all those within governments supply chains, to report bad/mad procurement practice.

    So if a supplier encounters poor procurement practice, such as an overly bureaucratic pre-qualification requirement or unreasonable or inappropriate selection criteria they can refer it to our Mystery Shopper Service, who will raise it with the contracting authority on their behalf.

    At the end of last month, Mystery Shopper had received 425 cases and closed 336 with a positive outcome in over 80% of cases.

    We are seeking and then responding to feedback.

    As you discussed, we are listening to and acting on the feedback we get from SMEs. For example, based on Mystery Shopper feedback, we recently wrote to procurement practitioners reiterating the need not to set burdensome financial conditions when awarding contracts. To ensure transparency, we regularly publish the outcomes of Mystery Shopper cases on the GOV.UK website.

    We continue to encourage better use of PQQs that follow the industry-standard wording set out in PAS 91. This has also been a ‘hot topic’ for our Mystery Shopper scheme. We worked with the British Standards Institute, and others from across industry, to further simplify that and the resultant PAS 91(2013) was published by BSI earlier this year.

    And our interventions have real life consequences. At the end of last year Mystery Shopper intervened on a late payment case to recover the money owed to an SME and helped prevent the firm from having to make a number of staff redundant.

    We are championing prompt payment and integration of the supply chain.

    As you ask, prompt payment to the supply chain is a key priority for us. We have pursued fair payment through the use of Project Bank Accounts or a contractual requirement for 30 day terms to be passed to sub-contractors.

    We are well on our way to exceeding our target of £2 billion of committed spend being contracted via Project Bank Accounts since their launch.

    We have actively supported closer integration of the supply chain. We have set up trial projects on adopting new models of procurement. These new models encourage Tier 1 contractors to build strategic partnerships down integrated supply chains. Innovation and value are important in that partnership.

    For example, the Integrated Project Insurance model by the MoD – this was originally proposed by the SME trade organisations Specialist Engineering Contractors’ Group and Specialist Engineering Alliance and embraces early contractor involvement and collaborative supply chain integration.

    All of this has made a real difference. Now, more SMEs are winning business with government. Direct SME spend has increased from £3.1 billion in 2009 to 2010 to £4.4 billion in 2011 to 2012, an increase of £1.3 billion over 2 years.

    But, the job isn’t over. We agree there’s more to be done.

    The government is already working on exploring the recommendations set out in Lord Young’s recent report on growing micro businesses. As part of this work, at the Number 10 SME event on 5 June, we announced that we intend to introduce reforms on procurement.

    What next?

    I feel there is real value to explore the transformation we have implemented in central government, in a wider public sector platform. Across the public sector, we all have a shared interest in spending money in a way that gets value for the taxpayer and supports business and growth. So there is merit in sharing our experience.

    I am particularly keen to work more closely with local government and partners to broaden the progress we have made, to drive forward substantial improvements in procurement practice across the public sector.

    Here’s how I see some of that happening:

    You talk about publication of data. We are currently looking at ways to make our central government pipelines more accessible and searchable, enabling companies to search for specific opportunities which are relevant to their expertise or region. We want to promote best practice in the publication and use of such pipelines to ensure new opportunities are transparent to SMEs working with local authorities. We are keen for local government and private sector clients to follow our example and publish their own pipelines, enabling a comprehensive picture of regional investment opportunities for SMEs.

    We are forging ahead with our transparency agenda with commitments to transparency of data and access to the right information for the right audience, including for procurement and performance related data. We would like to see more of this happening in the wider public sector.

    I want to strongly encourage SMEs to seek feedback from the procurement process they have undertaken and if they are having difficulty they should be encouraged to use the Mystery Shopper so we can follow up.

    We want to ensure that the opportunities to bid for new procurement frameworks are open to all, and we will continue to actively encourage consortia to bid in the procurement process.

    Lasting and sustainable transformation

    We will only achieve growth if we in government and the wider public sector really transform our approach to buying – placing more emphasis on early market engagement, and discovering the value for money and innovation that SMEs can offer.

    You are key influencers that can make this change happen.

    Over lunch, I want to hear from you what you are doing in your local authority/constituency to address the issues highlighted in this report. I want to listen to the problems you face and how you are working to solve them. I want to know what we can do further to make things better.

    Let’s build a momentum for collective progress. No one of us can achieve this alone, but with each of us playing our part, pulling in the same direction, we will succeed.