Below is the text of the statement made by Liz Truss, the Chief Secretary to the Treasury, in the House of Commons on 25 March 2019.
Article 121 of the treaty on the functioning of the European Union (TFEU) requires the UK to send an annual convergence programme to the European Commission reporting upon its fiscal situation and policies. The United Kingdom will continue to apply the acquis so long as it remains a member state and, as set out in the withdrawal agreement, for the duration of the implementation period, if the withdrawal agreement is ratified by both the UK and EU.
The UK’s convergence programme will be sent to the European Commission by 30 April. This deadline was set in accordance with the European semester timetable for both convergence and national reform programmes.
Section 5 of the European Communities (Amendment) Act 1993 requires that the content of the convergence programme must be drawn from an assessment of the UK’s economic and budgetary position which has been presented to Parliament by the Government for its approval. This assessment is based on the autumn Budget 2018 report and the most recent Office for Budget Responsibility’s “Economic and Fiscal Outlook” and it is this content, not the convergence programme itself, which requires the approval of the House for the purposes of the Act.
Article 121, along with article 126 of the TFEU, is the legal basis for the stability and growth pact, which is the co-ordination mechanism for EU fiscal policies and requires member states to avoid excessive Government deficits. Although the UK participates in the stability and growth pact, by virtue of its protocol to the treaty opting out of the euro, it is only required to “endeavour to avoid” excessive deficits. Unlike the euro area member states, the UK is not subject to sanctions at any stage of the European semester process.
Subject to the progress of parliamentary business, debates will be held soon in both the House of Commons and the House of Lords, in order for both Houses to approve this assessment before the convergence programme is sent to the Commission. I will deposit a copy of a document to inform these debates in the Libraries of both Houses and copies will be available through the Vote Office and Printed Paper Office in advance of the debates.
The UK’s convergence programme will be available electronically via HM Treasury’s website prior to it being sent to the European Commission.
Below is the text of the speech made by Liz Truss, the Chief Secretary to the Treasury, on 19 March 2019.
2019 is a massive year for British politics
And not just because it’s the year I joined Taylor Swift’s squad.
As we leave the European Union, we have an opportunity to set out a new economic agenda.
We’re leaving the era of post-crash consolidation and recovery.
And we’re entering a new era of growth and opportunity for Britain.
When we reach out to a much wider world…
…we are friends and rivals pushing us all to greater heights.
This will be a year of change and renewal for Britain.
Leaving the European Union with the Prime Minister’s Brexit deal gives us back control over our money, laws and borders.
And we should use this opportunity to think about the future.
This year’s Spending Review, where we will set budgets from 2020 through to 2023, allows us to make a real and lasting impact.
We will have the power to modernise the state, making it sleeker, more effective and better value for the people it serves.
We have got a big opportunity to unleash economic growth, as well as the potential of everyone in the country – giving them the chance to take control of their own lives.
We should be guided by three principles.
First of all, we should focus on people’s priorities not the blob of vested interests.
Second, for a free market economy to succeed – everyone must have a shot.
Third, the state should help people on the margins take control of their own lives – not tell capable citizens what to do.
I start from the principle that every pound in the exchequer is money that somebody has worked hard to earn.
That means we have a responsibility to make sure that public money is spent on public priorities, not those of vested interests.
But there is a growing blob of lobbyists, corporations, quangos and professional bodies who ask again and again for Government favours – arguing that they are the exception, that their cause deserves special treatment.
But if we gave in to all their demands, what would we squeeze out? And should they be taking money from those on relatively low earnings, who could be spending it on a new car, a holiday, or a treat for their children?
I want to make sure that the Spending Review works for people right across our country, from Plymouth to Perth and Darlington to Dereham – people that go to work every day and don’t have the time or money or inclination to hang around Whitehall.
This should be the People’s Spending Review.
That’s why I’m travelling around the country asking the public what their priorities really are.
So far, I’ve been in Felixstowe, Walsall and Tadcaster.
People have told me they want money focussed on core public services – the police, education, roads, defence and the NHS
We have already started on this. The Prime Minister and the Chancellor increased spending on the health service – with a £33.9 billion annual cash increase by 2023/24 – making it the government’s No. 1 spending priority.
And we’re also making sure the health service reduces waste so that more money is spent on the front line.
That is the approach we’re going to take across the Spending Review – making sure we’re prioritising the core services that people want.
People are also very clear that they don’t want to see the government waste taxpayers’ money.
Let’s not forget how angry people get when politicians get this wrong. This waste betrayed contempt for the taxpayer, and damaged their faith in politicians.
We must never go there again. It’s still underappreciated in politics how much people hate their money being frittered away.
The public have little truck with the nanny state or with vanity projects.
They don’t want their hard-earned cash spent on announcements designed purely to get column inches.
Or on billboards that brag about the government’s generosity. They don’t want to hear that their money is used for corporate subsidies. Or to prop up zombie industries. Or to be told exactly how much to eat or how much to exercise.
Support for business spread over numerous government departments including tax credits, costing around £18 billion.
Across the board there were hundreds of opaque organisations with ill-defined aims demanding public money for their latest pet project…
…erecting barriers and piles of bureaucracy and admin.
We have reduced the number of quangos from 561 in 2013, to 305 in 2017.
But it is still the case that the administration budget of these bodies costs us £2.5 billion.
And that too many hard-working public servants and business people are spending their time filling in forms and applying for grants.
There are those prophets of doom who say the size of the state must inexorably grow. But, as we leave the EU, I’d point to some of those countries we are now competing with.
Countries like South Korea and Japan show that it is perfectly possible to fund the services people care about while keeping taxes low…
…the way to do it is to grow the economy – just as we have for the past nine years…
…so that we have more pie to share out.
And at the same time prioritise ruthlessly – keeping the people’s interests at heart.
We will do this during the Spending Review.
