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  • Edward Timpson – 2013 Speech to NSPCC Conference

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    Below is the text of the speech made by Edward Timpson, the then Parliamentary Under Secretary of State for Children and Families, to the NSPCC Conference on 18 April 2013.

    Thanks, Maggie [Atkinson, Children’s Commissioner for England]. I’m very pleased to be here and grateful for the opportunity to contribute to your conference.

    As a champion of children living in fear and challenger to our collective conscience, the NSPCC has been a powerful force for good over the years. Your work to help victims of abuse and neglect through channels like ChildLine – which we’ve been pleased to support – has been especially valuable.

    It’s crucial that we give young people a stronger voice. Which is why, as Maggie has said, straight after this speech, I’ll be returning to Parliament to debate our clauses in committee on strengthening the role of the Office of the Children’s Commissioner in our Children and Families Bill.

    But, arguably, the NSPCC’s greatest impact has been through its unflinching mission to make us, as a society, confront what is still so often incredibly hard to face – the desperate plight of our most vulnerable children and the urgent need to do more to protect them. And the report being published today is no exception to this long and proud tradition.

    I’m encouraged by its findings that, in many ways, today’s children are safer, with child homicide and child deaths from assault and suicide down and a decline in some forms of maltreatment and abuse. I’m also encouraged by your acknowledgement that we’re on the right track, with child protection services working harder than ever to reduce harm, and getting smarter about doing so.

    But I agree that there’s much more we need to do – to better understand child abuse and neglect, to intervene earlier and with even greater impact.

    That’s why we’re fundamentally reforming the child protection system to put the needs of children at its heart – so the system fits in the needs of children and not the other way around.

    These reforms and the issues being discussed today could not be more timely. From shocking revelations about child sexual exploitation to alarm about the exposure of children to online pornography, child safety is higher than ever on the public agenda and in the public conscience.

    The never-ending revolution in technology, in particular, is, taking us into uncharted territory, with new opportunities opening up alongside new dangers.

    But while there’s no way we can put the digital genie back in the bottle, we can certainly do more to equip our children to stay safe. And, with toddlers manipulating iPads more confidently than their parents, it’s clear you can’t start too young.

    Which is why, primary school pupils will have the chance to learn about internet safety under our proposed changes to the National Curriculum. They’ll be taught how to communicate securely and responsibly online and how to keep their personal information private – essential skills in the information age.

    But, technology aside, it still very much remains the case that children are, sadly, most likely to come to harm at home and in the hands of someone they know.

    This, as we know, was the terrible fate of Peter Connelly, Victoria Climbie and Khyra Ishaq.

    In many of these instances – as we’ve also seen with victims of child sexual exploitation – the children’s cries for help went unheeded time and time again. They were met by indifference, disbelief and, in the worst instances, vilification from adults who should have been protecting them.

    And after every such tragic case, we hear the familiar refrain ‘never again’ – until the next time.

    Of course, we all know that we cannot completely eliminate risk. We should always be realistic about that.

    But there will always be a next time until we learn the fundamental lesson that a child’s needs (to be safe, to have their basic needs met, to be heard) must always come first.

    Ahead of the rights of abusive parents who are unable or unwilling to change their ways and ahead of adults wanting to escape criticism or any challenge to assumptions and work practices, however manifestly ineffective or outdated.

    Problems with the child protection system

    This is something that, over the years, many politicians and professionals have pledged to do, but, despite some good work, we know that there’s still far too much variation in child protection around the country.

    There are, of course, some highly effective examples of good practice, such as multi-agency safeguarding hubs, including the one I visited in Nottinghamshire. But, it’s clear that too many local authorities and other agencies are still failing to meet acceptable standards for safeguarding children – to look for and act on signs of abuse, to intervene early enough and remove children decisively in sometimes the most appalling of cases.

    Having lived and worked, for many years, with children damaged by neglect and abuse, I’ve seen, first-hand, what failure to act can mean – both in terms of the huge challenges these incredibly vulnerable children face and what it takes to turn lives around.

    Now, as you may know, I grew up with over 80 foster children and two adopted brothers. Many came from chaotic, troubled backgrounds. Their behaviour was, at times, extremely challenging to say the least. I’ve seen babies addicted to heroin go into spasms. I’ve watched on as an abused and deeply angry little boy shattered every pane of glass in my dad’s prized greenhouse because he didn’t know how else to let his anger out. And I became proficient in most swear words by the age of ten thanks to the foster children who parroted back to me what they had heard at home.

    But, over time, I saw how love, stability and routine helped them settle and thrive. And it became increasingly clear to me that many could have been spared immense suffering and long-term damage if they’d got consistent and reliable help earlier.

    I went on to become a family barrister often representing children in care; an experience that reinforced what I’d seen at home – that timely intervention still wasn’t happening anywhere near enough.

    By the time a case landed on my desk, the damage had, all too often, already been done, and it was a matter of trying to make the best of a bad job. It was apparent that cases were managed, all too often, for the convenience of adults rather than the interests of the child.

    So if we’re to seriously raise our game and do better at keeping children safe, it’s vital that we reverse this wrong-headed emphasis. That we re-focus on the child protection system where it should always be – on the needs of the individual child.

    What the Government is doing

    Our reforms are focused on doing just that.

    We’re implementing recommendations from Professor Eileen Munro’s valuable and widely-welcomed review of child protection; helping us move towards a much more child-centred system in which there’s a greater emphasis on early help, on identifying and tackling neglect and on multi-agency working – where possible, before formal intervention is needed.

    One of Professor Munro’s most important recommendations was the need for guidance on the core legal requirements on all professionals working to keep children safe.

    A clear framework within which professionals could exercise their expertise and judgement. And which spelled out what different agencies could expect from each other.

    Working Together

    We’ve delivered on this in the revised Working Together guidance, that Peter referred to, which has just come into force just this week. And we’re also producing an equivalent young person’s guide for the first time, with the Office of the Children’s Rights Director, to make sure we reach those whose needs are at its very heart.

    Crucially, the guidance emphasises that safeguarding is the responsibility of all professionals who work with children, reinforcing, once again, the importance of multi-agency working.

    As you know, Local Safeguarding Children’s Boards (LSCBs) are absolutely vital to driving this at a local level so that different services; police, health, education, social care, work closely together and properly share information.

    This is happening in a highly effective way in some parts of the country, such as Lancashire’s excellent Engage project – a multi-agency team that has been especially successful in tackling child sexual exploitation, whether that be better prevention techniques, bringing criminals to justice or supporting victims.

    I want us to do more to understand what works and why so we can spread best practice further through the LSCBs.

    Serious Case Reviews

    And when things do go wrong, we need to confront, honestly and openly, the mistakes that were made.

    As your study, last month, into neglect, showed, one of the most critical vehicles for learning lessons – good and bad – are Serious Case Reviews (SCR).

    Yet, until recently, all that was published were bland executive summaries. This certainly suited the adults who had made mistakes. But the price of sparing their blushes was paid by our most vulnerable children who were condemned to suffer from the same failings, over and over again, because we didn’t learn vital lessons.

    That’s why this Government has insisted on SCRs being made public. Some local authorities, such as Leicester, north Somerset and Nottinghamshire, have responded positively to our call for greater transparency and accountability.

    And we can see the benefits of publication beginning to be felt on the ground. In Southend, for example, findings drawn from SCRs triggered targeted, multi-agency audits of domestic abuse referrals to children’s social care. These audits identified that not enough was being done to engage with men in families, which had implications for children’s outcomes. So, training was introduced to raise awareness among practitioners and improve this engagement.

    Yet, despite their potential to drive improvements, the number of SCRs being published remains disappointingly low – around half (99) of the 181 SCRs started since June 2010 have been completed, but only 44 have been so far been published.

    This does show an increasing trend – 10 SCRs have already been published in the four months of this year compared to just seven for the whole of 2011. But too many SCRs still take too long to complete and too many are not published.

    We’re keen to see these numbers rise significantly. It’s why we’re establishing a new national panel of independent experts to scrutinise and advise on LSCB decisions not to initiate or publish SCRs. One of the big issues to emerge from published SCRs and which bedevils multi-agency working is the failure to share information effectively.

    Only yesterday, I met a council lead member for children’s services who was frustrated that many professionals still don’t know what facts they can share with other professionals about children at risk, often because of confusion about data protection rules – which is madness, when you consider that passing on the right information at the right time to the right organisation could quite literally mean the difference between life and death for a child in danger.

    The modified Working Together guidance addresses this issue head-on, making it clear that, where a vulnerable child is concerned, the presumption should be to share information.

    Health – information sharing

    It’s right to say that the health service’s track record in this area has been a notable source of frustration. It’s a common complaint from LSCB Chairs that the NHS has an abundance of information, but doesn’t necessarily share it with other agencies.

    So I’m pleased that my colleagues at Health are making moves to tackle this, with Dame Fiona Caldicott working on a statutory code of practice for information sharing.

    And in December, there was the launch of a new system to make child protection information available to NHS doctors and nurses who suspect abuse or neglect when treating children in emergencies and unscheduled care.

    The NHS Commissioning Board has also just published its accountability and assurance framework for safeguarding in the NHS, making it much easier for health professionals to understand what they need to do keep children safe.

    But what we’re really grappling with, when it comes to better information sharing and, indeed, refocusing the system on the needs of the child, is the need for a shift in attitudes and culture.

    Looking ahead

    Fundamental to this are our reforms to bolster the workforce and improve practice.

    Social workers do one of most critical, most demanding and, yes, potentially, most rewarding jobs in our society.

    Something apparent when I accompanied social workers on family visits in Halton, in the north west, a few weeks ago.

    One of the visits was to a family with four young children, in which the mother had learning difficulties and the father, mental health problems and suicidal tendencies. I was hugely impressed by the strong relationships and meaningful communication the social worker had established with the family.

    This meant that her direct, practical attempts to support the parents by, for example, attaching a checklist of small steps to follow on the fridge, really hit home, rather than just eliciting platitudes that change nothing. I was also struck by the high morale and signs of strong leadership I saw when visiting the council offices. I was particularly interested to hear about a case file audit system they’d introduced, that had initially been greeted with unease by social workers, but had now been embraced it as a useful tool to motivate staff and manage performance.

