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Tag: 2019

  • Philip Hammond – 2019 Statement on ECOFIN

    Below is the text of the statement made by Philip Hammond, the Chancellor of the Exchequer, in the House of Commons on 16 July 2019.

    A meeting of the Economic and Financial Affairs Council (ECOFIN) was held in Brussels on 9 July 2019. The UK was represented by Mark Bowman (Director General, International Finance, HM Treasury). The Council discussed the following:​

    Early morning session

    The Eurogroup President briefed the Council on the outcomes of the 8 July meeting of the Eurogroup, and the European Commission provided an update on the current economic situation in the EU. Ministers then discussed potential new sources of revenue for the upcoming multiannual financial framework the EU’s long-term budget.

    Own resources

    The Finnish presidency gave an update to the Council on the potential new sources of revenue for the upcoming multiannual financial framework, following a discussion during the early morning session.

    Presidency work programme

    The Finnish presidency presented its work programme on economic and financial matters for July to December 2019.

    Appointment of the President of the European Central Bank

    The Council adopted a Council recommendation on the appointment of Christine Lagarde as the next President of the European Central Bank.

    European semester

    The Council adopted the 2019 country-specific recommendations as part of the European semester process.

    Any Other Business

    The Dutch Finance Minister briefed ministers on the topic of aviation taxation and carbon pricing.

  • Greg Clark – 2019 Speech on Competition Rules

    Below is the text of the speech made by Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, on 18 July 2019.

    I was reflecting on competition, probably as we all were at the weekend when we were spoilt for choice in terms of particular sporting competitions.

    In this context, it’s not the perhaps, briefly more acquired taste of lawyerly ding dongs at the Competition Appeals Tribunal.

    But we were really spoilt last week in having Lords, Wimbledon and Silverstone.

    As I was watching the tennis, it struck me that the International Tennis Federation must have had to change the rules on permitted rackets in the face of the technological revolution that has taken place in material science.

    And guess what?

    Up until 1978, the rule on rackets amounted to these timeless and rather laissez-faire 11 words and I quote:

    “The frame may be of any material, weight, size or shape.”

    Admittedly, there were 60 further words on the stringing of the racket, another 65 enouncing the principle that the character of the game should not be changed by “undue spin”.

    But what has happened to that admirably brief 140 words of competition regulation since then?

    Well, the era of laissez-faire in tennis rackets is definitely a distant memory. The rule has had an 8-fold word-count increase.

    The federation now pronounces on details going all the way from maximum dimensions to whether the racket can have communications equipment embedded within it.

    From whether a player can use two rackets at the same time to whether a racket can carry a solar cell or battery. There’s a serious point in all this. Tennis works as a competition because the ITF makes sure that the rules are kept up to date with changes that take place.

    We the public are the ultimate beneficiaries of the wonders of sport at this level and we can enjoy the game decade after decade because the rules keep up with the technology.

    To paraphrase The Leopard, if the game is to stay the same, everything must change.

    And so, I want to argue today, the same is true for competition in the economy.

    If we want to have rivalry, we want to continue to do the unrivalled good that competition has, in the past, done for our economy, we must constantly adapt its rules.

    There are three main reasons that the rules of competition must change:

    First, this is unfinished business from the recent past, we have got to make retail markets in regulated sectors – like energy, finance and telecoms – work consistently in the interests of all households.

    Second, platforms, big tech, big data are, as everyone knows, disrupting the basic plumbing of markets and, despite the huge benefits they have brought, they sometimes create new forms of harm – especially for vulnerable consumers. Third, we have a productivity problem to solve and competition policy is one of the really powerful tools for improving the economic performance of firms.

    All over the world, governments and competition authorities have seen that the promises made of the system, that was slowly built over the last 40 years with Britain leading the way consistently, has sometimes fallen short in the face of new threats.

    In this talk, I’d like to take stock of what we’ve achieved in the last three years and to talk a bit about what needs to be done and to communicate why, in my view, it is so urgent we get on with this.

    But before turning to each of these, allow me a brief, historical detour which I hope will show that government shaping of markets has always been with us, and needs to be approached without ideology – pro or contra – but in a pragmatic and empirical spirit.

    You can go to the British Museum today and see a stamp of King Alfred’s penny on a half-pound lead weight. It had been given the King’s seal of approval, literally. You could buy your grain and the King vouched for the weight you’d get in exchange. And there’s an obvious reason; Alfred needed to regulate markets.

    Just imagine the Monty-Pythonesque scene of a market on the Mercia/Wessex border, circa 880AD, where the miller defends himself against a buyer claiming fraud.

    He claims his weights are right. The baker offers another definition of the pound, and the butcher a third.

    If you think mobile phone tariffs can be confusing, just imagine comparison when different suppliers don’t agree on basic measures of minutes or gigabytes.

    Regulation to make sure that competitive markets can even establish themselves has been the stuff of government forever.

    Our complex modern economies work because we’ve been able to push away the boundaries of mistrust.

    The extraordinary wealth that has been created and spread by national and international markets is underpinned by the countless rules and mechanisms of regulation. Much of it, from the joint stock company to food standards, backed by the force of law.

    But that’s not the only reason that Alfred had to regulate markets. It was also that by unifying Wessex, Anglia and Mercia, that he created a single market and so disrupted older patterns of exchange. And this was very good for all the reasons that we know – insurance, specialisation, etc.

    But it also undermined some of the traditional social mechanisms in which trust was rooted. If you didn’t know people in your town or village or wider area, then the traditional foundations of trust may not be adequate.

    And so, regulation, again, filled the gap and allowed the new markets to flourish.

    If good regulation does not accompany disruptions, then they can be resented, especially by those most reliant on those old social contexts.

    This need to make new retail markets work for all fits, in many respects, the problem we have today.

    I think of it as unfinished business of creating well-functioning consumer markets in the basic utility sectors that have been gradually deregulated over the last 40 years.

    There have been some huge successes in this programme.

    Technological disruption, driven by carefully constructed competition in telecoms, for example, has completely transformed our lives.

    The same scale of transformation cannot yet be claimed for how we use gas, electricity or water.

    The basic philosophy of utility deregulation in domestic retail markets was that we could eventually replicate the sorts of healthy, competitive markets that have evolved in essentials like food.

    This was part of the broader new regulatory philosophy pioneered by Britain 40 years ago and copied all over the world.

    The retail markets piece of this transformation still needs further development.

    First, there’s the relatively slow pace of basic innovation in some of these markets. Second, they have often settled into business models in which many consumers continue to be subjected to higher prices than can be justified, while a savvy minority benefit from very cheap deals.

    The CMA called this to public attention with the problem of default tariffs in energy. Martin Cave, who wrote the dissenting minority opinion to the CMA report is here and now chairs Ofgem.

    This recommendation to impose a retail price cap on default tariffs was made and Citizens Advice followed this up with, in my view, its very welcome “Super-Complaint” to the CMA, applying this argument to other markets.

    Let me take this moment to thank the Social Market Foundation and James Kirkup, in particular for the traditions and the work that this organisation has done to advance our understanding of the issue and how we can tackle it.

    The “loyalty penalty” has now been extensively analysed by the CMA and other regulators.

    The numbers can be eye-watering.

    A household inactive in all the markets studied risks being over-charged by £1549 per year.

    That is the same amount as the entire, annual discretionary spending of the poorest 10% of households, and often there is a close collaboration between the poorest and those who are paying higher.

    This government has responded extremely supportively to the CMA’s recommendations on the “loyalty penalty”. Business and their regulators must find ways to end the worst effects of these business models and the companies involved should look to the energy industry as a proof of our seriousness in the lengths we need the regulators to go to.

    Luring consumers onto cheap tariffs in the hope that many of them will fail to notice subsequent price rises should be seen as simply bad business.

    Doing everything possible to confuse customers so they don’t notice the rises is even worse. Protecting consumers from sharp practices has been a constant of Government in this country for centuries.

    I’ve mentioned Alfred’s standardisation of weights already. Another example comes in the medieval “Assizes of Bread”. Specialist courts that made sure that bakers and millers were stopped from selling substandard product.

    A home insurance company that gradually turns the screws, an energy company that price-walks you up the curve; they are earning their gains on a sort of asymmetry of power and information in which we have long intervened.

    These are business practices that rely on undermining the trust of the consumer.

    The markets that have really benefited from competition are the ones in which innovation, quality and price are the focus of corporate energies – not the invention of a new pricing practice.

    If the notion generally takes hold that our utility markets are rife with this sort of behaviour then the entire legitimacy, it seems to me, of that sector suffers, and indeed, the whole economy suffers.

    This is a point that has been very eloquently put on many occasions by Lord Andrew Tyrie, with us today, whom I was delighted to appoint to be Chair of the CMA. Andrew’s work before he took up this position as Chair of the Treasury Select Committee between 2010 and 2017 was infused by this very preoccupation. The legitimacy of our financial system being threatened by some, small number of bad apples in finance. And there are places where the same can be true in other household sectors today.

    So, when it came to the decision to appoint a new Chair to the CMA, I knew that Andrew’s combination of passion for the wellbeing of ordinary working people, his rigorous thinking and his ever-effective drive – having experienced it the other side of the Treasure select committee, being subject to grilling’s from Andrew, I can attest to the rigour of that and thought he was the ideal person for the task.