In the zero-based capital review, we will look at the major projects we are investing in, and asking whether they are really working for us – whether they are having positive effects on growth and the wealth and wellbeing of individual people.
We need to make sure we are upgrading and maintaining our public realm, while also focusing on the less sexy projects – the nitty gritty that has a high return on investment. One example is local transport around our cities and counties – the journey into work each day that really affects everyone’s lives.
It was one of the top priorities for people I met. They want the local roads fixed and not to have to sit in a traffic jam. They want a less crowded commute into work. They want the basics sorted.
British cities lag our continental neighbours in terms of local public transport connections. Leeds is the biggest city in Europe without a mass transit system. (Don’t I know it from my time spent on the no. 19 bus.) And the two most congested commuter lines in the country are the train lines going in to Manchester.
Birmingham, meanwhile, has a Metro with just one line, whereas Lyon, a city half the size, has four.
It means that the people in the city have to rely on slow buses that get stuck in traffic.
And in effect creates a barrier that stops people commuting in from the suburbs.
A study from CityMetric shows that Birmingham’s productivity is 33% lower than a city of its size should be – in large part because of its poor cross-city transport.
That’s why we have funded Andy Street, the inspirational Mayor of the West Midlands, to the tune of £400 million to improve and extend the city’s Metro.
Projects for commuter line improvements and local roads generally have a much higher return on investment than long distance routes. That’s why we created the £2.5 billion Transforming Cities fund – because we know that these are the sorts of projects that make a real difference to productivity, and to people’s lives.
By focusing on the core services that matter to the public, we can boost growth – both personal and economic.
And we can do so while keeping taxes low – which means that people have more freedom to spend on their own priorities, and more of a stake in their own future.
We’re opening up opportunities for people across Britain.
Thanks to our policies:
More children from low income backgrounds are now going to university.
More young people are setting up businesses.
We’ve got fewer workless households than ever before
And because we’ve cut stamp duty, over half of new homes are being bought by first time buyers
But we must go further, if we are to grow our economy.
To be a successful popular free market economy – everyone has to have a shot at success.
I came into politics because I want Britain to be a success story and that means everyone in the country being a success story.
Everyone, regardless of their background, has to believe that they can be a successful business person, a judge, or even a leading politician.
I came from a comprehensive, went on to Oxford University and became a Cabinet minister.
But I was very lucky in having great parents and good teachers – things in my early life that gave me the opportunity to go far.
Not everyone has that, and success in life should not be a fluke of circumstance.
A fully functioning free market depends on the success of new entrants generating new ideas.
So we have to crack down on any entrenched privileges that stop talented people coming through.
It’s still the case that eight schools get as many students into Oxbridge as three quarters of all schools put together.
It’s still the case that seven in ten senior judges are the product of a private education, ten times the proportion in the general public.
It’s still the case that 90% of Venture Capital funding deals in the UK go to all-male teams.
And it’s still the case that – because of our restrictive planning system people are paying a greater proportion of their income in housing than ever before.
In 1947 people were paying less than an eighth of their total expenditure on housing – now it’s over a quarter. And people who rent in London are spending half their income on rent.
If we don’t deal with these entrenched barriers, it will undermine people’s faith in our economic model.These barriers cost us all dearly.
They block people’s path to success, stopping them get the education, the job and the home that their efforts deserve.
And the public pay the penalty twice over.
Because they have to pay higher taxes to paper over the cracks:
Next year we will spend £34 billion on housing support, over £1 billion in support for the fuel poor, and over £17 billion on out of work benefits.
All of that comes from taxpayer’s pockets, so it’s in all our interests to eradicate these barriers.
Inside every one of us are aspirations and dreams.
And the role of government shouldn’t be doing things on people’s behalf like an overbearing helicopter parent. It should be clearing the barriers to their success.
So how do we do this?
Finland carried out a trial in 2017 to see if universal basic income could solve their high unemployment rate.
But, after giving a random sample of 2,000 people €560 a month to do what they liked, they found they were no more likely to find work.
The programme removed the incentive to work and earn.
And the OECD warned them that in order to expand the programme across the country, they would need to increase income tax by nearly 30%.
After all the fanfare, the promise of free money for all was revealed to be as expensive as it was ineffective.
In the UK, just as in Finland, the answer is to create a truly free market, in which everyone has a chance.
Where everyone has a chance to work – the best route out of poverty.
And not just work, but succeed – to move in and move up.
And that means identifying the barriers to success, and taking them away.
What people need is not handouts or Universal Basic Income, but the Universal Basic Infrastructure of life.
The foundations of living a full life in a modern free enterprise country.
Foundations that give people the chance to get where they want to go.
Access to good education…a good home with fast internet…and good transport links to get to a good job.
That’s why we have reformed the welfare system to get people off benefits and into work…
…and we’re also investing in capital at a 40-year high, as the Chancellor reiterated at the Spring Statement.
As we improve rail, roads and fibre right across the country, we’ll be guided by our industrial strategy, and use our zero-based review to make sure we are getting maximum value for the public.
We’re also transforming education with our academy and free schools programme.
And in housing, we’re reforming our planning system, just as places like France, Germany and Japan have.
I’m delighted that James Brokenshire is soon launching his planning green paper – I look forward to seeing what’s in there.
At the Spending Review we’re going to look at every bit of spending and make sure it is delivering for everyone regardless of their background.
To make sure that everyone has that Universal Basic Infrastructure to be successful.
There are people who talk down success.
They demonise profit.
They believe any one person’s triumph must come with another’s failure.
They are wrong and they damage the prospects for those one lower incomes by taking the ladder away.
Success is not a zero-sum game. If we get the conditions right, it’s there for everyone to grasp.
If we give everyone the platform for success, and the chance to run their own business, or work in someone else’s…
…we will help people achieve their potential, solve social problems, and increase economic growth.
But we also need to recognise that there are some people who will not yet be capable of using this platform.
Perhaps because they are struggling with health conditions or addiction. Or because they have missed out on a basic education.