    This is just the kind of positive approach I’d like to see spread more widely – a commitment to self-improvement where professionals are not afraid to challenge one another.

    And our reforms to provide greater leadership and support to the profession should go a long way towards this.

    We’re appointing a chief social worker to lead the debate nationally about reform and ensure the profession has a strong voice at a national level.

    Locally, each council is appointing a principal child and family social worker to lead on standards of practice and on learning locally. We’ve also set up the College of Social Work, a Step up to Social Work programme, and initiated a strengthened Ofsted inspection framework. And we’re keen to do for social work what has been done for teaching through TeachFirst.

    Which is why we’re so supportive of Frontline, a brilliant idea by a TeachFirst Graduate, to get talented, committed graduates into social work.

    I’m hopeful that we can get it up and running so some of our brightest and most committed graduates can start making a difference to our most vulnerable children and provide a welcome boost to the profession.

    Conclusion

    It’s by investing in people working on the frontline in this way that, I believe, gives us the best chance of driving the decisive shift in culture that’s needed to truly put children’s needs at the heart of the child protection system.

    There’s little doubt that the fight against child cruelty continues to challenge and test us as a society as no other issue.

    Even in our supposedly cynical age, we’re shocked by the extreme violation visited on the victims of child sexual exploitation. We worry about new threats to our children online.

    Thankfully, as your report recognises, we’re making good progress towards keeping children safer, but it’s clear we need to do more to intervene earlier and more effectively, especially in a technological landscape that’s rapidly changing.

    As I’ve just outlined, our overhaul of child protection and social work and proposals to put internet safety on the National Curriculum aim to do just that.

    There’s nothing more important than protecting children from harm. Where children are suffering abuse or neglect they should be taken into care more quickly.

    By re-focusing the system on children’s needs through our reforms, we’ll help ensure that each child gets the right support at the right time. And key to such timely intervention is the need to listen to the children and young people involved.

    This message emerges loud and clear, time and time again, from the children who contributed to Professor Munro’s review, from the victims of child sexual exploitation and from the many letters I receive from young people.

    As one of the older children interviewed for Professor Munro’s review said: ‘You’ve left me for too long.’

    It’s, sadly, a plea that many vulnerable children would echo; starkly illustrating the uphill struggle they face in getting their voices heard and getting the timely help they so desperately need.

    It’s only when young people no longer feel the need to make these pleas, that we can honestly say that we’re making the leap required of us – to properly protect them from harm and to reduce our chances of having to say ‘never again’ in years to come.

    Thank you.

  • George Osborne – 2013 Speech at Currency Paper Launch

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    Below is the text of the speech made by George Osborne, the Chancellor of the Exchequer, on 23 April 2013.

    In seventeen months Scotland will decide whether or not to end over three hundred years of partnership with the other nations within the United Kingdom.

    As decisions go, they don’t come much bigger.

    This isn’t a decision for the UK Government or me to take.

    It’s a choice for people living in Scotland.

    The UK Government is today publishing an in depth economic paper; the first of a series about the economic implications of Scottish independence.

    With this, and future Scotland analysis publications, the UK Government wants to inform the debate and help people to make up their own mind.

    The paper deals with one of the most important decisions that would face a separate Scotland – how to arrange its currency and wider monetary and fiscal affairs.

    This analysis has been prepared by Treasury civil servants, which is why I’m speaking to you today.

    Their analysis shows that the current arrangements of a full, monetary, fiscal and political union bring economic benefits to all parts of the UK.

    Breaking up that union would represent a fundamental change, and confront an independent Scottish state with difficult choices about what to put in its place.

    The paper provides evidence of how the United Kingdom benefits from being a deeply integrated single domestic market.

    We trade together – Scotland exports to the rest of the UK nearly a third of everything it produces.

    We do business together – nearly one in five private sector jobs in Scotland is for business based elsewhere in the UK.

    We work together – each year over forty thousand people move across the border in each direction to live and work.

    It’s not surprising then that Scotland’s economy is so closely aligned with the rest of the UK and its interests so inextricably linked.

    So the analysis makes clear the value of being able to fully co-ordinate our monetary, fiscal, and financial stability policies.

    Such co-ordination allows us to:

    our central bank, the Bank of England, to set interest rates to suit conditions throughout the UK and to have the ability to step in rapidly to stabilize our financial system when the need arises;
    take advantage of the UK’s ability to borrow in its own currency and credibility and track record with the international financial markets – built up over many, many years – to access cheaper financing;
    leverage the UK’s large and diverse tax base of thirty million individual taxpayers and nearly two million registered businesses to ensure when times are tough there is the fiscal firepower to ensure resources go to wherever in the UK they are needed most.
    As the Scottish Government’s own Fiscal Commission puts it:

    Retaining a common currency would promote the single market and help facilitate trade and investment to and from the rest of the UK and elsewhere.

    And the Commission is right on this point.

    Who would conclude the answer to today’s economic and financial challenges is to:

    – erect barriers between you and your most important trading partner;

    – accept a premium on the cost of borrowing when money is tight;

    – and conduct your business in two different currencies, across fluctuating exchange rates, when currently you don’t have to – with all the additional costs involved?

    The Treasury paper identifies four potential alternative models from which a separate Scottish state could pick its currency and monetary arrangements.

    All are a profound change from the pound we have today.

    An independent Scotland could:

    – adopt the pound unilaterally, just as Panama uses the US dollar;

    – seek a formal agreement, like the Eurozone have with each other, to form a sterling currency zone with England, Wales and Northern Ireland in the continuing UK;

    – agree to adopt the euro itself;

    – or introduce a new Scottish currency.

    And the analysis is clear: all of these alternative currency arrangements are less suitable economically than what we have now – for both Scotland and for the rest of the UK.

    Scottish Government Ministers have made it clear they want an independent Scotland to keep the pound, the Bank of England and to enter a formal currency union with the rest of the UK.

    The Treasury paper cautions that a formal currency union between two completely separate countries is not the same thing as keeping the pound we have now.

    First, financial markets would need to be convinced such a union was built to last.

    A durable currency union between two separate countries requires very strong and credible political commitment. The very opposite of what the SNP is proposing with its determination to break the political ties with the rest of the UK.

    But the lesson from the Euro is stark – they want to weaken the political ties in a dramatic way.

    Monetary union without close fiscal and political integration is extremely hard to sustain.

    That’s why the Euro area is having to reform its institutions, as the original measures to maintain budgetary discipline of its member states proved inadequate.

    Countries with the euro now have to:

    – submit their budget plans to Brussels alongside their own national parliaments;

    – commit by the Fiscal Compact to keep budgets balanced or in surplus;

    – and face the prospect of sanctions if they run excessive deficits and fail to take effective action to cope with them.

    And that’s not all.

    You only have to look at the problems facing smaller members of the euro area such as Portugal, Ireland and Greece. The most recent reminder of how difficult things can become are the events in Cyprus.

    Cypriot authorities have had to put in place temporary capital controls.

    This wouldn’t happen within the US or within the UK.

    And the Treasury paper cites the example of the last two nations to try to form a currency union following separation – Slovakia and the Czech Republic.

    Their union fell apart after only thirty-three days as capital flowed from one to the other as investors and savers sought what they saw as a safer haven for their funds.

    So the challenges for establishing a formal currency union between Scotland and the remaining UK are not hard to imagine.

    The political commitment to maintaining the currency union would be tested daily in the financial markets; particularly if there was any hint of that currency union being a temporary arrangement – a real possibility if an independent Scotland was committed as a condition of EU membership to join the Euro at some point.

    Indeed the Scottish Government’s own Fiscal Commission talks only of retaining sterling “immediately post-independence” and of how its proposed framework was “designed to be flexible” should Scotland’s economic conditions change post-independence.

    Instead of talking up the strength and permanence of currency union, they are talking up the flexibility and short-lived nature of it.

    Second, the Treasury analysis suggests that an independent Scottish state would have to accept significant policy constraints, even if the financial markets could be convinced of both countries’ commitment to maintain for the long-term a formal currency union.

    Monetary policy set by the Bank of England in such a union would over time become less and less suitable for both countries, as tax and spending policies diverge.

    Tax and spending would therefore need to take more of the strain to stabilize the Scottish economy in the face of economic shocks.

    And the paper suggests that an independent Scotland would be more exposed than the UK to volatile revenues from oil and gas, and a large banking sector relative to the size of the Scottish economy.

    Today in the UK we pool our tax resources – a common insurance policy where all pay their share of the premium.

    We are able to transfer funds to help areas of the country adjust to economic shocks.

    A co-ordinated UK response is automatic.

    Such arrangements couldn’t simply be translated into a currency union of two separate countries.

    An independent Scotland would have to agree its tax and spending plans with what would become a foreign government.

    So the big contradiction is that those proposing separation are campaigning to “bring powers home” with one hand, while planning to give them away with the other.

    Third, there is no guarantee that the terms of a formal currency union could be agreed between an independent Scotland and the rest of the UK.

    There are no modern examples of a successful formal currency union between two countries of such unequal size.

    There are currently seventeen members of the euro area.

    The largest member – Germany – represents just less than thirty per cent of the GDP of the euro area as a whole, a sterling currency union would be much more imbalanced.

    The continuing UK would comprise around ninety per cent of the total GDP in a sterling currency union with an independent Scotland.

    Some have quoted the example of the Belgium-Luxembourg economic union, two countries with a similar difference in size.

    But both countries kept separate currencies.

    Luxembourg effectively ceded all control of monetary policy to the Belgian central bank.

    And the monetary association nearly failed in the early 1980s when Luxembourg made plans to make the Luxembourg franc independent.

    So let’s be clear: abandoning current arrangements would represent a very deep dive indeed into uncharted waters.

    Would a newly independent Scottish state be prepared to accept significant limits to its economic sovereignty?

    To submitting its budgetary plans to Westminster before Holyrood.

    To constrain the degree of tax competition between Scotland and the rest of the UK.