    And I was delighted that he received the unanimous backing of the BEIS select committee.

    Everything that I see coming from the CMA confirms in my view that Andrew was the right choice.

    Under his watch, the CMA has made it very clear that it would concentrate efforts on tackling consumer harms. The pace of change has been remarkable. From unfair administrative charges in care homes to an investigation of the funeral business. From cleaning up the online-ticketing market to hard-to-reverse subscriptions in online games. From excessive pricing in pharmaceuticals to ensuring merger activity does not undermine lively competition in the retail sector.

    These cases and more in the future, together with a welcome emphasis on strong public communication of the essential work that the CMA does, will both solve immediate problems and tell the general public that when it comes to their lives as consumers the CMA has their back.

    For this, I’d also like – as well as thanking Andrew – to commend Andrea Coscelli, the CMA’s Chief Executive whom I also appointed, and to all those in their organisation who have contributed to this excellent work.

    Recognising that competition policy is foundational to our economy and society, the first thing I asked Andrew in his new post was for the CMA’s recommendations on how we should reform the system itself.

    A large number of proposals were put to me in a thoughtful and comprehensive letter that some of you may have seen.

    Let me start by making three points of principle.

    First, the CMA wants its primary duty to be to the welfare of consumers. I have to say that at a philosophical level, I entirely agree.

    Competition should never be seen as an end in itself, except perhaps last Sunday when watching England win the cricket. But normally, it’s as a means to thriving lives on the part of consumers.

    Many of Andrew’s proposals relate to this basic shift in principle and the exact package we opt for will be a very important question to address, and do so urgently.

    Second, the CMA wants the enforcement of consumer law to be as effective as is the enforcement of competition law, and asks for new powers to be shared between itself and the sectoral regulators to make this a reality.

    As I have said already, in our response to the CMA’s loyalty penalty report, I agree with that too.

    This will help not only with the “unfinished business” but will also allow us to shape the new digital markets.

    Third, the CMA is very concerned that the speed of disruption in the economy, from digital markets and big data, means that the current machinery of competition enforcement is too slow.

    It is no good taking a tech company through the courts over many years, when in the meantime another three relevant markets have tipped into a “winner-takes-all” state.

    Again, I have no doubt that this is true in principle.

    This takes me back to what I said earlier about King Alfred’s need to regulate markets after the unification of markets in Wessex and Mercia.

    Cyberspace is a glorious new space for markets, but it is not in the long-term interest of business or consumers for it to become a low-trust environment, quite the reverse.

    Achieving greater speed and flexibility will require some of the solutions put forward by Jason Furman, especially more principles-based ex ante regulation of platforms.

    It will also require the CMA to be able to act more swiftly and robustly ex post where it finds anti-competitive conduct.

    And I agree with the CMA on this. What is needed now is to find a way of speeding up this work while maintaining the UK’s unparalleled reputation for procedural fairness and legal rights.

    Our reputation is enormously valuable in terms of business confidence, and it must always be maintained. And I have asked my department to prepare advice on the options we have on this.

    I would like to emphasise that these issues are urgent. Consumer mistrust in the economy must not be allowed to grow to be higher.

    The positions of platforms become more entrenched and every day we become more aware of some of the exploitative business practices that have become easy to spread.

    The CMA has produced a menu of reform options. The Furman Review has added to them. Our Smart Data Review has committed to some of these and to Furman’s central recommendation – the establishment of a Digital Markets Unit.

    Today, I am adding to this by publishing our strategic steer to the CMA and the Competition Law Review, a piece of analytical work on the technical performance of the competition regime which will provide important research material for the wider changes ahead.

    Now is the time for industry, the legal profession, economists, consumer groups, regulators and civil society to respond to these initiatives and proposals.

    And in this, I also very much think that we need to understand the views of judges and the judiciary since the appeals system is such an important part of enforcement. That will put all elements in place for a new administration to decide how to act on these pressing matters.

    The power of the CMA’s request for tools that can be used at speed arises, of course, from the spectre haunting all markets today; the disruption that can be associated with big platforms, big tech and big data.

    But what exactly is that spectre?

    Many ordinary consumers feel the pinch of loyalty penalties in recently deregulated sectors, and very few consumers think of the offerings from Google, Amazon, Facebook, Apple, Spotify, Uber, Deliveroo, Ocado or Netflix as anything other than a miraculous revolution in terms of ease, quality and price.

    Hands up here who remembers navigating London with an A to Z? Jumping off the page and having to fumble around the index, the pages becoming detached from the binder, often having to pull over, work out where the join in the pages was and how you transfer over – repeat and repeat and arrive usually very arrive late to your destination. If I were to mention the A to Z to my children, they wouldn’t know what I was talking about.

    Transactional ease is off-the-scale in all sorts of markets compared to where we were, even fewer than 20 years ago.

    And yet the CMA and Jason Furman, who led our review of competition between the Tech Giants, are right that the rules need to be considered and may need to change if competition is to perform its magic there too.

    Consumers may not feel the pinch when they click on that link for a cheaper credit card, but the card-issuer who has to recover the £100 that this click cost them on the search engine certainly does and will have to recover the cost from consumers somehow.

    The holiday-maker usually does not see any cost from booking the charming B&B by the seaside through TripAdvisor, but the couple who have to fork out the social media referral fees do have an interest in ensuring that market is competitive.

    Do consumers have effective control over their data and is what is done with it ultimately in their own interest?

    These various, potential harms are only just becoming headline news and we need to make sure that they do not drown out all the good that platforms have brought us and continue to bring us.

    The CMA has just launched a much-needed market study into digital advertising and Professor Furman recommended that we establish a “Digital Markets Unit” that will work to establish and enforce ex ante the principles by which we must shape these markets.

    I trust that the CMA’s analysis will provide some of the knowledge needed to establish the Digital Markets Unit. Some will, no doubt, groan at the suspicion that Government is trying to control cyberspace. There is no scarcity online.

    And that is the reverse of the intention because, it seems to me, that if people are unhappy with how some things are, we should be looking to make sure that level of trust and confidence is maintained. The vision of cyberspace has some connections with American frontier town of the late 19th Century. Cyberspace has followed, in some respects, a similar revolution. It was that very period of expansion and excitement brought with it some of the monopolies that gave rise that the development and the birth of anti-regulation as we know it.

    The power of railroad monopolies in the US led to the birth of anti-trust and sometimes accompanied by populist policies. So we need to make sure that what may have characteristics in digital platforms that could run the risk of sapping innovation, squeezing businesses and raising the prices of goods anticipates some of the problems that may arise. But consumer choice is just a click away, one might think, so what kind of monopoly do the giants really have?

    Here, I would just like to say that one of the best things to have happened in the understanding of markets in the last 10 years, and Martin Cave has written extensively on this, has been the rise of realistic views of how consumers actually behave and not just how they ought to behave.

    In the unfinished business in consumer markets, as well as in the new challenges posed by the oligopolies, and potential oligopolies of cyberspace, we need to guard against an overly-narrow conception of economics that I think has been part of the problem. Something that economics itself, I think, has made great strides in recent days in recognising.

    This is why I have asked, in my steer to the CMA that it makes sure that it update its methodological toolkit, so it’s not just relying on the old economic tools.

    New approaches that use huge, rich datasets, disciplines like behavioural economics, psychology and anthropology all have their part to play in understanding how markets actually work, rather than how regulators have too often hoped they would work.

    The CMA and other future-facing regulators like the FCA, Ofgem and the CAA are embracing these new tools and methodologies. I strongly welcome that and hope to see much more still.

    Let me now turn to competition and productivity.

    There are roughly four ways that changing the conditions of competition affects productivity.

    First there are the direct effects of competition eliminating unearned rents. Prices fall so the real amount each worker can buy with the value created by an hour of work increases. Our energy price cap, for example, means a single person on the minimum wage need work almost two days fewer to pay for their annual energy bill. This is a significant difference to many people in this country.

    What’s more, the people and equipment that were employed in the rent-seeking activity are liberated to do something more productive and that has knock-on effects. Taking unearned rents out of supply chains makes businesses that rely on those inputs more productive. They have more surplus to spread over capital and labour after all inputs have been covered.

    But against all these positive effects there is a potentially trickier relationship between competition and productivity, and specifically, incentives to innovate. Historically, the link between competition and innovation can sometimes be a paradoxical one.

    Patent law is meant to grant inventors temporary monopoly. In that respect, it is an “anti-competition” policy.

    There are good arguments to be had about whether patent today is working as it should, but what is clear is that all of us benefit when innovators are rewarded in this way.

    The Nobel prize-winning economist Bill Nordhaus estimated that innovators capture only about 3% of the value that they create. The rest, 97%, goes to society at large, for free. So, it’s strongly in our interest to back and reward innovation.

    That’s why so many elements of our Industrial Strategy put an emphasis on aligning all the strengths of companies, universities and government agencies.