Or because they have been traumatised and left in despair after suffering the consequences of crime.
And it should be government’s responsibility to prioritise support for these people – helping those on the margins move to a position where they can take control of their lives.
And to stop any more people getting into that position in the first place.
It’s a simple idea: that we should spend more on the areas which have the biggest impact, and less on those that don’t.
And it points towards the moral case for proper public spending control.
That every pound wasted on a pet project could have been used to change someone’s life.
Giving more children in care the best start in life.
Or more support to help disabled people get into work.
Additional focus on preventing grooming and child sexual exploitation, so that more girls in places like Rotherham and Oxford don’t see their futures taken away from them.
Targeting spending towards those who genuinely cannot do without the state’s help is the way to spend money well.
I saw how the No Wrong Door programme in North Yorkshire provides a loving family like environment for the children in their care. I spoke to a young man there who had now got a job but came back regularly because he knew they were looking out for him. This programme has reduced crime and improved health but most importantly it’s giving these children a lodestar in their life – encouragement to succeed.
We are rolling out up to 20 more programmes like this and will be looking at this area in the Spending Review.
I’m a great believer that we should not tell capable adults what to do. And that we all need the freedom to make decisions, good or bad, and live our own lives.
But we all have a duty of care to make sure that children growing up in Britain have the best start in life.
In this country, we spend just over £3,000 per pupil in early years, just under £5,000 in primary, just over £6,000 in secondary, and we contribute approximately £6,500 to students’ university education.
The academic evidence shows that when it comes to intervention the earlier the better. Professor James Heckman argues that focusing investment between birth and the age of five “creates better education, health, social and economic outcomes that reduce the need for costly social spending”.
Of course, shifting funding towards earlier intervention is difficult. This requires us to be patient. Too often we question why a policy hasn’t worked immediately.
Take our phonics scheme, which has helped our nine-year olds us rocket up the European literacy rankings, and proved one of our biggest policy successes of recent times – championed by Nick Gibb.
The benefits will be felt most in 10-20 years’ time, when these children are entering the world of work and starting their own families.
These children are not yet in secondary school, much less the jobs market.
But in the future, we’ll have more independent adults able to succeed.
And so this is exactly the sort of long-term policy the government should be supporting.
That’s why we we’re working with the Office of National Statistics on valuing Human Capital.
This sounds like a dry concept, but what we’re really talking about is how do we maximise everyone’s opportunities – how do we give everyone the best chance of living a healthy, successful life.
Using this as a lens for the Spending Review will help direct resources to improve people’s opportunities while keeping taxes low.
We will constantly ask ourselves the consequences of our spending decisions on people’s lives – not just in the here and now… but long into the future.
By cutting out unnecessary activities that drive up costs for the government…
…we can cut taxes so that people can keep more of their own money…
…make sure everyone in Britain has the basis of success…
…and afford to help the most vulnerable.
For the first time in many years, we have the power to make positive decisions. We’ve got choices.
We’re throwing off the constraints of the post-financial crash world.
And the constraints of the European Union.
We’re now in a position to make Britain a success story into the future.
By growing the economy, and realising the potential of everyone in our country.
Below is the text of the speech made by Liz Truss, the Chief Secretary to the Treasury, on 27 February 2019.
It is brilliant to be here this morning with such an amazing view.
I do believe that we are fundamentally an enterprising nation and that is one of the many things that’s exciting about Britain.
Sometimes to appreciate your own country you have to travel overseas. Recently I did a trip to Korea and Japan and they were saying to me, “How can we get the same kind of start-up culture that you have in Britain?”, “How can we attract that investment in early stage businesses? or “How can we have that energy that we see every time we come to London?”
I think we’ve got to appreciate what we’ve got, and in the last year there’s been a 5% increase in business registrations.
The momentum hasn’t stopped. What is also very interesting is the attitudes of generations that are under 21.
They’re more likely to want to start up a business than previous generations and they’re doing it in droves, as we’ve seen an 85% increase in 18 to 24 year olds setting up businesses just in the last three years alone.
I had a group of those businesses called ‘20 under 20’ in my office in the Treasury talking to them about when they’d start up their business what motivated them, and most of them said that it was at age 11 that they’d first thought of their idea. They struggled with some of the hurdles – like they couldn’t open bank accounts to other sorts bureaucratic difficulties – but they persisted and actually due to new technology, due to the availability of things like YouTube and podcasts to be able to get wider advice or to be able to network with a wider world – they ultimately had succeeded in their ambition. It is those ideas, and it is these people that drive progress in our country.
In the 1960s we had an expression the ‘jet set’ because only the very rich could afford to travel round the world, but now thanks to new entrants it is a lot cheaper now and many more people can afford to travel. Or, what about supermarkets. I remember when getting pasta was exciting in the supermarket and now you can buy all kinds of things from fish sauce to won tons; you can get anything you want at your local Sainsbury’s, again that’s down to enterprise.
Even the internet itself, where the derivation of that idea came from Britain and great people like Ada Lovelace or Tim Berners Lee. Quite often we hear negative things and of course there are harms that we need to deal with, but a recent survey showed that 82% in Britain had said the internet had made their lives better. None of us have to get bored waiting in a queue at the supermarket anymore, we can use our time much more productively. We are seeing all this progress and sometimes I think we take that progress for granted. But the reason we’ve got that progress is because of the individuals that come forward and there has never been a better system than the system of free enterprise for harnessing the ideas and dreams of individuals.
For me it’s not just about economics. Of course, it is important that we get economic growth up. Of course, it is important that people that are able to afford to live better lives and that they are able to get better food for their children and get better opportunities. But starting businesses is also important for that sense of fulfilment and self-determination for individuals and that is one of the reasons that I do love meeting entrepreneurs, because you are people with dreams who want to bring those dreams to reality and there’s something really exciting about that.