    To accept some continuing oversight by UK authorities of its public finances.

    And what is the economic case for the remaining UK?

    The Treasury analysis suggests that the answers are not clear.

    Of course there could be some benefits for the rest of the UK in keeping the same currency as an independent Scotland using the pound, but it would also create significant economic risks.

    However, the imperative to agree to a formal currency union would not be as strong for the rest of the UK as for Scotland.

    While around 30 per cent of total Scottish output is exported to the rest of the UK, the rest of the UK relies on exports to Scotland for less than 5 per cent of its total output.

    The benefits of this trade would need to be judged against the imbalance within the sterling currency union of exposure to economic and financial risk.

    The rest of the UK – as the larger economy – would be much more exposed to the risk of an independent Scotland running into fiscal and financial difficulties.

    As Professor John Kay – formerly a member of the Scottish Government’s Council of Economic Advisers – has put it:

    It is easy to see why the rest of the UK, representing 91.5% of a monetary union, might seek oversight of the economic affairs of Scotland, representing 8.5% of the same union. It is more difficult to see why the rest of the UK representing 91.5% of a monetary union should concede oversight of its policies to Scotland, representing 8.5% of the union.

    The fundamental political question this analysis provokes is this.

    Why would fifty-eight million citizens give away some of their sovereignty over monetary and potentially other economic policies to five million people in another state?

    Before the rest of the UK could ever agree to enter a formal currency union, any future UK Chancellor of the Exchequer at the time of independence would have to provide the British people with a clear and compelling answer to this question of sovereignty.

    The SNP asserts that it would be in everyone’s interests for an independent Scotland to keep the pound as part of a Eurozone-style sterling zone.

    But the Treasury analysis we are publishing today shows that this is not the case.

    Let’s stop speculating – and look at the evidence: would the rest of the UK family agree to take that risk?

    Could a situation where an independent Scotland and the rest of the UK share the pound and the Bank of England be made to work?

    Frankly, it’s unlikely, because there is real doubt around the answers to these questions.

    In other words, the only way to be sure of keeping the pound as Scotland’s currency is to stay in the UK.

    The Treasury paper also discusses other alternatives open to an independent Scottish state if it proves impossible to agree a formal currency union with the rest of the UK.

    It could continue to use the pound without the rest of the UK’s agreement.

    However, to do so would leave an independent Scotland with no control over its own monetary policy.

    The Bank of England would continue to set interest rates – but without any regard for conditions in Scotland.

    And with no ability to print money, a Scottish monetary authority could only play a very limited role as a ‘lender of last resort’ to Scottish commercial banks.

    In this scenario an independent Scotland would be faced with severe monetary and fiscal constraints.

    Some small countries have adopted this approach.

    Montenegro uses the euro.

    Panama the US dollar.

    But, both the Scottish Government’s Fiscal Commission and the Treasury’s analysis conclude that this option would not be appropriate for a country of Scotland’s economic size and complexity.

    Another option is that Scotland could apply to join the euro area.

    Indeed, it may well have to as part of conditions for EU membership.

    But this would mean losing the pound, imposing new transaction costs on Scottish businesses’ trade with their largest market – the rest of the UK.

    And the Scottish economy differs significantly from the euro area.

    It is certainly less well integrated with the EU than with the UK as a whole.

    The policies of the European Central Bank would therefore be less well suited to conditions in Scotland than those currently pursued by the Bank of England.

    And an independent Scotland would face the same constraints designed to ensure the eurozone’s stability as its other smaller members.

    Finally it could introduce a new independent Scottish currency.

    An attractive option for many as it’s the only one where an independent Scotland would not have to give up control over some or all of the economic levers at its disposal.

    However, the Treasury analysis shows that this freedom would come at a cost.

    The transition costs of establishing a new central bank and to replace the pound coins and notes currently in circulation;

    The risk that capital could flow out of Scotland if Scottish residents preferred to hold their assets in an established currency, with the need as a result for capital controls in the transition period;

    The higher transaction costs of doing business with all of Scotland’s trading partners – particularly the UK;

    And the risks of a volatile exchange rate deterring long-term transactions and investment.

    So the analysis concludes that in comparison to current arrangements the benefits of an independent monetary policy are unlikely to outweigh these costs.

    The conclusion is clear.

    The pound we share works well.

    The saying goes,

    If it ain’t broke why fix it?

    But I say –

    if it ain’t broke don’t break it.

    The alternatives to the way Scotland now uses the pound are second best.

    Is second best really good enough for Scotland?

    I want the best for Scotland and for all our United Kingdom.

    We’re better together.

  • Chloe Smith – 2013 Speech at Infosec

    chloesmith

    Below is the text of the speech made by Chloe Smith, the then Economic Secretary to the Treasury, at Earl’s Court in London on 23 April 2013.

    Introduction

    Many thanks to the organisers for inviting me to give the keynote address. I know that this is a well-respected event by the sheer numbers of exhibitors and the investment you’ve made to be here.

    It is heartening to see that this sector is thriving and that there is so much innovation and vitality in this field. With so many global and UK companies represented it is clear that the UK has an important role in this growing sector. Today, I would like to share with you some of the steps we are taking to raise the profile of cyber threats and generate demand for more and better cyber security products and services.

    Firstly though I would like to give you a brief overview of our UK Cyber Security Strategy and objectives.

    The threat

    In 2010, when this government first came into power, the Strategic Defence and Security Review determined that cyber attacks were one of the top four threats to our national security. This is still the case today.

    Cyber threats come from a variety of sources but we broadly categorise them as emanating from state-sponsored actors, hacktivists or cyber criminals. The motivations for attacks vary from ideological, political or fanatical, to financial.

    I don’t need to tell this audience that almost every day there is a news story about an organisation being ‘hacked’ or individuals being defrauded by online criminals in new and ever more sinister ways.

    And government is faced with these threats on a daily basis. On average over 33,000 malicious emails are blocked at the Gateway to the Government Secure Intranet every month. These are likely to contain – or link to – sophisticated malware, often sent by highly capable cyber criminals and state sponsored groups. A far greater number of malicious emails and spam, but less sophisticated emails and spam are blocked each month.

    Strategy and objectives

    So what is government doing to help protect UK interests in cyberspace? In 2011, we produced our UK Cyber Security Strategy, setting out 4 clear objectives:

    We must make the UK one of the most secure places in the world to do business in cyberspace

    We must make the UK more resilient to cyber attack and better able to protect our interests in cyberspace

    We must help shape an open, vibrant and stable cyberspace that supports open societies

    We must build the UK’s cyber security knowledge, skills and capability.

    £650 million of investment over 4 years has been put in place; in of course one of the tightest fiscal environments government has ever seen. This underlines the importance we place on cyber security.

    In December last year we reported on progress against the strategy and the work being carried out under the National Cyber Security Programme as well as our forward plans. This covers all the objectives I’ve outlined in terms of enhancing skills, research and education, policing and tackling cyber crime, international engagement and capacity building, new measures to help protect the UK industry as well as the Critical National Infrastructure. Information on all these efforts can be found on GOV.UK and we will be reporting back again to parliament again at the end of this year.

    Making the UK a safer place to do business

    Objective 1 of the strategy relates to the need to protect and fuel UK business interests and is what I would like to focus attention on today.

    Industry is by far the biggest victim of cyber threats. We have stated before that cyber crime, ranging from IP theft to cyber espionage to online fraud, is costing the UK economy billions of pounds a year. And as businesses and government move more of their operations online, the scope of potential targets will continue to grow.

    Later today David Willetts, the BIS Minister, will be releasing the 2013 Cyber Security Breach survey results. The statistics are very revealing and provide us with the insight we need to determine how and where we direct resources to support UK industry.

    In particular response to this, we are launching today new guidance for SMEs on how to protect themselves from cyber threats. In addition, we are announcing a new Innovation Voucher Scheme for small businesses through the Technology Strategy Board. An Innovation Voucher provides companies with a grant to work with a supplier for the first time and should be invested in an idea or problem that is a challenge for the business and for which specialist support is required. The cyber security element of this scheme will fund 100 companies with Innovation Vouchers of up to £5000 each.

    Across government then we are working hard to raise awareness of cyber security throughout industry and ensuring that the right incentives are in place for industry to take responsibility for securing their own interests. But where government can help, we will.

    For example, at the end of March, Francis Maude launched a ground-breaking partnership between government and industry – the CISP (Cyber Security Information Sharing Partnership). The scheme currently involves 160 companies allied with government to share information and intelligence in ‘real-time’ on cyber threats to UK companies and how to mitigate them. As part of this we have set up a ‘Fusion cell’, funded by the National Cyber Security Programme, which brings together experts from the security services, law enforcement and industry to work together to address cyber threats in a trusted environment. The ultimate aim is to extend this scheme beyond CNI (Critical National Infrastructure) companies and eventually to include SMEs.

    Raising awareness in industry

    We are working to create better awareness of the threat throughout both the public and private sectors; this is to help drive informed demand at the very highest levels within organisations to ensure that their key information assets are well-protected.

    To this end we have been giving advice and guidance to businesses. Last September, for the first time amalgamated advice from the Cabinet Office, the Security Services and BIS was delivered to an audience of 200 Board-level directors of FTSE companies. The “Ten Steps to Cyber Security” booklet has been well-received to such an extent that in January this year at Davos, the World Economic Forum cited it as an example of best practice. Copies of the booklet are available on the CESG stand here today andit is also available on .gov.uk

    The Cyber Security Sector

    As we are successful in raising cyber security standards across the private sector, growth in demand for products and services to support this should follow.

    So we are putting in place the right environment for a vibrant and self-sustaining cyber security market-place of good UK based cyber security providers.

    We are determined to help seize the business opportunities in cyber, promoting the UK cyber security industry both domestically and across the globe.

    Cyber security represents an opportunity for the UK – both for companies where cyber is core to their business and for companies across all areas of the economy who need to develop a competitive edge through demonstrating that they handle information responsibly and protect the details of those they do business with. We have every reason to believe that UK firms are well placed to capitalise on this growing market.