    Innovation is so valuable that we’re happy to see coordination being delivered through public R&D investment, common Grand Challenges that bring together companies, universities, research institutions and businesses, sector deals to line-up the efforts providing common research centres, common infrastructure and investments in education.

    And traditional merger control needs to consider this delicate balance between competition and coordination. When a big pharma company buys the minnow with a promising molecule for a spectacular sum is it helping to get a valuable product to market or is it taking out potential competition against something it has on its own lab-bench? In the first case, a merger authority should OK the deal. In the second, in my view, it should say no.

    Jason Furman wondered about the same effect within Big Tech. When Facebook bought pre-revenue Instagram and WhatsApp for billions, which of these was it doing?

    If the power of innovation is to be fully realised for the general good, our approach to mergers must now ask these hard and detailed questions.

    I was very pleased to see the CMA doing so in its recent decision just last week to examine Amazon’s investment in Deliveroo.

    I’d like to finish this speech with some reflections on an absolutely foundational input which the CMA and this government have put a great deal of effort into improving, and that is audit. Again, one of the foundations of trust and reputation. Audit is the primary mechanism by which management’s assessment of how a business is doing gets challenged, verified and made public.

    We have reason, it seems to me, to have some concerns to be very concerned about the recent quality of audit, and to believe that this has wide repercussions on the performance of the whole economy.

    There have been the high-profile failures that have made headlines. The BHS pension liability, Carillion, of course, and Patisserie Valerie.

    But that’s not all.

    The Financial Reporting Council, our audit regulator, has just reported that one third of Price Waterhouse Cooper’s audits of FTSE 350 companies failed to meet the standard of “requiring only limited improvement”.

    Grant Thornton did even worse with only 50% of audits passing that threshold.

    Not a single top 4 firm met the FRC’s standard for 90% of audits last year.

    Perhaps, even more troubling from an assessment of the state of competition, the CMA found that, between 2014 and 2017 KPMG, for example, grew its market share while also scoring worst of the Big 4 in audit quality.

    And yet audit is a sector that should be ripe for disruptive innovation. Big data and AI could be transforming the practice.

    Without the pressures of competition, will this technology be produce an even better audit? A succession of independent analyses have drawn attention to a systematic problems. Sir John Kingman in the review that I asked him to perform of the sector, the BEIS select committee in their report, the Financial Reporting Council itself and the CMA in its market study – excellent and dependable audit is a public good, the whole economy benefits from the fact that businesses choose to establish themselves in a jurisdiction in which confidence in audit is secured.

    Capital is better allocated and at lower cost, the better quality information is.

    The wide array of users of company accounts, not just shareholders but customers, suppliers, employees, places and civil society organisations too, can all the better rely on complex chains of interdependence when the quality of audit is good.

    Solving the problem of audit quality can therefore bring great productivity benefits to the whole economy and make the UK an even better place to start and grow a business.

    Competition should be central to that.

    Company boards must have meaningful choice of auditors.

    We cannot run the risk of systemic over-reliance on just a few firms that could reduce further.

    The regulator needs to ensure that quality persists, despite the intrinsic problem of incentives in this market.

    So I am pleased to have two important announcements to be able to make today. First, is to announce the appoint of Sir Jonathan Thompson as the new Chief Executive of the Financial Reporting Council. Many of you will know that he has been the recent head of HMRC, someone with a strong and rigorous record.

    He will have the crucial task of transforming the organisation as it becomes the new and strengthened Audit, Reporting and Governance Authority, ARGA, created as recommended in Sir John Kingman’s review.

    And Second, I am publishing our consultation on the CMA’s, in my view, powerful and compelling package of recommendations.

    I believe that we need to act fast before another audit scandal makes headlines. I don’t believe that we should wait for the review that I have asked Sir Donald Brydon to perform on the purpose of audit. Whatever the answer to that question, the mechanism to reach it will necessarily be delivered through a well-functioning market and a strong regulator.

    But I would like to add this.

    The audit sector should be in no doubt about the need and the resolve to make these reforms.

    Audit quality must improve and we will do everything that’s needed.

    But the audit sector itself could do a great deal, now, voluntarily before any legislative change comes and I strongly urge them to do so.

    It is right, it is good for the economy and it will give the sector much more credibility in helping shape the regime of the future.

    Let me end as I started – with the weekend’s sporting triumphs.

    Here, according to the MCC’s rulebook is how we come to know with confidence that last Sunday’s score was actually the score that the umpires judged, and how cricket does its own version of audit, if you like. I quote:

    “Two scorers shall be appointed to record all runs […] …The scorers shall frequently check… …to ensure that their records agree.

    They shall agree with the umpires… …at least at every interval […]

    The scorers shall accept all instructions and signals… …given to them by the umpires… …and shall immediately acknowledge each separate signal.”

    It is subtle and instructive.

    It is suited to the particulars of the problem being solved.

    Like all rules that evolve to make competition really work, it embodies and distils volumes of collected experience, wisdom and judgement in practice.

    And just as Britain has led the world in codifying the rules of sport, as well as occasionally, and satisfyingly, winning at them, here I must mention for completeness the third of the weekend’s great sporting fixtures and salute the amazing performance of Lewis Hamilton at Silverstone.

    We should have every confidence that we should continue to lead in many ways the similar task, and in which we have long had a world-leading, international reputation of codifying and keeping the most innovative in the world, the rules of market and competition. It’s one of our strongest and proudest exports.

    The CMA, our regulators, government, our Parliament and our people collectively have the knowledge, pragmatism and experience to be winners at the economically crucial, global competition to design the rules of competition.

    Getting this right has a great prize attached, a Fourth Industrial Revolution with new technologies, new markets, new opportunities underpinned by confidence by consumers, by market participants. This is a future marked by prosperity for all, in all parts of the country.

  • Penny Mordaunt – 2019 Statement on Inappropriate Behaviour in the Armed Forces

    Below is the text of the statement made by Penny Mordaunt, the Secretary of State for Defence, in the House of Commons on 15 July 2019.

    In April of this year a report was commissioned to look into inappropriate behaviour in the armed forces. Our armed forces are the pride of our nation, and have a hard-won reputation here, and across the world.

    The report which was undertaken by Air Chief Marshal Mike Wigston, concluded that while the vast majority of military personnel serve with great honour and distinction, some unacceptable behaviour does occur. I am publishing the report today.

    I am accepting the recommendations of the report in full, including creating a defence authority to provide centralised oversight of their implementation. Detailed work on the design of this body and its responsibilities is now under way.

    We are examining the recommendations and ascertaining how we can prevent inappropriate behaviour in the first place, and where it does occur, deal with the perpetrators more effectively. Leadership is key to this approach at all levels of the services from the most senior to the most junior. Everyone has a role to play in setting and maintaining standards. Non-Commissioned Officers in particular are key in holding people to these standards and the values of their service. I am therefore, in addition to the findings of this report, looking to ensure all Non-Commissioned Officers have what they need to address poor behaviour when they see it.

    This will clearly take time, and I see today as the start of this work, not the end.

  • Damian Hinds – 2019 Statement on School Sport and Activity

    Below is the text of the statement made by Damian Hinds, the Secretary of State for Education, in the House of Commons on 15 July 2019.

    A positive experience of sport and physical activity at a young age can build a lifetime habit of participation. It is central to meeting the Government’s ambitions for a world-class education system which promotes character, good physical health and mental wellbeing. We face a significant challenge to increase and maintain activity levels among children and young people, particularly ​given the levels of childhood obesity. Data from Sport England’s Active Lives Children and Young People survey show that a third of children are currently doing less than 30 minutes of physical activity a day, less than half the amount recommended by the Chief Medical Officer.

    The Department for Education, Department for Digital, Culture, Media and Sport, and Department of Health and Social Care are today publishing a joint school sport and activity action plan which will set out the following ambitions:

    All children and young people take part in at least 60 minutes of physical activity every day.

    All children and young people have the opportunity to realise developmental, character- building experiences through sport, competition and active pursuits.

    All sport and physical activity provision for children and young people is designed around building basic skills as well as confidence, enjoyment, knowledge and understanding (known as physical literacy) with a focus on fun and enjoyment, and reaching the least active young people.

    The action plan will set out a number of immediate actions that feed into realising these ambitions, including a strong commitment to joint working between schools and the sport sector. The plan also sets out areas of activity for the future with action to be confirmed in a further updated plan later in the year, following the spending review.

    The immediate actions include a commitment to an additional £2.5 million from the Department for Education in 2019-20 to support schools through further work on teacher training, more help and advice to enable schools to open up their facilities and make links with providers, as well as providing more opportunities for young people to volunteer in sport. The plan also sets out over £4 million of Sport England investment in new after-school clubs, strengthening the school games competition and building girls’ confidence through a programme linked to ‘This Girl Can’.

    The Government are also committing to develop regional pilots to trial new and innovative approaches to getting young people active, jointly funded by Sport England and the Department for Education from 2020. The pilots will involve collaborative working from the school and community sector to offer a co-ordinated sport and physical activity experience for young people.

    We will be working with sporting organisations like the Youth Sport Trust, RFU, England Netball and the Premier League to ensure that sports clubs and programmes can reach even more children, encouraging them to get active by focusing on fun, enjoyment and increasing confidence.