British start-ups are also an area where it doesn’t matter what your background is. It doesn’t matter where you’re from. It doesn’t matter what gender you are. If you’ve got a good enough idea, if you’re prepared to work hard enough; if you’re prepared to fulfil those ambitions; or if there’s somebody out there who wants to buy what you’ve got to offer, you can do that and you don’t have to be ticked off by a piece of government bureaucracy.
I think that’s incredibly empowering and one of the areas that I’m very interested in the whole area of female entrepreneurship, because we do know there are fewer female entrepreneurs than male entrepreneurs. If we had as many female entrepreneurs as male entrepreneurs we’d have 1.2 million more businesses in this country, and I do see it as a source of empowerment, as a source of being able to take control of your own life and run your own life.
So what can the government do about this? First of all I think we need to be positive. Emma mentioned Brexit and the Brexit vote. I believe we will get a deal. I believe we’re very close to getting a deal. It’s always darkest just before dawn and I think that is the situation we have at the moment, but there is a definitely a will and you can sense it across Parliament, and you can sense it across the country that people who have been debating this issue for two years.
There are various permutations of exactly what we could do, but we want to get on with it. Leave the EU in an ordered way and in a way which provides the security and stability for everybody to carry on living their lives, but also so that we can carry on trading with the EU which is a vitally important market, as well as reach out further into other markets.
I would point out that many overseas markets are already doing extremely well, and we’ve seen our exports rise across the world. What does the government do next? In my role as Chief Secretary to the Treasury I’m in charge of public finances. We currently spend a £800 billion a year as a government and this year will be the year of the Spending Review and that’s where we set our government budgets for 2020. I think that’s a massive opportunity for us as we leave the European Union to reform our economy and to look at how we spend public money, and if we are we spending it right to deliver the maximum possible opportunities for people across the country.
First of all the challenge is to be able to keep taxes low. Often my number one job is saying ‘no’ to people who want to spend more money because I know that ultimately for every extra pound we spend that’s a pound we have to raise in tax, and we have been able to keep corporation tax at 19% which is the lowest in the G20. We’ve been able to lower business rates, particularly for those businesses on High Streets. I’m sure there are many people in this room who feel that there are issues still with tax. I certainly think there is a lot of room to simplify our tax system. I think it’s become over complicated. So those are some of the things we need to look at over the coming years.
The second area to highlight is infrastructure. One of the decisions this Government has made is to spend more money on capital spending, investing in infrastructure like roads; the railway network, fibre and broadband rather than day to day spending. I think that’s important. But what we need to make sure is that we’re spending that capital money in the right way and I’m very interested in your feedback as small businesses. What would make the most difference for your business. Is it rail connectivity? Is it fibre connectivity? Where is it geographically?
What would make the most difference to making your businesses more successful and in fact tomorrow I’m going to be in Felixstowe meeting businesses there and just hearing from the ground up about what it is that will make the difference in terms of capital investment.
Of course skills are vitally important. We’ve got a program of education reform taking place we’re introducing new T levels. I was previously the Education Minister we introduced new GCSE and A-levels and those continue to be important.
The second area I’d highlight is improving regulation and red tape. I think the government is always in danger of creating too much red tape. I’m interested in how we can simplify that landscape and how we can make it easier for businesses to engage. How we can flag up where there are bodies which maybe not intentionally, but quite often unintentionally, might be creating those problems. I think the biggest area I’d highlight of regulation is the planning system. We need to look at cities like Tokyo which have a more liberal planning system which make it easier for office spaces to be changed, for new houses to be built and we need to look at what we can do.
One of the things we’ve just announced in the Budget is we’re conducting a consultation on the ability to build up.
If you have a freestanding building you’ll be able to build up to five stories without getting planning permission, and that is the the type of innovation I think we’d need to see more of. We need to allow more spaces to be easily changed. We need to allow new land to be opened up both for housing and for office space and for manufacturing. Another subject close to my heart is childcare. Again I think there’s still more we need to do on simplifying the way we organise childcare. We spend £6 billion as a government per year on supporting childcare but I think those are areas we can do better.
The final point I want to make before we go onto questions is championing new entrants. It’s always tempting for government to end up listening to the big players. You can often see that it is big companies will have large lobbying organisations, big legal departments and I’m very keen as a government that we try to make sure that we’re looking at how will everything we do affect new entrants. How will that affect the people that have not yet got into that market and part of that market.
This means looking at things like business support. We spend over £20 billion on business support and that’s a combination of tax reliefs and other funding through things like LEP’s but also through special grants for particular sectors. I want to look at this through the lens of how we help new companies start up.
And finally, I want to mention about the issue of women. We launched a report recently that showed the vast majority of all venture capital funding was going into all- male teams and I do think that that is a barrier that the government has highlighted and we want to see more venture capital firms open up and fund a wider variety of businesses, because there’s no doubt that if you’re well networked, if you are based in London and the Southeast or if you are male it is easier to get funding than if you’re not.
We simply can’t afford, as we’re leaving the European Union, we’re seeking to become a more competitive country. We’re seeking to lead the world in enterprise. We simply cannot afford to ignore huge amounts of talent, and we can’t afford to ignore half the population or cities outside London. So the Government needs to make sure that we are not skewing the playing field against new entrants and ensure that those who fund businesses are also looking beyond the usual suspects.
Below is the text of the speech made by Liz Truss, the Chief Secretary to the Treasury, at the Conservative Party Conference held in Birmingham on 3 October 2018.
It’s great to be here and a privilege to follow such esteemed colleagues.
Of course, Conference is something I look forward to every year.
It’s a platform for Conservatives to make the big arguments about our country’s future.
To fight the big fight on the Great Playing Field of ideas…
Or in my case, to talk about Cheese.
Now, I had prepared a long speech about the trends in British cheddar exports.
But I’m afraid you’ll all have to miss out.
Because this year, I’ve been told that there’s not to be any Cheese Chat.