    The UK has history of being innovators in technology and in technical areas such as cryptography which is maintained to this day in our universities. We know how to implement this as our ongoing strengths here underpin our cutting edge position in areas such as online commerce and banking. Undeniably, there is a massive growth potential for UK businesses and innovators to do very well in the cyber security sector.

    SMEs

    Making a difference often relies on the forging of new partnerships – not necessarily between government and industry but business to business. A good example of this is an SME in Malvern, called IASME, a small business that has developed a cyber security standard specifically for SMEs. IASME has partnered with a local insurance provider (Sutcliffe and Co) underwritten by AIG to offer reduced premiums to those companies that are assured against the IASME standard. This approach is helping to grow these two small businesses, offering an innovative approach to cyber risk management, as well as growing the cyber security market in the local area. Linked to this is a series of awareness-raising events that IASME are holding around the UK for SMEs to introduce them to cyber risk and promote this insurance offering: quite impressive stuff for a micro-business. We applaud this approach and BIS is also contributing to these ‘roadshows’ to offer the government view and present on HMG is doing to stimulate supply and demand for cyber security.

    Standards

    And to help more companies demonstrate that they are cyber savvy we are also bringing clarity to the broader standards landscape helping companies identify the best of the standards that exist in the marketplace and to protect organisations against cyber attacks.

    GCHQ and BIS have drawn up, in partnership with industry, a series of requirements for what a good organisational standard for cyber security would look like. We are relying here on market support and industry telling us what their preferred standard is and how it aligns with the requirements.

    Sector growth

    At the last count, there are around 2380 UK companies in the cyber security sector which equates to 21 % of all UK security companies. In total, these companies support well over 26,000 jobs – currently 16% of all UK security employment. According to a UK Security Sector Report, UK Cyber Security sales amounted to £3.8bn with UK exports of £800m. Cyber security global growth is forecast over the next four years to be over twice that of the security sector as a whole as economic constraints bite in traditional defence and security markets. So it is clear that this is a growth sector and one which we should encourage and nurture.

    The Cyber Growth Partnership

    To this end, we have launched a new Cyber Growth Partnership, led by BIS and Intellect, the ICT representative organisation, representing over 850 large and small technology organisations. Central to this will be a high level group which will identify how to support the growth of the UK Cyber security industry, with an emphasis on exports. It will also help identify what currently stops the cyber security sector from growing, with a particular emphasis on SMEs and boosting their market potential.

    The first meeting of this group took place last month. The main outcome of the meeting was an agreement with industry on the practical steps they needed the government to take to support export growth. For example we are looking at ways in which those businesses which government has procured cyber security products from can promote the fact that they are an HMG supplier to their prospective customers overseas.

    We also discussed how industry and government can work together to ensure that the right inputs such as skills, R&D and funding are available to support growth.

    It is early in the life of the group and we are keen that we don’t lose momentum – however the indications are that this group can play an important role in addressing issues that impact on sector growth.

    Skills and research

    The ideas for skills and research we discussed as part of the cyber growth partnership are focussed on what we can and have to do in the future.

    Through the National Cyber Security Programme we are investing in skills research and training. Last week two new Centres for Doctoral Training in Cyber Security were established within UK universities to bring people with the right skills and knowledge into the cyber security field. The CDTs will provide broad training focused exclusively on cyber security and engage with industry to ensure that this training reflects the complex and dynamic nature of cyber threats. This is in addition to funding for Academic Centres of Excellence in Cyber Security status to 11 UK universities and 3 new Research Institutes.

    We are also taking steps to improve cyber security skills among young people and to widen the pipeline of talent coming into this field. e-Skills UK is developing interactive learning materials on cyber security for GCSE and A-level students. We expect these materials to be available to schools from September 2013.

    At the end of last year, GCHQ and the other Intelligence Agencies launched a new technical apprenticeship scheme which aims to identify and develop talent in school and university age students. They aim to recruit up to 100 apprentices who will be enrolled on a tailored two-year Foundation Degree course. We also sponsor the Cyber Security Challenge UK in its work providing advice, support and guidance for anyone interested in a career in cyber security, and we want to create opportunities for employers and previously unidentified talent to come together. Since its launch in 2010, over 10,000 people have registered with the initiative.

    GCHQ has also established a set of certification schemes to improve the skills and availability of cyber security professionals. The Certification for Information Assurance Professionals scheme will help Government and Industry to recruit cyber security professionals with the right skills at the right level, and into the right jobs. It will also assist participants to build a career path and to have the opportunity to progress through re-assessment as skills and experience grow.

    All this will take time to filter through but we are putting in place the right processes to achieve increase the numbers of skilled people needed to help protect UK business.

    Conclusion

    In conclusion, cyber threats are an increasing challenge for UK businesses but they also present many exciting opportunities as well. We are making every effort to address the threats through improving our ability to detect and defend UK interests in cyberspace. We have to work with you, with UK businesses to help this growing sector to thrive. We want to work with industry through real and meaningful partnerships to ensure that UK businesses capitalise from this growing demand for the benefit of the UK as a whole.

  • Stephen Hammond – 2013 Speech at the Institution of Civil Engineers

    stephenhammond

    Below is the text of the speech made by Stephen Hammond, the then Parliamentary Under Secretary of State for Transport, at the Institution of Civil Engineers on 18 June 2013.

    Transport is crucial to everything we do; getting food to the shops, products to market, people to jobs. When transport slows everything slows and when it stops everything stops so good transport is essential to drive sustainable economic growth, prosperity for all and to make Britain a great place to live.

    Transport is central to the coalition strategy to growth, helping UK businesses to be more productive, rebalancing our economy and enabling the UK to compete in the global race. That’s why we have invested in transport infrastructure in all parts of our country from targeted improvements to our networks, transformation investments for future generations.

    We also recognize that we face challenges many of which as civil engineers the ICE members will be grappling with today and in the future; how to meet rising demand for mobility, how to reduce costs whilst improving services, how to mitigate the impact of transport, how to embrace technological change and how to expand networks whilst also making them more efficient?

    Government cannot overcome challenges alone. We need to continue our discussion with industry, academics and wider society to secure that the transport infrastructure that the UK needs and deserves. The ICE ‘State of the nation’ report is an informed and useful contribution to this on going debate.

  • William Hague – 2013 Press Conference with French Foreign Minister

    williamhague

    Below is the text of the press conference with William Hague, the then Foreign Secretary, and Laurent Fabius, the then French Foreign Minister, on 21 August 2013.

    Thank you very much indeed, Laurent. Good evening, ladies and gentlemen.

    It’s a huge pleasure to be here with Laurent Fabius tonight and I’m grateful for his invitation to have these discussions here and I pay tribute to him and to the close work that we do together across a whole range of international issues.

    I think the Foreign and Defence policy cooperation between France and the United Kingdom is as close as it has ever been at any point in our history and that’s something we strongly believe in in the British government. It’s true in our cooperation not only on the subjects that Laurent has mentioned tonight, but also on preventing nuclear proliferation. We work closely together on issues such as Iran’s nuclear programme. On issues in Africa where I pay tribute to the work of the French government on Mali, helping to bring stability to Mali and the surrounding area where we have supported France’s initiatives just as they supported our initiatives on Somalia at the other end of Africa.

    So, we work closely together but foremost in our minds today as you have heard is the situation in various parts of the Middle-East: we have heard about a terrible act in Syria which may have involved the deaths of many hundreds, possibly as you have heard, more than a thousand people. Of course, the facts of this are still coming in. The reports of this are still coming in.

    But the United Kingdom and France called immediately for an urgent meeting of the Security Council that is about to take place; and we hope that the UN team in Damascus will be given immediate access to this area, unrestricted access to try to establish the truth. There is no reason for them not to be given access to an area not many miles from where they are doing their work now on the North East side of Damascus. This is where these events have taken place. So I hope the other members of the Security Council will join us in pressing strongly for that and I hope this will wake up some who have supported the Assad regime to realize its murderous and barbaric nature: a government that cares so little for the lives of the people of its own country.

    We’ve also been working hard today as you have heard in Brussels on the situation in Egypt, where we have agreed a good position with all of our EU colleagues. That is a position that supports democratic institutions in Egypt rather than individuals or parties and that is why we’ve condemned disproportionate violence from security forces, but also condemned attacks on churches and hospitals by those opposed to the authorities and it is why we support political dialogue in Egypt and we left the door open for European countries and the European Union to support that dialogue in the future.

    And of course, we want to keep faith with the great majority of people in Egypt who simply want a stable, prosperous, and free future. And so, we will continue to assist those people and not do anything that harms the people of Egypt as they try to bring about a better future for their country.

    So, this is what we have been discussing today and some of the things we will discuss tonight, and I’m grateful as always for the strong cooperation of Laurent Fabius and his team here.

    Thank you.

  • Nick Clegg – 2013 Speech on Modern Families

    nickclegg

    Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, on 2 September 2013.

    Every weekday morning, across the UK, there’s an army of mums, dads, grandparents and carers cajoling young children to “Hurry up and get ready for their day!”

    Many of these families are feeling the squeeze. They’re doing what they can to juggle their busy lives. And, now more than ever, one of the biggest things that could help them out is better access to more affordable high-quality childcare. That’s why I’ve made childcare one of my main priorities in government. And whenever money has become available I’ve pushed hard for it to be invested in this area.

    Last month, the government launched its consultation on our newest offer that will help more of Britain’s working families. This means that from 2015, if your family doesn’t receive support through tax credits or Universal Credit, but both parents are working, or you’re a lone working parent, the government will provide 20% of your childcare costs up to a cost of £6,000, per child, per year. That’s the equivalent of up to £1,200 per child, per year.

    And from 2016, if you’re a lone parent or couple in work, who pays income tax and relies on Universal Credit to make childcare affordable, or even possible, we’re investing an extra £200 million to increase the contribution we give to your childcare costs from 70% to 85%. This could help out around 200,000 families.

    Of course, there has been controversy about which families are eligible for these offers. But that doesn’t detract from the fact that this is a substantial package of support that will help ease the pressure for millions of families across the country.

    And today I want to talk about what we’re doing, step by step, in the coalition government to help every British family balance the demands of their lives with children.