  • Penny Mordaunt – 2019 Statement on the Office for Tackling Injustices

    Below is the text of the statement made by Penny Mordaunt, the Secretary of State for Defence, in the House of Commons on 15 July 2019.

    On Friday 12 July, the Prime Minister announced the creation of the Office for Tackling Injustices. This is a new organisation that will hold the Government and wider society to account for tackling key social injustices.

    Despite the great progress we have made in promoting fair treatment for all in the UK, we know that too many of our citizens are still held back by the injustice of ​unequal treatment on the grounds of their socio-economic background, ethnicity, gender, sexual orientation or disability.

    The Prime Minister has spoken of her determination to tackle these “burning injustices”. But all Governments should work to end the injustices that continue to characterise our country for too many. The Office for Tackling Injustices (OfTI) will focus minds on how to create a fairer country in the decades to come.

    By shining a light on data on injustices and monitoring change, the OfTI will provide evidence-based challenge to future Governments and wider society to tackle disparities in social and economic outcomes. Data is a hard, sometimes uncomfortable fact, but publishing it and communicating it clearly forces Government and others to hold a mirror up to their own performance and challenge themselves to do better.

    The OfTI will have a remit covering social injustices relating to ethnicity, gender, disability, socioeconomic background and LGBT. As well as annually delivering a data-driven report on progress to Parliament, the OfTI will also publish thematic studies into issues relevant to its mandate. It will make use of relevant published data from various public authorities, monitoring trends and considering the underlying causes and drivers for them.

  • Justin Tomlinson – 2019 Statement on Health Related Job Loss

    Below is the text of the statement made by Justin Tomlinson, the Minister for Disabled People, Health and Work in the House of Commons on 15 July 2019.

    I would like to make the following statement on behalf of myself and the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Thurrock (Jackie Doyle-Price).​

    Today, my Department, in partnership with the Department of Health and Social Care, will publish a consultation on proposals to reduce health-related job loss.

    As people live and work for longer, more employees are disabled or have long-term health conditions. There are significant and well evidenced benefits for employers, individuals and Government if health-related job loss can be reduced.

    For employers, offering flexibility, early support and occupational health advice are the key to successful retention. Employers are best placed to take the early preventative measures that are most effective. There are large variations in employers’ capability and capacity to act with large firms five times more likely to provide occupational health when compared to small firms.

    Each year more than 100,000 people leave their job following a period of sickness absence lasting at least four weeks. Survey evidence shows that 44% of people who had been off sick for a year then left employment altogether.​

    The proposals set out in this consultation include:

    Amending the legal framework to encourage workplace modifications and early action to support individuals on sickness absence leave;

    Reforming statutory sick pay so that it is better enforced, more flexible and covers the lowest paid and potentially, rewards effective action with a new rebate;

    Improving access to occupational health services with additional support for small employers including a potential subsidy;

    Government to provide best practice advice and support for employers on managing health and disability in the workplace.

    The evidence and views gathered during this consultation will be used to develop our proposals further and understand the impact of the changes on both employers and employees.

  • David Gauke – 2019 Speech on Sentencing

    Below is the text of the speech made by David Gauke, the Secretary of State for Justice, on 18 July 2019.

    It’s great to be here and can I thank Edelman for providing the venue and Social Market Foundation for hosting and thank you all for coming today.

    Gathered in this room there is a wealth of wisdom, expertise and experience of our justice system. You all share, as I do, a deep commitment and passion for reform to ensure justice in this country is delivered in an effective and fair way.

    I want to thank you for your dedication and for the valuable work you do and the different perspectives you bring.

    In my last major speech on justice reform in February, I spoke about how we need to look beyond prison, move away from short custodial sentences and towards more effective alternatives in the community that better target the causes of offending.

    Since then, we’ve continued to build the evidence base for what works and lay the groundwork for delivering that, for example, with fundamental reform of the probation system.

    Today, as we publish the latest set of research and statistics on reoffending, it seems timely to update you on the work we have been doing and to take stock of where we are and what, I believe, our direction of travel should be.

    Rehabilitation as the best route to reducing reoffending

    There is one stark fact facing us: three quarters of all crime that results in a caution or sentence happens because of reoffending.

    We must be fearless in dealing with this.

    Whilst long prison sentences will always be right for those who commit the most serious crimes, particularly of a violent or sexual nature, the fact is that the vast majority of all offenders will at some point be released. Most people who go to prison are there for a matter of months or weeks. Last year, for example, sentences of 12 months or less accounted for over two thirds of all immediate custodial sentences.

    I believe the public therefore expect the justice system to focus on rehabilitation to reduce the risk of subsequent offending – and the likelihood of them becoming a victim of crime.

    That means prison and serving a sentence is not an end in itself, but it is a means to an end, a means to make society safer. We need to punish for a purpose.

    Only by successfully rehabilitating offenders so they don’t commit a crime when they are released will we prevent more crime and more victims of crime.

    The new evidence

    When I became Justice Secretary in January 2018, I didn’t have a pre-conceived view on short sentences. But I wanted to see and understand the evidence.

    I wanted to know what the real cost of reoffending is to our society. Our new research today has found it is over £18 billion a year.

    I also wanted to know whether short prison sentences are actually the best way to keep us safe and prevent reoffending.

    The latest evidence suggests that if all offenders who currently receive prison sentences of less than six months were given a community order instead, we estimate that there would be around 32,000 fewer proven reoffences a year. That’s an estimated 13% fewer proven reoffences for this cohort.

    That’s not just a statistic, that’s thousands fewer actual victims; and it’s safer streets and safer communities.

    And I’ve wanted to understand why a particular group in society find themselves more likely to be moving in and out of prison again and again.

    Today’s research helps us to see past the offence to the person and the complex needs that contribute to keeping them trapped in a cycle of crime.

    Over two thirds of those in prison for six months or less have a drug misuse problem. 72% lack the skills and motivation to get or hold down a job. 60% do not have a stable or suitable place to live. These are the problems we need to address to have a meaningful impact on reoffending rates.

    But when offenders only serve short custodial sentences of up to six months, the median time spent in prison is just 6 weeks. This just isn’t enough time for any effective rehabilitation to take place to successfully tackle these problems.

    Ultimately, that short spell in prison doesn’t protect the public, doesn’t serve as much of a deterrent and exacerbates those already deep-rooted difficulties the individual faces.

    The research we have published today compared offenders who went to prison against a similar cohort who received a community order. For those with non-custodial sentences, we can do more to address these problems around addiction and housing and reduce the likelihood of reoffending.

    Moving away from short prison sentences

    So this latest research has further reinforced my view that moving away from prison sentences up to six months would deliver real and positive change, for the offenders to turn their lives around and for the safety of the public.

    There are different ways that you might achieve this: a bar to prevent the courts using them, or a less prescriptive presumption against their use. Or you could consider combining these options, applying a presumption to sentences of up to 12 months and with a bar for up to six months. I think there’s a strong case to explore this, given the evidence.

    But for any bar on short sentences, I’ve always said that there should be exceptions.

    Our first responsibility must be to the victims of crime and we should not do anything to compromise their safety. For this reason, I’d argue a bar should not apply to offences of physical or sexual assault, so that in the right cases courts will be able to impose a short prison sentence.

    Another consideration is upholding the authority of the court. There are several offences which involve a disregard for court orders or its authority, where the possibility of a short sentence should, in my view, be retained.

    For those repeat offenders who have been given community orders and who wilfully and persistently fail to comply with them, they need to know that they cannot get away with it with impunity. We must also ensure that we do not do anything that would put at risk the security of the wider public. We will need to consider, therefore, what other offences raise significant issues of public protection where a short prison sentence should continue to be an option. Given the acute problems with knife crime in cities like London, knife possession could be one such offence.

    I believe this is a balanced, considered and, crucially, evidence-based approach to sentencing policy. It will help reduce crime and result, therefore, in fewer victims of crime. And I would hope that the next Prime Minister would continue with this reform agenda.

    Probation reform

    However, crucial to the success of any reform of sentencing is a strong probation system. Two months ago, I announced plans to reform our probation system, which will allow for much more robust community sentences and that will command the confidence of the courts.

    We will be ending Community Rehabilitation Company contracts early and streamlining responsibilities for public, private and voluntary sector partners.

    That means a stronger role for the National Probation Service in managing all offenders, greater voluntary sector involvement in rehabilitation, and the private sector leading where it has specialist expertise and experience and where it can support innovation in rehabilitating offenders and organising Unpaid Work placements.

    A strengthened probation system will significantly improve the services that have been shown to help turn offenders away from crime – be it housing support, help finding a job, or help to turn away from drink or drugs or treat mental health issues.

    This will build confidence that conditions set by the courts are enforced when people leave prison, and that for those who receive community sentences, tough enforcement is paired with targeted support and services that tackle the root causes behind the crime.

    We have seen how partnership working at a local level can offer effective alternatives to custody. I’m keen to work with the judiciary and others in the criminal justice system to learn from, as well as pilot, alternatives to custody to inform our approach nationally.