Conference, that’s not just annoying…
That is a disgrace.
So instead, I’ll talk about the Treasury, my relationship with Philip Hammond and the important work we are doing to prepare Britain for the opportunities ahead.
As Chief Secretary, I’m charged with keeping a tight grip onthe public finances.
Since 2010, we’ve had a balanced approach to the public finances, investing in front line services including –
• Giving public sector workers a fair pay deal
• Funding the NHS
• Backing our nation’s defence with extra money for Trident.
We’ve also tackled waste and brought the deficit down,
Meaning that this year debt will fall as a share of national income.
And that’s incredibly important work.
Because Government money is our money.
Labour think they can spend as much of our money as they like.
But we know out-of-control spending means high debt, a weaker economy, fewer jobs and higher taxes on families and businesses.
Just like we saw last time, it’s the poorest who are hit hardest when the music stops.
So at next year’s Spending Review, the Chancellor and I will be assess how well we’re spending money, and how we can deliver the best possible public services.
Being Chief Secretary is thrilling work, but it can be hazardous.
I’m constantly dealing with Secretaries of State and their requests for more money.
It does mean you get a reputation for being ‘Bad Cop’.
And Ministers don’t always walk away happy.
For example, after recently denying a request from one particular Secretary of State.
…I woke up the next day to find a tarantula in my bed.
And what I’ve learned from that experience is… never mess with David Mundell.
Just to be clear… that was a joke.
I must admit, I was told by Treasury advisers not to make any jokes. They haven’t always gone so well….
But as anyone who knows me will tell you.
…I don’t like Government telling me what to do.
As well as the important day-to-day business, Philip’s Treasury team is fighting to protect the values that make this country great.
…and fighting for the hearts and minds of the next generation.
Because we have to challenge the idea that young people are a bunch of Corbynistas.
The young people I’ve met in this job aren’t heading for communes…
They are entrepreneurs, disruptors and change-makers.
They want smart and efficient Government, which has a role but doesn’t get in the way.
They’re compassionate and care about the public good, but are also fiercely entrepreneurial and independent.
They’re exactly the sort of people Labour are talking about when they call business the ‘enemy’.
It’s our duty to challenge Labour’s warped ideology that says personal ambition is evil, and success must have come through abuse of the system.
…that instead, the economy should be run by a committee of Jeremy Corbyn, John McDonnell and Diane Abbot – the people who have never run anything in their lives.
Free enterprise is not about allowing big corporations to flout the rules.
It’s the opposite of that.
It’s about the power of competition to deliver lower prices and better services for consumers.
It’s about the power of people to transform their own lives, and change our country for the better.
Those are the freedoms we are fighting for.
And if there’s one unsung Conservative hero – who’s kept our economy on track the last few years – it’s Philip Hammond.
The boy from Essex with the punk hair and leather jacket has become the steady hand on the tiller of the economy.
We know him as ‘no-frills Phil’.
He’s the no-nonsense Chancellor:
Championing young entrepreneurs and supporting new technologies like 5G to make our economy fit for the future…
… Ensuring we spend money in a smart way that delivers results.
… Preparing Britain for the future outside the EU.
… And keeping the burden of tax under control.
We have cut income tax by over £1,000 for the typical basic rate taxpayer…
…Philip has lifted infrastructure investment to the highest in 40 years…
…he helped craft ground-breaking T-levels so young people get the technical education they need…
…he worked with the Prime Minister on our modern industrial strategy to boost the economy and create high-paid jobs.
And most important of all, in a time of extraordinary change, he has provided the integrity and stability the country needs to succeed.
He’s a man of principle with a deep sense of patriotism and optimism about our future.
A man I’m proud to call boss.
Ladies and Gentlemen, the Chancellor Philip Hammond.
Below is the text of the speech made by Liz Truss, the Chief Secretary to the Treasury, to the Spectator Housing Summit on 17 May 2018.
For me, it’s personal.
As Virginia Woolf said: A woman must have money and a room of her own.
What she was talking about was having the power to shape her own life.
So, as a 21-year-old graduate from Leeds, I followed that advice.
I headed for the bright lights, big city for my first job as an accountant.
We want the next generation to have the chance to better themselves, to be able to move where there are the best jobs and the best opportunities.
Young people are at the forefront of a huge shake up of the economy.
They are the freest generation ever: the Uber-riding, Deliveroo-eating freedom fighters.
They’re not just hungry for pizza, they’re hungry for success.
They have the desire to shape their own future.
But at the moment they’re spending too much time as frustrated flat hunters.
According to the CPS, the cost of living and housing are the most important issues.
Renters face high housing costs, with nearly half of income going on rents in London on average.
The average London house price is 12 times higher than the average London wage – when you can only get a mortgage at four or five times your salary.
To paraphrase Norman Tebbit, the new generation want to get on their bikes, hit the road, and find the best jobs in the best cities.
But even though this generation are keen cyclists, they’re not getting in the saddle.
Because it’s no use getting on your bike to find a job, if you end up with nowhere to lock it up.
It doesn’t matter where you want to go – Norwich, York or London, if you want to go there and get the best job, you should be able to.
I want everyone to be able to move house to get a better job, so they can get on in life.
And accepting the status quo is bitterly unfair.
We also need to make sure that the record number of new businesses we have in the UK get access to the best talent.
For the sake of society, we need to make sure our villages are viable – that they have the houses, schools and shops to thrive.
And for the sake of our economy, we need to let our most successful, towns and cities expand.
In Medieval times, Norwich was the second-largest city in England, agriculture’s answer to Silicon Valley.
Then, during the industrial revolution, the country marched to the beat of the North, and workers flocked upcountry.
It was not so much a gold-rush as a cold-rush.
The point is that when towns have their moment, people move to the places where the wages are highest. That’s resulted in Britain’s economy growing faster.
Today, London is as productive as Germany, while cities like Oxford, Cambridge and York are bursting with potential.