    One of the first decisions our government took was to increase the hours of funded early education available for every family with a 3 and 4 year old from 12.5 to 15 hours a week.

    And today I’m pleased to mark our next step on this path to affordable, accessible childcare; launching the government’s latest free childcare offer for 2 year olds.

    From today, if you’re a parent on a low income with a 2 year old in the family your child will qualify for 15 hours a week of free early years’ education.

    Any childcare and early learning provider – that’s nursery, preschool or childminder – rated outstanding or good by Ofsted can provide places. These funded places are focused on helping the families that need them most. That’s around 130,000 2 year olds – 1 in every 5.

    We are investing over £500 million this year. And have distributed £100 million to local authorities to create new places to ensure those children eligible right now can benefit from these funded places from today.

    The households, which qualify are those that meet the same eligibility requirements as for free school meals. If that’s you, or you think it might be, your local authority is there to help you. They will confirm if you’re eligible and can help you take up a place for your child.

    And we’ve also made this support available to 2 year olds, who are looked after by their local authorities. So that they too can benefit from the great start this valuable early learning support provides.

    And from this time next year, we want to extend that helping hand even further.

    Our investment will increase to £760 million to help another 130,000 children, whose families are on the next rung of the income ladder.

    In total, that will mean extra places for around 40% of families with 2 year olds. And today, I am pleased to confirm that this will be working families, who earn under £16,190 a year and rely on working tax credits. The 40% most feeling the squeeze.

    This support will also be there to help children, who have been adopted, are in care, or have a disability or special educational needs.

    And I want to thank all of those local authorities and early year’s education providers working hard across England, to ensure that the children who qualify right now can access their place from day one.

    I’m delighted at the response we’ve had so far from nurseries and child-minders in preparing these extra places and promoting this offer to parents.

    These people are amongst those you rely on the most when your children are young. And the coalition government has been working with providers to reduce paperwork, improve quality and increase routes into this sector. So that when you drop your child off at nursery, preschool, or their child-minder you know they’ll get the best early learning, care and support possible throughout their day.

    I know that some of you will be thinking…why not give this free support to every 2 year old? Why not help every family? And it is certainly my long-term ambition to extend free support to all 2 year olds. But the fact is that at a time of limited resources you’ve got to start somewhere. And for me, it’s better for us to start with those children, who can benefit most from high-quality early year’s education, but who too often miss out.

    All the evidence shows that if you take 2 young children – hanging up their coats next to each other on the first day of school – the poorer child will already be behind their better-off classmate. And if we don’t step in to help these children, that gap just keeps getting bigger. We’re talking about a child’s journey through life already being mapped out for them before they’ve even set foot in a classroom.

    Well-off children are more likely to become well-off adults. Poorer children are more likely to stay poor. And not only do these children suffer. The whole class suffers, as teachers have to focus more of their efforts on children frustrated and left behind through no fault of their own.

    As a Liberal, I believe that every British family, whatever its structure, background and circumstances, should be able to get on in life. And that the role of government should be to support, not control, our families. To make their choices possible, not to dictate their choices.

    It’s not for us to tell you whether you should stay at home or not. You have to decide what’s best for your family. And the modern British family comes in all shapes and sizes. But it is government’s responsibility to help those families feeling the squeeze; those who find it hard to meet their childcare costs.

    That’s why in government, we’re doing everything we can to reform, simplify and modernise those parts of the system that are making it harder for your families to realise their ambitions.

    From day one in government, we’ve worked with the belief that if modern families no longer fit the system, then it’s the outdated system that needs to change. That’s why from next year, we’re extending the right to request flexible working to every employee. So that the vital back up team of grandparents, family members and friends who would love to do more to help you out now can. And from 2015, if you’re a new parent you’ll also have greater freedom and flexibility to use and share leave during the maternity leave period in a way that works for you.

    Now, of course, this doesn’t mean that we can put off the tough decisions we need to take to get the massive deficit we inherited under control. But what you can be sure of is that the choices we make will be rooted in evidence and focusing investment where it can help your families most.

    The crucial question every parent asks when weighing up whether to work, or take on extra hours is: how much of my earnings will I keep after costs like tax, childcare, travel and so on? That’s why we’re designing the system to ensure that families get to keep more of what they earn and that work pays.

    It’s why we’ve committed to raise the personal allowance on income tax. So that basic rate taxpayers will get to keep all of the first £10,000 they earn. We’ve already taken over 2 million people out of paying income tax altogether. And by the time these changes are complete, they will be worth around £700 a year for 20 million basic rate taxpayers.

    We believe this is a better way to help your family. To put this money back in your pocket for you to spend on what you know can help your family best, rather than have the government decide that for you.

    And alongside our additional childcare investment in Universal Credit, I’ve also fought hard to ensure that the system no longer penalises those parents who want to go back to work, but can only work less than 16 hours. Securing £200 million of investment that will benefit an extra 100,000 low-income families.

    Previously, these parents knew that if they worked less than 16 hours a week, they would lose their existing benefits from day one, but not qualify for any additional support through the tax-credit system. This left them in the ridiculous position of knowing that their families would be worse off despite them working the hours they could. Now they know that the work they do will always pay.

    Within government, it will always be one of my biggest priorities to ensure that when both you and your children set out to achieve your ambitions, the choices available to you are greater, the sums add up a little easier and that, at every step of this road, our government is working hard to build a stronger economy and fairer society in Britain. A Britain fit for modern families.

  • Nick Clegg – 2013 Q&A on Syria

    nickclegg

    Below is the text of the speech made by Nick Clegg, the then Deputy Prime Minister, on 27 August 2013.

    Question

    Why are we now considering military action?

    Deputy Prime Minister

    I think many people who’ve been watching this horrific bloodshed unfold in Syria over the last couple of years will ask themselves why it is that the international community, why is France, America, Britain, considering a serious response to what has happened in Syria. The answer is that the murder of innocent men, women and children through the use of chemical weapons is a repugnant crime and a flagrant abuse of international law. And if we stand idly by we set a very dangerous precedent indeed, where brutal dictators and brutal rulers will feel they can get away with using chemical weapons on a larger and larger scale in the future. These are weapons that were used on a large scale in the First World War and banned back in the 1920s. So what we’re considering is a serious response to that.

    What we are not considering is regime change, trying to topple the Assad regime, trying to settle the civil war in Syria one way or another. That needs to be settled through a political process. We are not considering an open-ended military intervention with boots on the ground like we saw in Iraq. What is being considered are measures which are legal, which are proportionate and which are specific to discouraging and sending out a clear signal that use of chemical weapons in this day and age is simply intolerable.

    Question

    How confident are you that it will be legal?

    Deputy Prime Minister

    Well, any steps we will take will have to be legal. This government, this Coalition Government, of course is not going to act outside the remit of international law. But let’s remember that the use of chemical weapons is a flagrant abuse of international law. These weapons were first banned by international conventions back in the 1920s after their widespread use in the First World War, a hundred years ago, and what we want to ensure, as an international community, is that we don’t go back to a world in which people think they can use these heinous weapons with impunity.

    This is about taking proportionate, legal and carefully circumscribed steps to ensure that everybody understands, the world round, that we will not stand idly by when chemical weapons are used in complete breach of international law.

  • Oliver Heald – 2013 Speech on Fighting Economic Crime

    oliverheald

    Below is the text made by Oliver Heald, the then Solicitor General, in Cambridge on 2 September 2013.

    I would like to thank Professor Barry Rider for inviting me to speak to you this morning on the first day of the 31st Cambridge International Symposium on Economic Crime. I would also like to thank the organising institutions and sponsors for their vital support for this event.

    The Cambridge Symposium on Economic Crime is an internationally recognised event. Each year the symposium attracts the foremost experts from a range of different backgrounds, including government, law enforcement, business and academia. Some have travelled a very long way to be here today, despite significant other demands on their time. The importance of this symposium is demonstrated by the fact that it attracts such an eminent group of attendees. Those who are here have a valuable opportunity to meet with peers from around the world, to exchange knowledge and experiences, to improve our respective understanding of the threat posed by economic crime to the global economy and to develop our responses to it.

    The subject of this year’s symposium is ‘Economic Crime in the Modern World, and the Role of the Private Sector – Partners and Problems’. As the first speaker this morning I will try to develop this theme, and outline some of the issues that others will address in more detail later this week.

    First, I will describe what I see to be the magnitude of the challenge faced by those of us who are responsible for tackling economic crime in today’s globalised economy.

    The challenge posed to society by economic crime

    In the United Kingdom, the profile of economic crime is now higher than ever before. Since the global financial crisis began in late 2007 it seems that financial institutions, markets and businesses have endured years of perpetual crises. Rarely has a week passed without the emergence of some new allegation of financial misfeasance, fraud or corruption.

    In particular, the problems in the banking industry have received huge publicity. The most high profile current issue in the United Kingdom is the LIBOR scandal; the allegations that bankers have colluded to manipulate the London inter-bank lending interest rate.

    In the summer of 2012 the UK’s Serious Fraud Office commenced a major investigation into the LIBOR allegations of criminality. I am very encouraged that the Serious Fraud Office is making good progress and has charged some individuals with criminal offences. It is vital that law enforcement agencies are seen to have both the will and capability to investigate offences relating to complex financial transactions.

    Similar scandals concerning the manipulation of bench mark rates have been exposed in other jurisdictions. In today’s complex global economy, where these bench mark rates are used in so many derivative financial products, it is difficult to comprehend the extent of losses that may have been caused. Certainly, the consequences are spread across the world.

    Technological change and the development of complex financial products have transformed the way that business is conducted, presenting new opportunities for fraud and money laundering activity. This poses significant challenges for law enforcement organisations and for legislators.

    Law enforcement agencies and regulators seek to address criminal wrongdoing by applying existing laws to criminal behaviour that was not in contemplation when those laws were passed. Legislators attempt to develop rules that will prevent these problems happening, but without knowing how business will be transacted in the future.

    However the recent economic crime scandals are not limited to the technological advances or the complexities of the financial sector. Allegations of corruption have recently been made against some of the UK’s most important and respected companies and there have been cases of financial misconduct by politicians.