    At the same time, we are successfully rolling out GPS tagging to better monitor offenders and make sure offenders are adhering to the terms of their sentence or licence conditions. The findings from the pilot we ran found that most offenders felt wearing a tag would help them make positive changes in their lives.

    Building on the success of this we are also planning to roll out a variation of this service for children in the autumn to support children in their efforts to turn their lives around.

    Technology, like GPS tagging, will help to give judges and magistrates more confidence to use community sentences in more cases.

    And I’m ambitious about what we can do in the future – using new technology and thinking innovatively about how we can both punish and rehabilitate in the community.

    Through our probation reforms – and with some bold thinking about what community sentences look like in the future – we will see a successful shift away from ineffective short prison sentences towards more effective ways of rehabilitating offenders.

    I hope that when it comes to a Spending Review in due course that funding effective community sentences is made a priority given the costs it can save down the line.

    Prison reform to rehabilitate

    Finally, I do think it’s important to recognise that prison will always be right for some people.

    So, we need safe, secure and decent prisons. Instigated with huge determination and energy by Rory Stewart, the then Prisons Minister, the Ten Prisons Project, has focussed on improving standards in some of our most challenged prisons, alongside securing extra urgent funding and measures to tackle drugs and violence across the estate and significantly increasing the number of prison officers.

    But we also need to create a real culture of rehabilitation and opportunity in prisons.

    For example, we are funding a pilot that will make befriending services available via in-cell telephony, with the aim of decreasing prisoner isolation, improving mental health and ultimately facilitating rehabilitation, in line with the findings of the Farmer review. We’ve also recently introduced a new approach to incentivising prisoners that helps them to make the right choices to get on the path to rehabilitation.

    And I was proud to launch the Education and Employment Strategy last year putting education, skills and jobs at the heart of prison regimes.

    As well as helping those in prison prepare for work, I have also been keen to remove barriers and tackle prejudice that ex-offenders all too often face in trying to get a job.

    As I announced this week, we intend to legislate so that for the first time, some sentences of more than four years will no longer have to be disclosed to employers after an appropriate period of time has passed.

    These are all important reforms of which I am very proud. They will, respectively and collectively, help make our prisons safer places where rehabilitation can take root and help provide opportunities for ex-offenders – simultaneously enriching our society and making us all safer.

    Conclusion

    The first duty of government is to keep its citizens safe. That includes tackling crime and reducing the number of victims of crime.

    Punishing criminal behaviour is a crucial part of doing that. Whether through prison, community sentences or fines, offenders must face justice. And justice works best when punishment and rehabilitation are balanced and the cycle of crime is broken.

    In doing this, we need to be guided by a clear assessment of the facts rather than saying what we think people want to hear. Today’s further research helps us to do that.

    Let me be clear: I don’t want to see softer justice; I want to deliver smarter justice where offenders serve sentences that punish but also make them less likely to reoffend.

    I believe that the approach that I’ve set out today – indeed the approach I have set out in the last 18 months – is one that is most likely to be effective in reducing reoffending and therefore reducing crime.

    I am aware that it is an approach that will not have universal support but I have taken great encouragement from the widespread support for an evidence-led, rehabilitative and humane agenda.

    It is my hope that in the years ahead – whoever has the privilege of being Justice Secretary – it is an approach that will be pursued with persistence and determination and courage. And that it will help deliver a safer and more civilised society.

  • Penny Mordaunt – 2019 Speech at the Air and Space Power Conference

    Below is the text of the speech made by Penny Mordaunt, the Secretary of State for Defence, at the Air and Space Power Conference on 18 July 2019.

    Firstly, I want to pay tribute to the Chief of the Air Staff and say thank you. When I first met Stephen I was MinAF and he helped shape the ambition that was in the 2015 SDSR.

    He secured that equipment programme but he has always known that it was secondary to investing, developing and looking after our people.

    Sir Stephen, the diversity of the force, the longevity of service, the excellence of the operation are testament to that. You understand the importance of this because you’ve seen just about every side of life there is to the RAF. Your father was in the RAF. You gained your pilot’s licence in the Air Cadets – how important that organisation has proved to be in the lives of so many! He went on to a most distinguished career winning the DFC and being knighted in the process, perhaps all of this made more special by his service at so many lower levels.

    Stephen, I share your priorities, which is why decent pay, an end to lawfare and a focus on forces families have formed much of my two months at the MOD as Secretary of State.

    We need the best people, we need diversity of thought and great leadership, to recognise, attract and retain talent, for personnel to be at their best.

    Training is incredibly important. But the RAF – like all the services – is about something much more – inspirational leadership. This is needed because the demands we make of our people are so great. We challenge them on all four axes – physically, spiritually, intellectually and yes, emotionally.

    You don’t need me to tell you that we live in changed times. It’s not enough that we have technical change, creating capabilities at lightning speed. It’s not enough that we have massive political change. This is as true domestically, as it is geopolitically. It’s not enough that we have massive economic change – with global flows of capital promoting multilateral mergers and acquisitions of our civilian support organisations. It’s no wonder that national governments with their bureaucratised, traditional structures are struggling to cope.

    I can’t stop any of these changes and nor can any of us. What I can say though is that national, governmental and commercial advantage all comes down to one thing – how fast and how adaptable our response is and how we are able to use the great strengths we have as a nation to project power and use our influence to best advantage.

    The challenge of this age is that the threats are complex, multilateral, asymmetric and constantly changing. Even the last SDSR underestimated the speed at which the threats we face today would develop. And that means the task facing our military is growing enormously.

    But the biggest threat to us is not the Russians or Daesh, but potentially, our own political thinking. Throughout history we’ve seen this. We know about the stagnation of the Western Front in World War One. The folly of fixed defences in World War Two. We’ve also seen the change from air-launched, strategic deterrents, to submarine-based ones. And the importance of combined service operations in recovering the Falklands.

    For each generation, the lesson must be learnt. Our forces implement our political thinking on the battlefield. If that thinking is outdated, then their weapons will be, too.

    When we’re not operating “hot” we lose the emphasis on adaption and innovation. We must ensure in “cooler” times we continue to learn and drive towards becoming even more effective and prepared. This applies as much to politics as it does to economics.

    Another threat to our forces is short-term financial thinking. And this is not just in the shortcomings of equipment. Investment in our military is a long-term investment in social mobility, in education, in industry, policing, medicine and international diplomacy. The MOD doesn’t have a KPI of Total Shareholder Returns because it’s balance sheets runs over decades. And Space is a perfect example of this. It underpins everything from the development of the computer chip to the internet.

    We owe our military so much – and not just because of the past. It’s also one of the most exciting places to be for the future. It’s also an investment in the pride our country feels today. To understand this, we need to be situationally fluent. We have to recognise that nationalist politics are returning us to the nation state at the same time as commercial economics are moving us in the opposite direction.

    Capital is becoming ever more international, while politics is becoming ever more local. I make no value judgment of this. I’m signpost, not a weathervane. It’s the supranational regional bodies receding, we’re returning back to the age of national resilience, but international cooperation remains vital. And if we’re to adapt to this new age we need to enhance our strategic thinking.

    We need to remember that while Defence keeps the peace, it, and all the components of our National security, also strengthens our global ties and helps our prosperity. So we must ensure that we assist the decision makers responsible for our national security.

    So much of the work of the intelligence services is reliant on the contributions that defence makes. In the future, I want our offer to be more comprehensive in this respect which is why I’ve recently introduced a new situational awareness briefing at the MODs weekly drumbeat, briefing Defence ministers…on what’s going on in the wider world.

    We need to be aware, not just of aggressive acts, or changes in territory or defence procurement. But in financial flows, mergers and acquisitions, markets, prices, health, human security and the resulting impact on our interests.

    Why? Because We’ve moved beyond hot wars or cold wars to a new age of ‘sombre’ wars conducted in the shadows, on the dark web, in the business world, space and often remote from what we’ve known of the battlefield. This remains invisible to our patrons most of the time. But it is we who operate in this zone on a daily basis who must ironically have the greatest vision for the future. We have also the greatest readiness.

    And part of that readiness requires our partnerships to be deeper and more long-term. So, we must take a new industrial approach to build tomorrow’s military success Earlier in my tenure, I outlined how we need to take our industrial partnership forward, to build on the learnings of carrier alliance, and on our operations. In my sea power speech I touched on Building British, buying British to get better at selling British…

    In my land power speech – I spoke of fusion of conventional capabilities with cyber…But more is needed if we are to be as nimble as we need to be in the future…Our new industrial strategy must recognise that nations who protect their commercial systems make them the ‘go-to’ places for business. Is it any wonder that there is a wholesale exodus of business from jurisdictions where Intellectual Property is routinely stolen?

    We are rightly concerned about protecting our goods in the Straits of Hormuz. But in the future data flows will exceed those of physical goods. How are we going to make sure we will protect those goods and that information? My vision is not just for a country which is at peace and where our people walk free from fear, but for a place where all rights of our citizens can be protected…intellectual property to online identity. Our democracy needs this. And if we are to compete around the world, then global Britain demands this.