These are towns calling out to workers everywhere, desperate for more hands to the pump.
But according to the Resolution Foundation, the share of working age people moving for jobs has gone down by 25 per cent since 2001, with the most significant decline among young graduates.
What’s more, the typical person would have been £2000 better off getting on their bike.
So we need to need to let these towns off the leash, because we all stand to benefit, in our wages and in our quality of life.
A recent study in America by Hsieh and Moretti showed that freeing up housing regulations in New York, San Jose and San Francisco to median levels could increase the US’s GDP by 3.7 per cent, which would mean an extra $3,500 in wages for all workers.
But the most productive cities are being held back by zoning requirements.
And it’s much the same story in the UK – restrictions on building are holding cities up.
Analysis shows that opening up planning is one of the fastest things we could do to boost our country’s productivity.
This is why reform is so urgent.
It’s restrictions that are causing problems, but there are some out there who say that the solution is more restrictions, more control, more state interference.
This is the opposite of what we need.
Others are calling for a £10,000 bung to 25-year-olds – which they’ll all end up paying back in higher taxes.
I think it’s a myth that young people want free things. The fact is they want free-dom – to work and live where they choose, and that will take radical action.
Because all of these are attempts to cure symptoms.
None aim to tackle the underlying issue, which is supply.
The answer is not top-down meddling, but encouraging disruption.
We need to open up more land to build on.That means challenging the vested interests.
We need to challenge the NIMBYs, comfortable in their big houses in suburbia.
The fact is that flats and houses need to be built where they are needed.
We all want somewhere for our children to live – not least because that means they don’t have to live with us until they are 30!
We need to make better use of the land that we have.
We are introducing minimum densities for housing development in city centres, and have extended freedoms to convert certain types of property into housing.
We also need to encourage more creative tools that give more power and freedom to the individual.
We modernised outdated estate agent legislation in 2013, making it easier for excellent websites such as Zoopla to provide the information that renters and house buyers need when deciding where they want to move – including whether their garden is south facing.
Meanwhile Airbnb and Spareroom have helped people find – like Harry Potter and his friends – a room of requirement.
We need to liberate business planning in high-growth, free enterprise areas.
I would like to see more of the development model used to build Canary Wharf – A Canary North!
And we also need to look at those councils around the country who are not delivering.
Last November, we singled out 15 other councils that are holding back people who want to develop land and create new opportunities, and the government has started intervening in 3 of these cases.
I’m pleased to say, though, that this government allowed local people to make their own neighbourhood plans, so that they can do what’s best for their villages.
That’s why our reforms, put forward by Sajid Javid, and taken forward by James Brokenshire, are so important.
We’ve removed stamp duty for first-time buyers purchasing a house under £300,000 – that’s 4 out of 5 cases. This will save people £1,700 on average, and help over a million first time buyers getting onto the housing ladder over the next five years
And we’re streamlining the Byzantine planning system, to make it easier for the small firms to compete, to disrupt the market and, through fierce competition, build the houses and offices and factories that will make Britain successful.
In the 1930s, before planning system was introduced, there were ~265k houses built by the private sector a year – which goes to show we can do this!
We’re cutting through bureaucracy and, since overhaul of planning act in 2012, we’ve gone from 200k to 350k planning permissions per year.
And last year, there were 217,000 net additional new homes in Britain, which shows massive progress.
We are also making plans for the future, including the corridor between the bright lights of Oxford and Cambridge – we have concluded a deal targeting 100,000 new homes by 2031.
This goes alongside our investment in infrastructure – a 40-year-high – which will connect all these new homes with the modern roads and railways people need to get around.
Britain should be an opportunity nation where you can get on your bike and find a job where you want.
This is what I mean by freedom of movement.
It’s part and parcel of a free enterprise economy, which is what drives growth and prosperity.
Our job in government is to help achieve that.
With better and more affordable housing, we can improve social mobility, address wealth inequality, and make sure our country’s opportunities are open to everyone – big or small, north or south, man or woman.
Below is the text of the speech made by Liz Truss, the Chief Secretary to the Treasury, on 26 October 2017.
When I arrived in the Chief Secretary’s office in June, I was expecting to find a note telling me how much cash there was.
Instead all I got was a few pieces of cricket memorabilia and a rather sweet cat.
But what I did inherit were public finances in much better shape than in 2010. The deficit is down and the economy has enjoyed years of sustained growth.
On every street corner, I can see untapped potential. I see the ambition to succeed from the founders of firms to the leaders of social enterprises. In every business, school and hospital, we have huge talent.
I know that the best days of Britain are ahead of us.
In order to turbocharge our success, we need to unleash this potential within our economy.
And for that we must look to public services.
Why?
Because around a fifth of the economy is in the public domain.
And because:
Education
Infrastructure
Health care
Planning
Regulation
…are all under the control of the government.
Unlocking our potential is not about increasing the size of the state.
It’s not about what you spend – it’s about how you spend it.
We’ve made good progress over the last seven years, reducing the deficit while improving front-line services. Some say we can’t go any further, but I don’t accept that defeatism.
I know we can: it’s about unleashing a new era in technology, creativity and ideas.
In Britain we have some of the best public servants in the world.
But we need to give our public sector leaders new freedom…
Robustly measure our output…and make sure we spend every penny well.
Achievements to date
We’ve made huge progress since 2010:
– 4 years of uninterrupted economic growth
– a record number of start-ups created: we rank 3rd, with over 650,000 founded in 2016 alone
– we now have 22 billion-dollar tech companies based in the UK, from St Ives to Inverness
– the unemployment rate at its lowest since 1975
– millions more children in good or outstanding schools, and more student choosing to pursue maths at A-level
– historically high cancer survival rates
We didn’t achieve all this by losing control of the public finances.
We did it by harnessing the creative, innovative spirit that has driven Britain’s success for centuries…
By shifting money to the front line in health, policing and education…And by giving those on the front line the power to transform what they do.