    A great deal has been written about these economic crimes and the general public is now much more informed, and concerned. The cumulative effect of these scandals has been to weaken public confidence in the probity of political institutions, financial institutions and businesses that collectively form the fabric of society.

    These are the organisations that the public trusts to make the laws that govern how society is to behave, to act in our interests when looking after our pensions and to be responsible employers. Public confidence in these institutions has been undermined by dishonesty and greed. It is vital to the stability of democratic society that public faith in these institutions is restored.

    Steps that the UK has made to address the threat of economic crime.

    During the past decade there have been dramatic changes in the UK’s response to the evolving threat of economic crime. An important new agency is being established to co-ordinate the fight against serious and organised crime. The UK has introduced new laws to combat bribery and corruption. UK prosecutors will soon have new tools available to deal with corporate offending.

    On 7 October 2013 the new National Crime Agency will be launched. The National Crime Agency (or NCA) will be an operational crime fighting agency with a statutory responsibility for detecting and preventing serious and organised crime.

    The NCA will comprise of four commands each of which will have responsibility for overseeing and co-ordinating the UK’s response to a specific area of criminal activity. The NCA’s Economic Crime Command is to be responsible for tackling fraud and cyber crime. The Economic Crime Command will work in partnership with existing agencies, including police forces and the Serious Fraud Office, to identify strategic priorities and co-ordinate operations in the fight against economic crime. A key feature of the NCA, and a significant point of difference with other law enforcement agencies, is the function of prevention and deterrence. The NCA is to be the national intelligence hub for economic crime; it will be responsible for building and maintaining a comprehensive intelligence picture of the threats, harm and risks to the UK from organised criminals. Using existing national fraud intelligence analysis, it will achieve a greater understanding of the links between organised and economic crime. In the past decade the UK has enacted a several pieces of new legislation specifically to combat economic crime – most recently, the Bribery Act 2010 and the Crime and Courts Act 2013.

    The Bribery Act came into force in July 2011 and included a new offence for corporates: ‘failure of a commercial organisation to prevent bribery’. The Bribery Act also provides a statutory defence if the organisation can prove that it had put in place adequate procedures to prevent persons associated with it from engaging in bribery. This new offence, and the available defence, has placed an onus on companies to review their operations and implement appropriate compliance processes. It obliges businesses to take responsibility for ensuring they operate in a lawful and ethical fashion.

    This year the UK Parliament passed the Crime and Courts Act 2013 which provides UK prosecutors with a new tool for dealing with corporate offences; deferred prosecution agreements (or DPAs).

    DPAs will give UK prosecutors a new flexibility to deal with corporate offending when a civil remedy is insufficient, but where prosecution and the associated consequences (for example, reputational damage, loss of share value and redundancies) might be disproportionate. As an alternative to launching a full criminal prosecution, a UK prosecutor will soon be able to offer a company the opportunity to resolve its position by negotiating the terms of an agreement. The Act suggests a non-exhaustive range of provisions which a DPA may include for example, financial penalties, compensation to victims, implementation of a compliance programme and donations to charity. The terms of the DPA will need to be “fair, reasonable and proportionate” and will be subject to approval by the Court. If the DPA is fully adhered to over the specified time period, the company will avoid the expense, uncertainty and reputational damage associated with a full criminal prosecution.

    Those are just some of the important changes that the UK has made to combat the evolving threat of economic crime. Of course governments and lawmakers are obliged to attempt to design a legal framework to make rules to fix problems. However I would now like to say a few words about the important role the private sector has in this arena. In the past some companies have chosen not to address ethical and legal problems. When companies were caught out, they adopted an approach of “deny and defend”. However, companies have a clear interest in protecting the integrity of markets and attitudes and behaviours with regard to ethics and compliance are now changing. This was demonstrated recently by the strenuous efforts that many companies took to review their practices in light of the Bribery Act and to put in place measures to prevent bribery and corruption.

    For some time there have been examples of lawmakers imposing obligations on businesses to co-operate in the fight against economic crime. Approximately a decade ago in the UK, the Proceeds of Crime Act imposed an obligation upon the regulated sector to report to the appropriate authorities suspicions of laundering of criminal proceeds. This has imposed a sometimes onerous but always important responsibility on businesses, with the underlying message that they need to take positive steps to notify authorities when they become aware of potential wrong doing.

    Businesses can assist in the fight against economic crime by acting responsibly. If and when a company discovers wrong doing, it should take steps to notify the authorities and can expect to receive some reasonable quid pro quo for doing so. An example of this is the widespread use of leniency programmes for those companies which provide information or assist investigations connected with cartel offences. Similarly, DPAs will provide a new mechanism which should encourage companies that discover internal wrong doing to self-report in the confidence that they will receive a fair and reasonable benefit for doing so.

    Businesses can develop their internal processes to prevent economic crime; ensuring staff are trained to be fully aware of their legal and ethical obligations. Compliance and risk management must be treated as important issues. Compliance officers should be communicating regularly and substantively with senior executives.

    Furthermore there is a commercial imperative for private sector companies to assist to develop solutions to prevent fraud. Technological advances have opened up new opportunities for illegal activity. Fraud is being perpetrated on an increasing scale using the internet against the public and private sectors by data and identity theft. Virtual currencies provide a new vehicle for money launderers. There are opportunities for private sector companies to develop products and services to make online processes more robust and secure, and to assist the public sector to improve its defences and reduce the cost of fraud.

    Conclusion

    Economic crime is more visible than ever before and the speed of technological advance, and new ways of doing business, makes the task of fighting economic crime ever more difficult. The traditional response to new types of crime is for governments to address them by making new law. However new laws usually involve creation of additional red-tape burdens for business. If businesses continue to treat compliance as an important issue, and take the initiative to find and prevent problems, this will produce a more effective response to the challenge of economic crime, and will reduce the need for governments to fashion laws which impose expensive obligations on the private sector. Thank you for your attention and for inviting me here today. I hope this week’s symposium will be a thought-provoking and enjoyable experience for all of you.

  • George Osborne – 2013 Speech at Offshore Europe Conference

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    Below is the text of the speech made by George Osborne, the Chancellor of the Exchequer, in Aberdeen on 3 September 2013.

    Good morning.

    I’m delighted to be here in Aberdeen at such an illustrious gathering of the oil and gas industry – an industry that is of vital importance to Britain’s economy.

    But let us first remember Duncan Munro, Sarah Darnley, Gary McCrossan and George Allison.

    Four brave professionals who ten days ago, tragically lost their lives in a helicopter crash off Shetland.

    Our thoughts are with their families, friends and colleagues at this difficult time – and the book of condolences here today shows the depth of feeling for those four brave professionals.

    And we should also remember that 25 years ago, 167 people lost their lives in the Piper Alpha disaster.

    A tragedy that leaves an indelible mark here in Aberdeen on the industry, and the whole community.

    Let us pay our respects.

    To the brave professionals who lost their lives last month, and on that terrible night 25 years ago.

    To their families and friends in whose memories they live on.

    To those who survived and the rescue teams who helped them do so.

    The whole of the UK owes a massive debt to the thousands of men and women who work in what is an inherently dangerous environment – delivering enormous benefits to every family in the country.

    I know that as an industry you sometimes feel taken for granted.

    Well, I want you to know this: you are not taken for granted.

    You are very much appreciated.

    And my personal message to you is this.

    First, I recognize the vital role the oil and gas industry plays in the UK economy – and will continue to play for many many years to come.

    Second, I also recognize that the oil and gas remaining in the UK Continental Shelf will be increasingly difficult and more expensive to extract – but that this Government commits to play our part in delivering the investment that’s needed.

    And third, I believe that the best way to support this industry and maximize the returns from this great national asset is:

    – by working together across the UK;

    – through mobilizing all the UK’s resources; and
    by pooling our risks to provide stability across the whole UK.

    On Sunday, I was on the Andrew Marr TV show.

    In his book, the History of Modern Britain, he says that the oil and gas industry’s story is one of the most remarkable and under-discussed in the entire history of our country.

    It’s a tale of pioneering geologists, seismologists, roustabouts and rough-necks.

    He said that: “The discovery and exploitation of huge oil and gas fields far out under cold, stormy and turbulent waters … is a modern epic of technical skill, bold finance, endurance and individual courage”.

    And he is right to compare the feats of North Sea civil engineering with the building of the railways by the Victorians.

    I’ll never forget my first visit to a North Sea platform, the Elgin Franklin platform, six years ago.

    The long helicopter flight across the bleak, open sea – and then, the pinprick in the distance of the platform looming ever larger – until you land on the enormous construction.

    I remember that first, powerful emotion you get when you step out onto a North Sea platform: what an extraordinary achievement of the human spirit and ingenuity.

    Later today I will travel out to Talisman Sinopec’s Montrose platform and I know I will feel the same pride in what our country can achieve when we work together.

    For from the day 38 years ago, when the first oil was piped ashore in Cruden Bay, the oil and gas industry has brought huge benefits to the whole of the UK.

    And it continues to do so today.

    Oil and gas still meets around 70 per cent of the UK’s primary energy needs – with more than half of UK demand for oil and gas met by UK production.

    The heat and light for our homes;

    power for our businesses;

    and fuel for the transport for our people and goods.

    Directly and indirectly, the industry employs nearly half a million people – almost half of them here in Scotland.

    It’s the largest industrial investor in the UK – and it’s investing more than ever before.

    And while the expertise for the initial development of the North Sea was largely imported, a world class home-grown industry has sprung up on the back of it.

    Over 1,000 companies in and around Aberdeen alone.

    Businesses which are now leading an export charge from Azerbaijan and Russia, to Brazil and the Middle East – with international sales of nearly £8 billion from Scotland alone.

    As all of you know, subsea technology is a sector where the UK is a global leader – and it’s one of our fastest growing industries.

    And I’ve spoken to the subsea’s industry conference here before in Aberdeen to celebrate its success.

    Today we capture more than a third of a global market – a market that’s set to double over the next five years.

    Growth at home and abroad.