    We must change Whitehall, our processes to protect the UK as an area in which to conduct business safely and free from interference. And we must join this up with HMGs wider objectives. We need to have orchestrated centres of excellence eg Where is drone HQ for this government? If we can’t say where, how do we know we’re making the most of the RnD funding, what we are investing – in each service, in each department, company or university? For each sector, I want us to have a clear understanding of how it fits with the UK’s prosperity agenda.

    So, I am looking at setting up a New entity in the Department to look at the spin offs from Research and Development in Defence

    And we should be a leading player in space. It won’t just help strengthen our industries. It’ll also provide an incredible opportunity to capture the imagination of a new generation and encourage them to get involved in aerospace.

    Fifty years on from the moon landings we’re seeing SpaceX and other private sector individuals and leaders coming into the sector and making use of the technology. From satellite launches to more ambitious projects. It’s no longer a matter of if, but when, the first humans will walk on Mars. And this year we might see the first routine tourist flights into space.

    Richard Branson is striving to lead that incredible development. Virgin Orbit has already pilots with astronaut wings. It’s currently undertaking pioneering research into launching small satellites into space from the wing of a Boeing 747.

    And just last week, Virgin Orbit completed a landmark ‘drop test’ of a rocket at 35,000 feet to test the separation of rocket and aircraft during launch. Science fiction is becoming science fact. One day I want to see RAF pilots earning their space wings and flying beyond the stratosphere.

    So today, I can announce we’re making a giant leap in that direction by working towards placing a Test Pilot into the Virgin Orbit programme. Sending a bold signal of Global Britain’s aspiration…and showing that if you join our RAF…you will join a service where you can become an aviator or an astronaut…where you will help push back the frontiers of space and create a launch pad to the stars.

    As discussed earlier, the successful military powers of the future are going to be the ones that most easily and quickly assimilate change to their advantage.

    Seven years ago, following Lord Levene’s review, we established Joint Forces Command. We understood that Defence needed a joint organisation to do the things the services individually could not. We realised too, we needed to strengthen the link between experience in operational theatres and top-level, decision-making.

    Since then, JFC has done an incredible job bringing together joint capabilities like medical services, training, intelligence, information systems and cyber operations. It’s work has stood the test of time. But our future Joint Organisation must step up to some new challenges…taking on greater responsibility as we adjust to the demands of the future contested environment.

    Today we’re seeing state and non-state actors alike operating in that ‘sombre’ zone below the threshold of war…unconstrained by previously accepted norms…using all tools in their armoury…and weaponising information… to catch us off guard to destabilise our societies and our support systems. If we’re to respond, we must have strategic integration across the five war fighting domains – land, air, sea, space and cyber.

    That’s why today I can announce that we’re transforming JFC into Strategic Command. Much more than just a name change…this will be a bespoke organisation…supporting Head Office…helping Defence think strategically…assisting our transformation programme…and taking responsibility for a range of strategic and defence-wide capabilities. Combined with its oversight of our global footprint, it will continue enabling our operations and providing critical advice on force development.

    I’ve spoken about the contested environment. And the threats that are intensifying across all domains. And in space, too.

    When Neil Armstrong and Buzz Aldrin first set foot on the moon some fifty years ago, operations in space seemed otherworldly. Yet today our Armed Forces depend upon space to provide them global communications, critical intelligence, surveillance and navigation tools, while satellites underpin our national banking, transport and communication networks. And our competitors are doing all they can to disrupt access to these services.

    China has tested hit-to-kill interceptor missiles increasing deadly debris and threatening every sovereign space enterprise. Russia is conducting sophisticated on-orbit activities…developing missile interceptors to threaten satellites and electronic warfare systems to jam satellite signals. And non-state actors and cyber hackers have the potential to scramble satellite data and manipulate earth observation data to gain advantage.

    The UK must be ready to face these dangers. And Defence must play its part. We can, and we will. But we know we cannot compete in this contested and dangerous world alone.

    This government has consistently said we must work more with our international partners. This will bring our unique skills in the UK and experience into closer alliances to multiply the effects we can have.

    That’s also why today I can announce we have become the first international partner in the US-led Operation Olympic Defender. This will be an international coalition formed to strengthen deterrence against hostile actors in space and prevent the spread of space debris in orbit. In the next 18 months, the UK will be sending eight people to the Combined Space Operations Center in California to support this operation.

    But space is not just fraught with incredible dangers, it’s also a domain of incredible opportunity that we must seize with both hands. So today I’m also announcing we’re investing £30m to launch a small satellite constellation within a year. These small, low orbiting satellites can be sent into space more cost-effectively than their predecessors and can be fixed or replaced more quickly. The programme will eventually see live high resolution video beamed directly into the cockpit of our aircraft providing pilots with unprecedented levels of battle awareness.

    To support this state-of-the-art system, the RAF has founded Team ARTEMIS, a transatlantic team of UK and US defence personnel to launch the constellation and undertake research into the wider military uses of small satellites. Given the vastness of the challenge, this might seem a relatively small-scale initiative. But effectively we’re planting the acorns from which the future oaks will grow. Critically, British industry is already a world-leader in these innovative technologies.

    Last year we invested £4.5 million in the Carbonite 2 spacecraft which has already sent detailed imagery and footage back to Earth from orbit. One UK company alone based in Surrey is making 40% of the world’s small satellites. So this is a bold statement by the MOD. Showing our determination to invest in our Global Britain, taking military capability further and faster and demonstrating our ambitions are not limited to the skies.

    So, the modern security environment is contested, congested, competitive and entangled. But the UK is changing. And defence is changing too. And, alongside our investment in space, we’re investing in air in a big way. Bringing more F-35s online and into the fight.

    But just as we’re not naïve about today’s threats, nor are we complacent about what’s to come. That’s why we are ahead of the pack in developing a new capability…the Tempest…that will take to the skies within the next two decades.

    Our Typhoons and F-35s will deter our enemies today. The Tempest will make them doubt their future. But, every part of the Defence machine, needs to keep pace with the modern world if we’re to keep deterring tomorrow’s dangers.

    Upgrading our Typhoons and arming them with Storm Shadow cruise missiles, Meteor air-to-air missiles and the Brimstone precision strike weapon is also part of this.

    I won’t go exhaustively through the complete inventory…it would take too long to list…but it’s worth touching on just some of the capabilities coming on stream.

    Poseidon Maritime Patrol aircraft…able to patrol thousands of miles of the North Atlantic without rest while bringing hundreds of jobs to that region.

    Our five E-7s…replacing our current E-3D Sentry…giving us the finest airborne early warning systems around. And within a year, swarming drones able to confuse and overwhelm enemy air defences.

    In other words, in the face of growing threats, we will continue to take the bold action that’s necessary. Investing now to stay ahead of the pace of technological acceleration – strengthening our strategic command of the battle space. Reinforcing our commitment to the space arena…and laying the foundations for our future industry…And by joining together with our allies to defend our sovereign interests – whether in the skies or in the upper atmosphere – making sure that…come what may…Britain will be ready to face the future confident of our success.

    So we need strategic thinking. We need true situational awareness. We need new strategic partnerships and a new industrial strategy. All fused by a new Strategic Command to deploy new capabilities.

    And we should remember that all our military personnel fight with weapon systems, but also the civilian structures, organisations and infrastructure we give them. All of this – all of it – is the product of a previous generation’s political thinking. So it’s not just helpful if the thinking is clear, joined-up and far-sighted. Young lives are depending on it, so the thinking better be more than good. It better be bloody brilliant.

  • Theresa May – 2019 Speech on the State of Politics

    Below is the text of the speech made by Theresa May, the Prime Minister, at Chatham House on 17 July 2019. It is expected to be the last keynote speech made by Theresa May in her role as Prime Minister.

    This will most likely be the last time I will speak at length as Prime Minister and I would like today to share some personal reflections on the state of politics in our country and around the world.

    I have lived politics for half a century. From stuffing envelopes for my local party in my school years to serving as a local councillor, fighting a by-election, winning a seat, to serving for 12 years on the opposition front bench, and for nine years in the Cabinet as Home Secretary and Prime Minister.

    Throughout that time, in every job I have done, I have been inspired by the enormous potential that working in politics and taking part in public life holds.

    The potential to serve your country, to improve peoples’ lives, and – in however big or small a way – to make the world a better place.

    Looking at our own country and the world of which we form a part, and there is great deal to feel optimistic about.

    Globally, over the last 30 years extreme poverty and child mortality have both been halved.

    Hundreds of millions of people are today living longer, happier and healthier lives than their grandparents could even have dreamed of.

    As a world, we have never cared more deeply about the ecology of our planet’s environment.

    From treating the earth as a collection of resources to be plundered, we have within a generation come to understand its fragile diversity and taken concerted action to conserve it.

    The UK is leading the way in that effort with our commitment to net zero emissions.

    Social attitudes in our country and many other western countries have transformed in recent decades.

    There are more women in senior positions today than at any time in history.

    When I was born, it was a crime to be a gay man, legal to discriminate on the basis of sex or race, and casual bigotry was a socially acceptable fact of daily life.

    All that has changed – and greatly for the better.

    There remains a long, long way to go to achieve what we should rightly seek – an economy, a society and a world that truly works for all of its people.