Moving from inputs to outputs
So why is so much of the public spending debate just about how much money there is?
No company would measure its performance by its cost base.
You don’t see Sainsbury’s saying we’re doing better this year because we’re spending more money on products we’re buying to sell to our customers. Deliveroo didn’t come up with their new operating model by deciding what the budget was first and then buying up bikes.
The reason we’ve got such a high number of start-ups and our businesses are so successful is because they are constantly finding new and better ways to deliver their services.
Why do we only ask:
How big is her Budget?
How much are we spending?
Is it more this year or last year?
Is it more in Manchester or Bristol?
What number is attached to that announcement? And to be clear, there aren’t any spending announcement here today.
Of course, public services do require money. So let me set out the facts:
– public spending is currently 38.9% of GDP
– this year, it will hit £800 billion for the first time – that’s around £29,000 per household, and in line with what other major economies are spending
– on education, we spend more as a percentage of GDP than countries like Germany or Japan, and our health spending is 9.7% of our GDP, more than the EU average
– our public services are important. We value them highly. And that is exactly why they have been, and will continue to be, well invested in
How do we make public services better?
Hard working taxpayers want to know that every penny that they pay is going to good use.
Lower productivity means less value achieved for every pound spent: fewer operations conducted, fewer children educated well, fewer bins collected.
And the result? A substantial budget deficit on the eve of the UK’s biggest financial crisis in 80 years.
Let me be clear – there are some things only government can do.
But allowing the state to grow squeezes out the freedom and enterprise of the private sector.
It raises the tax burden on both individuals and businesses, slowing and stifling the innovation which drives our economy and our success.
If we want to make sure our public services continue to lead the world, we shouldn’t be losing control of the public finances or wrecking the economy.
We need a balanced approach – investing while driving productivity and value for money.
Productivity doesn’t mean we’re expecting people to work harder – people already work hard.
It’s about giving people the means and the freedom to maximise the impact of what they do. And making sure public services are having the greatest impact on people’s lives.
We have commissioned Sir Michael Barber to look at how we do exactly this.
For me there are three key areas:
Firstly, we need to continue to move towards a system that rewards the impact money has, rather than the amount of money spent.
Secondly, we must cultivate leadership in public services. We know what we want to see, but we should give those on the front line freedom to deliver.
And, finally, we must open up more of our public services to new ideas and disruptive innovation. We need to think big.
1. Impact
Firstly: we must rigorously measure the impact each pound spent has. If we can’t measure results, people will talk about what they always talk about: money.
We’re now much better at investing in economic infrastructure. With more sophisticated analysis we’re making better decisions than ever about where we invest taxpayers’ money. This means families and businesses see maximum gain when we spend money on roads or railways.
For example, in 2015, we were able to prioritise the dualling of the A11 to Norfolk, because it had a very high cost-benefit ratio compared to other projects.
Now we need to go beyond concrete and steel and use this approach to look at how government spending affects people.
We’re already doing this in higher education. We’ve recently published data measuring the impact of a university course on students’ prospects. It’s a new tool for comparing the return on investment at different institutions and courses.
It shows, for example, that students taking engineering at the OU can earn well over £50,000 five years after graduating.
And our Teaching Excellence Framework is incorporating earnings data, and providing a measure of the overall value-add that universities and courses provide.
However, effective measurement is not just about holding ourselves to our own standards, it is also about benchmarking our performance against other countries – noting where we are better and when we are not, so we can improve. We know how to benchmark. We simply need to do it more.
Prioritisation
This measurement can help us prioritise.
We are already doing this by rebalancing public spending. For example, by helping people into work, we’ve reduced the Jobseekers Allowance bill by £2.1 billion since 2010. And we are increasing public investment to around £1 in every £8, as opposed to £1 in every £14 in recent decades. And we are reprioritising within out Budgets.
On Education, our prioritisation of funding to the front line has meant that we’ve been able to put £1.3 billion extra into core schools funding. The evidence shows that high quality teaching that is the key factor of educational performance.
But we need to go further.
We need to back brave leaders, like Simon Bailey of Norfolk Constabulary, who is reshaping his force to deal with the changing nature of crime: making difficult decisions so he can invest in the IT required to deal with increasingly complex crimes such as adult and child abuse, sexual offences and cyber-crime.
2. Leadership freedom
As Charlie Mayfield identified in his report industry productivity, leadership is an area where the UK has much to learn.
To use his exact words: While we have world class, high performing businesses, in far too many UK firms of all sizes, management performance falls behind the best international standards.
Our public services are no different.
We need to move away from the idea that great leadership and management is something that you are born with. That someone is either Winston Churchill or David Brent.
Some of our most successful innovations like academies, foundation trusts and reform prisons have been about enabling and empowering leaders: giving them the freedom to lead and the accountability that comes with that.
Take the Michaela School, run by Katharine Birbalsingh, that I visited in Wembley.
Katherine has reorganised the school day to eliminate the time normally lost moving from classroom to classroom.
Over time, it means hours – days – of time spent in the classroom instead of wasted in the corridor.
Taken together, seemingly insignificant changes can have a huge impact on children’s lives.
The Michaela School was recently rated ‘outstanding’ in every category by Ofsted.
Or take Worthing Hospital, where trust leader, Marianne Griffiths, has embraced the Japanese concept of Kaizen – continuous improvement.
This has been adopted by the brilliant team on Beckett Ward, led by deputy Sister Sue Grace.
Instead of lodging a complaint to senior management and waiting six weeks for a response, the team gather each day for an “improvement huddle”.
One such improvement was a nurse’s suggestion to move admin desks onto the patient bays. This would mean nurses could supervise patients while doing paperwork. Otherwise known as “BayWatch”.
Once put into practice, falls by frail patients dropped by 80%. We know our nurses are working their socks off.
The problem is, there are often too many barriers to making the small changes that have a big impact.