    Growth that I want to help you deliver.

    Of course, I understand that your industry has changed hugely since the early days of North Sea extraction.

    Then, the North Sea was dominated by a handful of ‘majors’ – the BPs and Shells, the Occidentals and Exxons.

    Now, there are over 50 oil companies operating in the North Sea – with smaller independents and national state-owned oil companies rubbing shoulders with the original ‘majors’.

    New names to conjure with: Apache, KNOC, Petrofac, Talisman, Sinopec, JX Nippon.

    While the pattern of ownership today has changed from 30 years ago, the nature of the development opportunities is different too.

    Companies are operating in a mature basin.

    And that brings me to my second point.

    The fact is that the oil and gas remaining in the UK Continental Shelf will be increasingly difficult and more expensive to extract.

    You know well that the ‘big’ strikes are fewer and farther between.

    The opportunities are often smaller, technically challenging or both – with the oil either in deeper waters or just harder to reach and extract.

    In the central North Sea, companies are drilling at water depths of 100 metres.

    In the planned Rosebank field West of Shetland, Chevron will be operating at 1,100 metres in waters more than ten times deeper.

    New entrants are bringing fresh thinking and impetus, making viable even the most marginal fields.

    Normally when politicians visit platforms, they visit the newest field.

    But the Montrose field I’ll be visiting is one of the oldest in the North Sea.

    I’ve deliberately chosen to go there because I want to see how Talisman Sinopec and Marubeni Oil and Gas’s £1.6 billion investment is extending the life of five fields by 14 years – which means that these fields will be producing the equivalent of an additional 100 million barrels of oil until 2030.

    This project alone will be creating and securing 2,000 jobs throughout the UK supply chain. But there are also challenges.

    We need to develop a North Sea regime that keeps pace with the changing structure of the basin.

    The Montrose project is a case in point.

    Its economic viability depends on a complex mix of factors: targeted tax breaks, and bundling a number of older fields with two undeveloped ones.

    So, as we think about the future of the North Sea, what can we be certain about?

    We can be certain that:

    – our reserves aren’t infinite;

    – the costs of extraction are rising;

    – and North Sea tax revenues are in long-term decline.

    But we can also be certain that the ingenuity of the industry will secure its long-term future and that we’ll still be recovering oil from the North Sea and West of Shetland in the 2050s.

    We can’t know the precise level of recoverable reserves.

    The future is about volume and value.

    So nothing can – or should – be taken for granted – and we know that.

    The British government’s objective is simple: we want to work with you to maximise the North Sea’s recoverable reserves.

    So we’ve put in the place the first ever national Oil and Gas strategy.

    The PILOT programme is identifying ways to remove barriers to development.

    And, working through the Fiscal Forum, we’re putting in place tax reliefs to support the industry as extraction becomes more difficult.

    In my Budgets, I’ve doubled the value and extended the scope of the small field allowance.

    I’ve put in place a £3 billion allowance to support investment in and exploration of large and deep fields like those West of Shetland.

    And I’ve introduced a £500 million allowance for large shallow-water gas fields and a brownfield allowance to encourage incremental investment in older fields.

    Perhaps most important of all, I’ve provided the industry with long-term stability, by providing certainty on tax reliefs – worth upwards of £20 billion over a 30-year period – on future decommissioning costs.

    Funded by the whole of the UK, that’s equivalent to £3000 pounds for every man woman and child in Scotland – being used to support investment in the North Sea.

    The UK government will enter into contracts with industry setting out what relief companies can expect to receive in future when decommissioning assets.

    And if the actual amount turns out to be less, the government will make up the short-fall.

    This means assets will be easier to transfer and the climate for investment improved.

    I can tell this Conference today I’m unveiling the final decommissioning deed.

    A concrete example of the tax certainty this government is providing.

    Never before has any government entered into legally binding contracts with individual companies to guarantee the tax relief they can expect decades into the future.

    No other place in the world provides such a guarantee.

    And your industry – not the Treasury – estimates that this decommissioning certainty will drive at least £17 billion of increased investment, extending the life of the North Sea basin with an additional 1.7 billion barrels extracted.

    It’s the culmination of 18 months of hard work and close collaboration between you and government.

    Thank you for that.

    Now let’s get the deeds signed and get the investment.

    And we’re already seeing results from this new tax regime.

    Oil & Gas UK are forecasting record levels of investment of £13.5 billion for 2013, helping to stem the decline in production of recent years.

    And look at the projects already announced.

    Statoil are investing £4.3 billion in the Mariner heavy oil project, creating 700 jobs.

    EnQuest, the UK’s largest independent oil producer are investing £170 million in the Thistle field, safeguarding 500 jobs and creating nearly 1,000 more in the supply chain.

    CNR International are investing £300 million to extend the life of Ninian field and produce 5 million additional barrels.

    And following the introduction of the large shallow water gas field allowance, GDF Suez, Centrica and BayernGas UK are investing £1.4bn in the Cygnus gas field, creating 1,200 jobs.

    We want to build on this success.

    Sir Ian Wood is currently reviewing how we can improve future economic recovery of oil and gas from the UK Continental Shelf.

    He is looking at what further powers the government should have to ensure the North Sea remains a prime location for new investment and that government ensures companies are operating their licences effectively.

    Government and industry have a shared interest in maximizing the economic production of the UK’s oil and gas reserves.

    I want to see far greater collaboration from industry on production and exploration.

    Because the fact is, production efficiency is down.

    When ownership of North Sea assets is more widely spread than ever before, collaboration is often the only way to improve the economic viability through economies of scale.

    Like:

    Access to critical infrastructure.

    Keeping in play older infrastructure hubs, so that recoverable reserves aren’t lost forever.

    Sharing the benefits of new technologies and extraction methods.

    Above all, deploying the best talent to the North Sea so the basin can flourish.

    Government and industry pulling together to maximise both of our returns from the North Sea – volume and value.

    Let me turn to the bigger picture on energy.

    Your message, which we’ve heard and listened to, is the need for predictability so you can plan for the long-term.

    That’s what our decommissioning tax certainty is all about.

    But this is just one part of our support to the energy market.

    We are seeking, from companies like yours and others, tens of billions of pounds of investment to secure Britain’s energy in the decades to come.

    And we want a mix – oil and gas are vital, but so too are renewables and nuclear.

    My ambition is that when you look across the western world, you see the UK as the best and most stable place to invest – and we’re creating the tax and regulatory regime to achieve it.

    Last year, we published our Gas Strategy which set out our expectation that gas generation will be an essential part of our energy supply.

    In June, we published draft strike prices for renewable energy generation – providing the certainty needed to make investing in new technologies less risky and more attractive.

    We’re introducing ambitious and radical reforms to the electricity market – a new way of paying for generation will bring forward up to £110 billion of private sector energy investment.

    We’ve set up a Green Investment Bank to invest in green energy projects and leverage further investment from the private sector.

    We’ve already committed to invest up to £3.8 billion through the Bank.

    On Shale, let me say this, because I know it’s an issue that has been in the news a lot recently.

    Of course, we want exploration of our shale resources to be safe, to avoid environmental damage, and be done in a way where communities get the benefit of what’s happening in their backyard.

    That’s why we got the industry to commit to generous community benefits.

    But let me also say this.

    Britain led the way in finding new sources of energy – coal in the 18th and 19th centuries, oil in the 20th century, and renewables at the turn of the 21st century.

    If we turn our back on new sources of energy which countries like China and the US are exploiting, then:

    – we’re saying to British families: you pay energy bills that are higher than those paid by families elsewhere;

    – we’re saying to British companies: you’ll face costs higher than companies face elsewhere;

    – and we’re saying to our country: we’ll have fewer jobs, less investment and higher costs of living – and I’m not prepared to say that to the British people.

    Britain is not going to turn its back on the energy sources of the future.

    So we’ve set out a generous new tax regime for shale gas and removed the bureaucratic obstacles to its use onshore and offshore.

    And when I talk about Britain I mean a United Kingdom.

    I’ve talked about predictability in this speech, but I know that one issue that has created uncertainty is the possibility of Scottish independence.

    We determined to end that uncertainty by holding a referendum that will reach a decisive outcome next year.

    The question of whether Scotland’s future lies within the UK or without needs to be answered.

    As an Englishman, I passionately hope people in Scotland vote to stay within the UK in just over a year’s time.

    This hope is, I know, shared by the great majority of people living in England, Wales and Northern Ireland.

    The reason is simple: we’re better together.

    For those tempted to think that the rest of the UK would be better off without Scotland, let me be clear.

    Separation would bring consequences for not just Scotland.

    We would all suffer.

    The rest of the UK is by far the most important market for Scottish goods and services.

    Scotland’s trade with the rest of the UK is almost double its entire trade with the rest of the world – and it’s a share that’s growing.

    This trade benefits companies and employees the length and breadth of Scotland.

    And it’s a two-way street: Scotland benefits from being a strong part of the UK, and the UK also benefits from Scotland’s place within it.

    As our economy recovers, I want Scotland to lead the way.

    All achieved within the UK, not outside.

    So let’s lay to rest some myths once and for all.

    Independent European countries of similar size don’t out-perform Scotland.

    In fact, Scotland performs well against comparable European States.

    Introducing an international border between Scotland and the rest of the UK would reduce business and trade across the border.

    You don’t need passport controls and customs officers for there to be a negative effect.

    It’s the gradual growing apart of institutions, policies and regulations;

    It’s the slow unpicking of the unified labour market, an integrated infrastructure and a single tax system – the possibility of different currencies.

    Today, we’re publishing clear analysis that shows the value of Scotland being part of the UK, in terms of extra trade and economic activity over the coming generation.

    As the paper says: Scottish GDP could be 4 per cent higher in 30 years if it is part of the UK. £2000 for every family in Scotland.

    Put it another way: separate from the UK, create an international border, and the loss to every Scottish household will be £2000.

    So, we should think very hard before Scotland exchanges a UK domestic market that works well for a new foreign export market that won’t work as well.

    If it ain’t broke, don’t break it.

    Your industry is a great example of how we’re better together when we work together, when we are together.