    Where everyone has the security of a safe home and enough to eat; the opportunity to get a good education and a satisfying job to support their family; and the freedom of thought, speech and action to do and be everything their talents and hard work fit them for.

    The generation of young people growing up today – in the UK and around the word – have it within their grasp to achieve more in the decades ahead than we today can imagine.

    They will have the chance to harness the great drivers of change in the world today – from artificial intelligence and the data economy; cleaner forms of energy and more efficient modes of transport; to the technological and medical advances that will extend and improve our quality of life.

    The twenty-first century has the potential to be a pivotal point in human history – when economic, social and technological progress reach a combined apogee with the benefits multiplied and with everyone enjoying a share.

    It will not come about without effort.

    We will all have to work hard – individually and collectively to reach that better future.

    Crucially, the full power and potential of a small, but strong and strategic state must be brought to bear in that effort, establishing and maintaining the legal and economic structures that allow a regulated free market to flourish.

    Co-ordinating its own interventions to maximum effect – supporting science and innovation, supplying crucial public services and infrastructure, leading and responding to social progress.

    At our best, that has been the story of the democratic century that we celebrated last year when we marked the first votes for women and working men in 1918.

    It has been democratic politics, an open market economy and the enduring values of free speech, the rule of law and a system of government founded on the concept of inviolable human rights that has provided the nexus of that progress in the past.

    And a healthy body politic will be essential to consolidating and extending that progress in the future.

    It is on that score that today we do have grounds for serious concern. Both domestically and internationally, in substance and in tone, I am worried about the state of politics.

    That worry stems from a conviction that the values on which all of our successes have been founded cannot be taken for granted.

    They may look to us as old as the hills, we might think that they will always be there, but establishing the superiority of those values over the alternatives was the hard work of centuries of sacrifice.

    And to ensure that liberal inheritance can endure for generations to come, we today have a responsibility to be active in conserving it.

    If we do not, we will all pay the price – rich and poor, strong and weak, powerful and powerless.

    As a politician, my decisions and actions have always been guided by that conviction.

    It used to be asked of applicants at Conservative candidate selection meetings, ‘are you a conviction politician or are you a pragmatist’?

    I have never accepted the distinction.

    Politics is the business of turning your convictions into reality to improve the lives of the people you serve.

    As a Conservative, I have never had any doubt about what I believe in – security, freedom and opportunity. Decency, moderation, patriotism. Conserving what is of value, but never shying away from change. Indeed, recognising that often change is the way to conserve. Believing in business but holding businesses to account if they break the rules. Backing ambition, aspiration and hard work. Protecting our Union of nations – and being prepared to act in its interest even if that means steering a difficult political course.

    And remaining always firmly rooted in the common ground of politics – where all great political parties should be.

    I didn’t write about those convictions in pamphlets or make many theoretical speeches about them.

    I have sought to put them into action.

    And actually getting things done rather than simply getting them said requires some qualities that have become unfashionable of late.

    One of them is a willingness to compromise. That does not mean compromising your values.

    It does not mean accepting the lowest common denominator or clinging to outmoded ideas out of apathy or fear.

    It means being driven by, and when necessary standing up for, your values and convictions.

    But doing so in the real world – in the arena of public life – where others are making their own case, pursuing their own interests.

    And where persuasion, teamwork and a willingness to make mutual concessions are needed to achieve an optimal outcome.

    That is politics at its best.

    The alternative is a politics of winners and losers, of absolutes and of perpetual strife – and that threatens us all.

    Today an inability to combine principles with pragmatism and make a compromise when required seems to have driven our whole political discourse down the wrong path.

    It has led to what is in effect a form of “absolutism” – one which believes that if you simply assert your view loud enough and long enough you will get your way in the end. Or that mobilising your own faction is more important than bringing others with you.

    This is coarsening our public debate. Some are losing the ability to disagree without demeaning the views of others.

    Online, technology allows people to express their anger and anxiety without filter or accountability. Aggressive assertions are made without regard to the facts or the complexities of an issue, in an environment where the most extreme views tend to be the most noticed.

    This descent of our debate into rancour and tribal bitterness – and in some cases even vile abuse at a criminal level – is corrosive for the democratic values which we should all be seeking to uphold. It risks closing down the space for reasoned debate and subverting the principle of freedom of speech.

    And this does not just create an unpleasant environment. Words have consequences – and ill words that go unchallenged are the first step on a continuum towards ill deeds – towards a much darker place where hatred and prejudice drive not only what people say but also what they do.

    This absolutism is not confined to British politics. It festers in politics all across the world. We see it in the rise of political parties on the far left and far right in Europe and beyond. And we see it in the increasingly adversarial nature of international relations, which some view as a zero sum game where one country can only gain if others lose. And where power, unconstrained by rules, is the only currency of value.

    This absolutism at home and abroad is the opposite of politics at its best. It refuses to accept that other points of view are reasonable. It ascribes bad motives to those taking those different views.

    And it views anything less than 100 per cent of what you want all the time as evidence of failure, when success in fact means achieving the optimum outcome in any given circumstance.

    The sustainability of modern politics derives not from an uncompromising absolutism but rather through the painstaking marking out of a common ground.

    That doesn’t mean abandoning our principles – far from it. It means delivering on them with the consent of people on all sides of the debate, so they can ultimately accept the legitimacy of what is being done, even if it may not be the outcome they would initially have preferred.

    That is how social progress and international agreement was forged in the years after the Second World War – both at home with the establishment of an enduring National Health Service and, internationally, with the creation of an international order based on agreed rules and multilateral institutions.

    Consider, for example, the story of the NHS. The Beveridge Report was commissioned by a Coalition Government.

    The Health Minister who published the first White Paper outlining the principles of a comprehensive and free health service was a Conservative.

    A Labour Government then created the NHS – engaging in fierce controversy both with the doctors who would work for the NHS, and with a Conservative opposition in the House of Commons which supported the principles of an NHS, but disagreed with the methods.

    But the story does not end there. Just three years after the NHS was founded, Churchill’s newly elected Conservative Government was faced with a choice, a choice between going back over old arguments or accepting the legitimacy of what had been done and building on it.

    They chose to build on what had been established.

    Today, because people were willing to compromise, we have an NHS to be proud of – an institution which unites our country.

    Similarly, on the international stage, many of the agreements that underpinned the establishment of the rules-based international order in the aftermath of the Second World War were reached by pragmatism and compromise.

    The San Francisco Conference, which adopted the United Nations Charter – the cornerstone of international law – almost broke down over Soviet insistence that the Security Council veto should apply not just to Council resolutions and decisions, but even to whether the Council should discuss a matter.

    It was only a personal mission to Stalin in Moscow from US President Truman’s envoy Harry Hopkins that persuaded the Soviets to back down.

    Many States who were not Permanent Members of the Security Council did not want the veto to exist at all. But they compromised and signed the Charter because of the bigger prize it represented – a global system which enfranchised the people of the world with new rights, until then only recognisable to citizens in countries like ours.

    It’s easy now to assume that these landmark agreements which helped created the international order will always hold – that they are as permanent as the hills.

    But turning ideals into practical agreements was hard fought. And we cannot be complacent about ensuring that they endure.

    Indeed, the current failure to combine principles with pragmatism and compromise inevitably risks undermining them.

    We are living through a period of profound change and insecurity. The forces of globalisation and the pursuit of free markets have brought unprecedented levels of wealth and opportunity for the country and for the world at large. But not everyone is reaping the benefits.

    The march of technology is expanding the possibilities for humanity in ways that once could never have been conceived. But it is changing the nature of the workplace and the types of jobs that people will do. More and more working people are feeling anxious over whether they and their children and grandchildren will have the skills and the opportunities to get on.

    And although the problems were building before the financial crisis, that event brought years of hardship from which we are only now emerging.

    Populist movements have seized the opportunity to capitalise on that vacuum. They have embraced the politics of division; identifying the enemies to blame for our problems and offering apparently easy answers.

    In doing so, they promote a polarised politics which views the world through the prism of “us” and “them” – a prism of winners and losers, which views compromise and cooperation through international institutions as signs of weakness not strength.

    President Putin expressed this sentiment clearly on the eve of the G20 summit in Japan, when he said that the “liberal idea has become obsolete”…because it has “come into conflict with the interests of the overwhelming majority of the population.”

    This is a cynical falsehood. No one comparing the quality of life or economic success of liberal democracies like the UK, France and Germany to that of the Russian Federation would conclude that our system is obsolete. But the fact that he feels emboldened to utter it today indicates the challenge we face as we seek to defend our values.

    So if we are to stand up for these values that are fundamental to our way of life, we need to rebuild support for them by addressing people’s legitimate concerns through actual solutions that can command public consent, rather than populist promises that in the end are not solutions at all.

    In doing so, we need to show that, from the local to the global, a politics of pragmatic conviction that is unafraid of compromise and co-operation is the best way in which politics can sustainably meet the challenges we face.

    We know it is free and competitive markets that drive the innovation, creativity and risk-taking that have enabled so many of the great advances of our time. We know it is business that pioneers the industries of the future, secures the investment on which that future depends, and creates jobs and livelihoods for families up and down our country.