As a government, we must do more to empower our public servants, remove these barriers and provide them with the means and support to unlock their potential.
In the way we design frameworks and spending controls, the Treasury – whilst protecting public money – must make sure we are allowing leaders to lead and giving them freedom over how to achieve results.
3. Disruption is good
Finally, I want to take on this notion that the public sector should resist outside influence.
The public sector does not exist in a bubble and business should not be treated as the enemy.
Don’t critics realise that the cheap flights they take – the lattes they sip – and the smartphones they post their dubious comments from are all results of free enterprise.
Rather than ignoring or denying the virtues of enterprise we should be harnessing it for the public good.
Both of my parents worked in the public sector in Leeds, my dad as a university lecturer and my mum as a nurse and then teacher. In fact, my father is still working as a mathematics lecturer today.
The institutions that they worked in – Leeds University and the Infirmary – emerged in the city’s days as a wool town, and were paid for and heavily influenced by the industrialists of the day.
Fast forward to today, and we can easily see the huge contribution made by entrepreneurs and business people – like Lord Harris and Paul Marshall – to our public service. Both have brought their energy and drive to the academies and free schools movement, where performance is outstripping other schools in the state sector.
Public private partnerships, like the Docklands Light Railway, are some of the most effective and popular public services in the UK.
From Ask the Midwife, an app which is helping expectant mothers to access NHS services quicker and more effectively…
…to the brilliant IT company Reveal Media that supply bodyworn cameras to police, saving time and speeding up prosecutions
…to the transformative effect that digital flood information is having on coastal towns and villages vulnerable to flooding – technology only available because of the innovations of world leading software companies.
We must champion a rich, vibrant, creative, enterprising public sphere where all ideas are welcome.
Looking forward
We want to see new ideas challenging the status quo of our public services.
Government doesn’t always have the answers, but we can create structures to empower people – liberating our public servants and making the most of those opportunities.
This idea that some monolithic planned state will solve Britain’s problems in our rapidly changing and incredibly diverse world is ludicrous.
The best ideas often come from those on the front line. We need a public sector open enough to harness new ideas for the public good.
Conclusion
We’ve come a long way in understanding how to get the most from public services.
It’s not about spending money we don’t have.
It’s about championing the ambitious and the enterprising.
It’s about rigorous measurement of what we do and being willing to reprioritise.
It’s about opening up more of the public sector to new ideas and innovation, unleashing creativity in the way we approach our day to day delivery of public services.
In this way, we can harness the untapped potential of the public sector and its people to help drive our economy and put us in a strong position to thrive.
Below is the text of the speech made by Liz Truss, the Lord Chancellor and Secretary of State for Justice, on 21 July 2016.
Mr Attorney, let me begin by thanking the Lord Chief Justice for his kind words – and the warm welcome he has given me over the past week.
I am delighted to have been appointed to this role.
It’s a privilege and an honour for me to have been sworn in today as the first woman Lord Chancellor.
Although, as the Lord Chief Justice has mentioned, I may not be the first woman to hold the Great Seal.
The duties that go with this role today – to respect and defend the rule of law and the independence of the judiciary – must be upheld now as ever.
In my time as Lord Chancellor, I will uphold them with dedication.
Because the rule of law is the cornerstone of the British way of life.
It is the “safest shield”, as Sir Edward Coke – a great son of Norfolk – put it.
And as Lord Bingham wrote:
“the hallmarks of a regime which flouts the rule of law are, alas, all too familiar – the midnight knock on the door, the sudden disappearance, the show trial”.
The fundamentals of civilisation and liberty depend on the rule of law.
It is our safeguard against extremism, oppression and dictatorship – the separation of powers keeps the executive in check.
It is the basis of our prosperity, which is sustained by secure contracts and free trade.
And it shapes the fabric of our free society – the order, the stability, the equality and the individual freedom that we all love and respect.
We have inherited the finest legal tradition in the world.
And it is our duty to protect it.
We know that all successful societies have the rule of law at their core.
And it is a source of pride that the common law has played a key role in so many of them.
Our law, English common law, has shaped the world for the better.
It is at the heart of everything I believe in.
As a Parliamentarian, the rule of law has been at the centre of my work.
When I was in commerce – negotiating anything from shipping charters to telecoms supply agreements – every single transaction was underpinned by contract law.
And wherever I did business around the world, the preferred contract law was English law.
That’s because we have the most open and trusted legal system in the world.
That is why we are so often the first choice of legal venue for international litigators looking to be treated fairly.
They know that we have the greatest judiciary in the world, with a reputation for excellence, incorruptibility, objectivity and independence.
I would like to see that reputation acknowledged more widely at home.
Without judges – from the supreme court to the local magistrates’ court – the rule of law would be nothing more than an empty slogan.
You are the human face of the administration of justice, and there can be no higher calling.
As a career, it should be seen as attractive – and prestigious – by every possible person, from every possible background.
In time, this will help the judiciary to be drawn from a pool of the widest available talent.
As a young woman, I remember going to Leeds Crown Court to see a female barrister defending cases, and saw for myself how the profession was changing.
I saw how justice was done, the importance of trial by jury, how everyone participates in the legal process – it was an inspiring experience.
I want as many people as possible to have that same experience, to understand the process of law, to want to join the legal profession and to become judges.
There has already been fantastic work carried out by the Lord Chief Justice on this front – and I will help with that, widening and opening up the profession.
After all, the law is our common law, our shared law.
I am a great supporter of reform and modernisation throughout the courts and tribunals system; and that urgent task will be high on my agenda in the months ahead, as I know it is for senior members of the judiciary.
As the first woman Lord Chancellor, I am proud to be part of our constantly evolving justice system.
It is a system that evolves, from precedent to precedent, in step with society.
But all the while, the fundamental principles of justice in this country remain the same.
The thread running through it all is the rule of law – it shaped society in the past, does so now, and will do so in the future.