    Oil & Gas UK talk about the “need for fiscal predictability and long-term planning to optimize recovery of the country’s offshore oil and gas resource”.

    Today all of the major tax revenues, whether it’s from oil, or retail, or consumption, or income or duties are pooled across the UK.

    This provides Scotland with secure and stable funding; the Scottish government with budgetary predictability and Scotland’s public services with the stability to plan for the long-term.

    As part of the UK, Scotland doesn’t have to cope with the challenge of managing volatile oil revenues.

    This is no small challenge – Scottish tax revenues from oil can fluctuate from year to year from £2 billion to £12 billion.

    They are the most volatile tax revenues that exist.

    Finance ministries are always at risk of being over optimistic about how much revenue they’re going to get in.

    That’s why we created the Office for Budget Responsibility.

    It is totally independent.

    And it now provides for us independent estimates of tax revenues – including from oil and gas.

    So when you hear big numbers bandied about that aren’t impartial, and it sounds too good to be true – it probably is.

    The UK government can provide the oil and gas industry with a long-term commitment to decommissioning relief.

    This commitment represents around 1 per cent of UK GDP.

    It would represent around 12 per cent of Scottish GDP.

    It’s for the Scottish government to explain how they would pay for that.

    The UK’s approach looks at the wider economic contribution of oil and gas, not just at tax revenues.

    We’ve been prepared to take the long-term decisions needed to unlock investment.

    We accept that’s cost us in lower tax receipts in the short term – but its worth it for the benefits over the long haul.

    We’ve been able to pursue this course because the UK has broad shoulders – a big domestic market, a diverse economy, a wide tax base and a broad energy mix.

    Look at the facts.

    Oil and gas is an important national asset, but revenues from oil and gas are just 2 per cent of our total tax receipts.

    Renewable energy is an increasingly important part of the energy mix.

    Many of the companies represented here today are also leaders in renewable energy.

    Last year over £1.5 billion was invested to develop Scotland’s abundant sources of renewable energy, which now supports over 11,000 jobs and generates nearly 40 per cent of Scotland’s electricity.

    This is made possible by over £500 million a year of UK support, with the costs spread amongst 26 million households across the UK, keeping average electricity bills in Scotland lower than they would be if funded by Scottish consumers alone.

    How likely is it that this kind of subsidy would be provided to the energy market of a foreign country?

    As I’ve said many times before, Scotland could go it alone.

    But to suggest that spending can be increased; tax bills cut; an oil fund established; household energy bills kept down and investment in renewables increased simply doesn’t add up.

    Texans played an important part in the early exploration of the North Sea.

    So you’ll recognise the well-known Texan phrase – “all hat and no cattle”.

    I hope those who advocate Scottish independence will offer a little less hat and a bit more cattle.

    Let me end by saying this.

    How we manage our country’s natural resources goes to the heart of the solidarity between the peoples and nations of these islands.

    Whether we are realising the assets from the dark waters of the North Sea or West of Shetland, or shale gas reserves in Lancashire, or coal in Yorkshire or renewable energy in the Thames Estuary and the Firth of Forth.

    You have my total commitment to your remarkable industry.

    I will work with you to get the tax regime right, to support more investment, to create the climate for more production and more jobs.

    My door is always open to hear what you have to say and to help you.

    Volume and value.

    Valuable and valued.

    We know that when we:

    – pool our resources

    – share our advantages

    – and join forces to tackle future challenges

    – we achieve far more by working together

    Industry and government.

    Scotland and Britain.

    The whole is so much greater than the sum of the parts.

    Thank you.

  • Gregory Barker – 2013 Speech on Low Carbon Technology

    gregorybarker

    Below is the text of the speech made by Gregory Barker, the then Minister of State at the Department of Energy and Climate Change, at Carlton House Terrace in London on 3 September 2013.

    Good morning, it’s a real pleasure to be here today to talk about the opportunities and challenges in commercialising new low carbon technologies.

    Thank you to the NPL Centre for Carbon Measurement and the Energy Technology Institute for organising a forum on this important topic.

    Earlier this year, I had the opportunity to visit NPL and witness first-hand some of the amazing research they do.

    Such as new ways to measure carbon emissions and spot leaks from fracking and carbon capture which will be critical for building trust and public acceptance.

    Both NPL and ETI are working directly with SMEs and large industrial companies supporting them to bring their innovations to market.

    There are three key points I would like to make in my speech today:

    Firstly, that low carbon innovation is a huge opportunity for the UK – both for growth and for greening our planet.

    Secondly, there still remain several challenges to overcome to capitalise on innovation.

    Thirdly, collaboration between Government and innovators will be key.

    To my first point, UK innovation in low carbon technologies is a fantastic opportunity for the economy.

    A key driver of future growth.

    To quote comments made by the Prime Minister earlier this year, he said:

    “Make no mistake, we are in a global race and the countries that succeed in that race … are those that are the greenest and the most energy efficient.”

    Indeed, recent growth figures show that green investment is paying back in spades and helping the UK to stay ahead in this global race for jobs and growth.

    According to the CBI last year at least one-third of the UK’s recent economic growth was likely to have come from green business.

    In 2011/12, the UK enjoyed a £128 billion share of the low-carbon and environmental goods and services sector, LCEGS.

    Where the international market is worth £3.3 trillion.

    The UK is sixth in the global LCEGS market and the sector employs close to a million people.

    The key to this progress has been our unrelenting focus on driving innovation up while driving costs down.

    We must capitalise on this and continue to innovate to maintain our competitive advantage.

    In addition, meeting our 2050 carbon targets will require rapid and large-scale changes in energy efficiency, electricity generation, heating, transport and industrial processing.

    But equally the Coalition understands the pressure rising energy bills are putting on hardworking families up and down the country.

    Cost savings through innovation are helping to cushion consumers against the upward trend in energy prices.

    Over the next 40 years, the ETI’s ESME model suggests that savings to the UK economy could be up to £600 billion .

    So the opportunity is there.

    But how do we ensure the UK takes it?

    This brings me to my second point, that by understanding the challenges we need to overcome, we can capitalise on our innovation.

    The 3 key challenges we face are:

    – Skills

    – Finance and

    – Risk.

    To take the first of these, skills:

    The UK has a world class research base built on the skills of our scientists and engineers underpinned by a yearly 6 billion pound research budget.

    We need to capitalise on the opportunity this investment in our research capacity brings.

    A few months ago a report published by Shell Springboard and the Carbon Trust showed that small businesses account for more than 90% of the UK’s low carbon sector!

    We can help these businesses grow and benefit from the jobs they will create.

    A second challenge innovators face is securing financing at the right time and throughout their development journey.

    This is a particular challenge for smaller businesses who are not generating sufficient revenue to borrow from banks and the complexity of their technology is unlikely to be widely understood.

    It is in our interest to ensure companies can find the help they need within the UK so that we can benefit from their innovation.

    The final challenge, which is closely tied to costs, is risk.

    New technologies have inherent risk.

    They are untested; trust needs to be built through the generation of a track record or through independent performance verification and certification that a technology will work.

    A good example is technologies trying to break into the notoriously non-innovative domestic and non-domestic buildings efficiency market.

    If we can help reduce this risk we will speed the uptake new technologies.

    And encourage further private investment .

    To my final point, collaboration between government and innovators is essential.

    Programmes all across government aim to help transform small businesses into high-growth businesses.

    The Department for Business Innovation and Skills runs a ‘Growth Accelerator’ programme providing coaching support to businesses from every sector.

    And DECC’s Energy Entrepreneurs Fund provides incubation support alongside project grants to ambitious high growth potential companies.

    Under the first phase of the programme we are funding 30 projects to support young innovative enterprises develop low carbon products.

    Two examples are Radfan and Ultramo.

    Radfan is being funded to develop and market a radiator mounted fan to make room heating more efficient.

    Ultramo is being supported to develop a new type of highly efficient engine.

    The second phase of the Energy Entrepreneurs Fund has recently closed and we will have a whole host of exciting new projects to announce soon.

    Overall, DECC schemes are contributing to growth in more than 100 entrepreneurial companies.

    And in the past year alone, I have announced DECC funding for a number of innovative technologies including £6.3 million for offshore wind components £19 million for energy storage £5 million to integrate UK nuclear research infrastructure the world’s first Renewable Heat Incentive. And £10 million for energy efficiency technologies through the ‘Invest in Innovative Refurbishment’ programme,

    In addition, the ETI have helped build a 15 megawatt drive train testing facility at the National Renewable Energy Centre near Newcastle.

    And Samsung will soon be the first manufacturer to use the facility.

    These last two programmes are great examples of government support to help companies test and demonstrate their products specifically to reduce that ‘new technology’ risk and help them enter the market.

    We are also working across government and all the public sector funders of innovation have come together to form the Low Carbon Innovation Coordination Group, LCICG.

    Together we will provide 1 billion pounds between 2011 and 2015 to directly support energy innovation.

    To identify how best to identify and target our support the LCICG has published a series of Technology Innovation Needs Assessments, TINAs.

    These reports cover technologies from domestic buildings to energy storage and new nuclear with the 11th report on hydrogen to be published shortly.

    The LCICG are now building on the TINAs to develop a strategy, due to be published later this year which will lay out a shared vision of public investment principles approach and technology improvement priorities between now and 2020.

    The strategy will deliver greater confidence to the energy sector supporting de-risking and alignment of investment.

    And we will work with innovators and private investors to build development pathways and flexible finance so companies can secure the help they need to grow.

    These are just a few examples of where Government is collaborating with industry and I hope that today we can learn more from innovators and investors about particular challenges in this area.

    In conclusion, low carbon innovation is a huge opportunity for the UK there are challenges we need to overcome and collaboration between business and Government will be central to this.

    This Government plays a key role as an enabler.

    But it is our scientists, engineers and entrepreneurs that are the sources of innovation.

    It is your ideas that will reduce energy costs, create jobs and stimulate growth.

    It is a diverse landscape and transforming our economy is a broad and complex challenge but to borrow another quote from the Prime Minister:

    “Together we can make Britain a global showcase for green innovation and energy efficiency”

    Thank you.