    And we know that free enterprise can also play a crucial role in helping to meet some of the greatest social challenges of our time – from contributing to the sustainability of our planet to generating new growth and new hope in areas of our country that have been left behind for too long.

    But you do not protect the concept of free market capitalism by failing to respond to the legitimate concerns of those who are not feeling its full benefits. You protect free market capitalism and all the benefits it can bring by reforming it so that it works for everyone.

    That is why I have introduced reforms to working practice and workers’ rights to reflect the changes in our economy. It is why I launched the Taylor Review into modern forms of employment like the gig economy – and why we are delivering the biggest improvements in UK workers’ rights for twenty years in response to it.

    It is why I have advanced changes in corporate governance – because business must not only be about commercial success but about bringing wider benefits to the whole of our society too.

    And it is why we have put in place a Modern Industrial Strategy – a strategic partnership between business and government to make the long-term decisions that will ensure the success of our economy. But crucially, a strategy to ensure that as we develop the industries of the future, so the benefits of the trade and growth they will give rise to will reach working people – not just in some parts of the country, but in every part of our country.

    These are steps rooted in my Conservative political convictions. They are not a rejection of free enterprise. But rather they are the very way to restore the popular legitimacy of free enterprise and make it work for everyone.

    I believe that taking such an approach is also how we resolve the Brexit impasse.

    The only way to do so is to deliver on the outcome of the vote in 2016. And there is no greater regret for me than that I could not do so.

    But whatever path we take must be sustainable for the long-term – so that delivering Brexit brings our country back together.

    That has to mean some kind of compromise.

    Some argue I should have taken the United Kingdom out of the European Union with no deal on 29th March. Some wanted a purer version of Brexit. Others to find a way of stopping it altogether.

    But most people across our country had a preference for getting it done with a deal. And I believe the strength of the deal I negotiated was that it delivered on the vote of the referendum to leave the European Union, while also responding to the concerns of those who had voted to remain.

    The problem was that when it came time for Parliament to ratify the deal, our politics retreated back into its binary pre-referendum positions – a winner takes all approach to leaving or remaining.

    And when opinions have become polarised – and driven by ideology – it becomes incredibly hard for a compromise to become a rallying point.

    The spirit of compromise in the common interest is also crucial in meeting some of the greatest global challenges of our time – from responsibly harnessing the huge potential of digital technology to tackling climate change; and from preventing the further proliferation of nuclear weapons to upholding and strengthening international rules in the face of hostile states.

    During my premiership, the UK has led the way both domestically and internationally in seeking a new settlement which ensures the internet remains a driver of growth and opportunity – but also that internet companies respond more comprehensively to reasonable and legitimate demands that they take their wider responsibilities to society more seriously.

    That is why we are legislating in the UK to create a legal duty of care on internet companies, backed up by an independent regulator with the power to enforce its decisions.

    We are the first country to put forward such a comprehensive approach, but it is not enough to act alone.

    Ultimately we need a realistic global approach that achieves the right balance between protecting the individual freedoms of those using the internet – while also keeping them safe from harm.

    That also holds the key to further progress in the fight to protect our planet.

    Here in the UK we have recently built on the 2008 Climate Change Act by becoming the first major economy to agree a landmark net zero target that will end our contribution to climate change by 2050.

    Of course, there were some who wanted us not just to make that net zero commitment but to bring it forward even earlier. And there are others who still question the science of climate change or the economic costs of tackling it.

    But we were able to come together to agree a target that is supported across the political spectrum, across business and civil society – and which is both ambitious and also deliverable.

    Just as the nations of the world were able to come together and agree the historic Paris Agreement of 2015, a settlement which if unravelled would damage us all and our planet.

    And just as we seek to protect the hard fought Paris Climate Agreement, so I also believe we must protect the similarly hard fought JCPOA – the nuclear deal with Iran, whatever its challenges.

    Once again it took painstaking pragmatism and compromise to strike that deal.

    Of course, there are those who fear a reduction in sanctions on a country that continues to pursue destabilising activity across the region, and we should address that activity head on.

    But whether we like it or not a compromise deal remains the best way to get the outcome we all still ultimately seek – to prevent Iran from acquiring a nuclear weapon, and to preserve the stability of the region.

    Being prepared to compromise also means knowing when not to compromise – and when our values are under threat we must always be willing to stand firm. Just as we did when Russia deployed a deadly nerve agent on the streets of Salisbury, and I led international action across the world to expel more than 100 Russian intelligence officers – the largest collective expulsion of Russian intelligence officers in history.

    We are here today at St James’ Square – the location from which Dwight Eisenhower led the planning for D-Day. And it was standing on the beaches of Normandy with other world leaders last month – remembering together all that was given in defence of our liberty and our values – that most inspired me to come here today to give this speech.

    Eisenhower once wrote: “People talk about the middle of the road as though it were unacceptable…Things are not all black and white. There have to be compromises. The middle of the road is all of the usable surface. The extremes, right and left, are in the gutters.”

    I believe that seeking the common ground and being prepared to make compromises in order to make progress does not entail a rejection of our values and convictions by one iota, rather it is precisely the way to defend them.

    Not by making promises you cannot keep, or by just telling people what you think they want to hear. But by addressing the concerns people genuinely hold and showing that co-operation not absolutism is the only way to deliver for everyone.

    For the future, if we can recapture the spirit of common purpose – as I believe we must – then we can be optimistic about what together we can achieve.

    We can find the common ground that will enable us to forge new, innovative global agreements on the most crucial challenges of our time – from protecting our planet to harnessing the power of technology for good.

    We can renew popular support for liberal democratic values and international co-operation.

    And in so doing, we can secure our freedom, our prosperity and our ability to live together peacefully now and for generations to come.

  • Roberta Blackman-Woods – 2019 Speech on Town and Country Planning

    Below is the text of the speech made by Roberta Blackman-Woods, the Labour MP for the City of Durham, in the House of Commons on 15 July 2019.

    I thank the Minister for his outline of this statutory instrument. The important first part of the SI ensures that the fee regime set out in the 2012 regulations is able to continue. Secondly, and perhaps more controversially, the SI amends regulation 14 of the 2012 regulations to include a £96 fee for an application for prior approval to build a larger rear extension to a dwelling house without the need for a full planning application to be made.

    The Opposition do not seek to prevent the 2012 regulations from continuing, but we point the Government to their own consultation on devolving fee setting to local authorities. It would be good to have an explanation as to why the Government have failed to act on the outcome of their planning consultation, particularly on full cost recovery. As the Minister will know, the consultation found that there were substantial cross-party concerns that local authority planning departments do not have sufficient resources to provide an effective and wide-ranging service. The majority of respondents from all sectors supported increasing planning fees beyond the 20% increase already given by Government, often citing concerns about the low level of resourcing in local authority planning departments.

    There are issues with local fee setting, as it may help resource planning departments better in areas of high growth but does little for those where development is more difficult to achieve. Nevertheless, the issue of getting more money to planning needs to be resolved urgently. Labour’s planning commission has found that poor resourcing of planning departments is the most significant issue raised by communities, planners and developers alike. The Government need to set out clearly what they are going to do to ensure that all planning departments are properly funded.

    Total expenditure on planning has fallen by almost 20% since 2010. That fall would be far higher were it not for the fact that spending has been propped up by a 50% rise in planning income. If we remove income from the equation, total net expenditure on planning has fallen by 42% on average, and by up to 60% in some regions, and that of course has led to a huge reduction in the number of public sector planners. In a recent report, the Royal Town Planning Institute showed that when a high number of applications are permitted, with fewer resources committed to each, the main loser may be local communities. Another crucial issue is that planning officers may, as a consequence, have less time truly to engage communities. The impact of austerity on planning is felt keenly by planning officers, who have to operate with fewer resources and to deal with the public dissatisfaction that can arise from that. It would be useful to hear how the Minister intends to address that issue.​

    The second part of the SI causes significant problems for us and, we think, for the country at large. Since 2013 Labour has been consistently against the ever increasing moves by the Government to replace proper planning permission with permitted development. The fee proposed here, £96 for prior approval for a large extension, is derisory. Large extensions, as the Minister should know from his mailbag, often cause considerable problems for neighbours and the issues involved can be complex, necessitating a great deal of work by local planning officers which will not be covered by the £96 fee by any stretch of the imagination. Large extensions should have to obtain planning permission, and bypassing communities with greater use of permitted development is just wrong.

    A recent report from Shelter has made clear the enormous damage the ever increasing use of permitted development has had on the quality of our built environment, highlighting that local authorities can turn down PDR developments only in very limited circumstances, and cannot require social housing contributions or enforce space standards covering minimum sizes, leading to the delivery of rabbit-hutch homes. PDR allows developers to build the slums of the future.

    An open letter from the Local Government Association in January 2019 made clear the extensive problems caused by permitted development, as did the large number of people who responded to the Government’s consultation on the extension to permitted development rights just recently. That includes the loss of more than 10,000 affordable homes in the last three years.

    We think that the time is long overdue for the Government to get rid of permitted development and ensure proper planning and decent quality homes through the planning determination system and enabling local authorities to charge on a cost-recovery basis. Planners do a difficult and at times a controversial job, and it is time for the Government to resource the system properly.