Tag: Speeches

David Gauke – 2012 Speech on Tax Avoidance

Below is the text of the speech made by David Gauke, the then Exchequer Secretary to the Treasury, on 23 July 2012.

Good morning. I am delighted to be back again at Policy Exchange to discuss an aspect of tax policy. On this occasion, the important and topical issue of tax avoidance.

At a time of economic difficulty, when tough decisions have to be made on public spending and when the burden of taxation remains high, there is little sympathy for those who do not make their full contribution. For those who work hard and pay their taxes, it is galling to see others shirk their responsibilities on either front.

But for there to be a sensible public debate on this complex issue, it is crucial that we understand the facts and the UK’s position. Tax avoidance is not a recent problem. In the fourth century AD, the Roman Emperor Valens had to make it illegal for individuals to sell themselves into slavery to avoid tax. And while this particular ruse seems to have fallen out of fashion, there will always be some who seek to shirk their civic duty. Just like every country at any time in the history of government, there is still work to do to ensure every pays what they should. But it is important to get a sense of perspective on our position – both in the context of recent history, and internationally.

While there is reason to be more optimistic and more grateful than headlines suggest, we are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill. Today, I can announce a consultation on proposals to crack down further on those that seek to push abusive tax avoidance schemes and make it easier for taxpayers to identify such schemes when they are on the end of a hard sell by a dodgy promoter.

First, it is important to recognise the scale of the problem. Last year, HMRC collected £474 billion in tax. The tax gap – the difference between what is owed and what is collected – is about £35 billion. Tax avoidance (as opposed to tax evasion, the hidden economy, criminal attacks and other aspects of the tax gap) accounts for just 14 per cent of this gap – around £5 billion or about 1 per cent of total liabilities. While that may be too high – being as it is more than zero – evidence suggests it’s probably one of the lowest in the world. That’s because, contrary to some claims, the vast majority of UK taxpayers do not aggressively avoid tax; and yes, that includes the vast majority of wealthy individuals and multinational corporations, as well as the vast majority of ordinary working people and small businesses.

If anyone is tempted to believe that tax is optional for the wealthy, remember that The top 1 per cent of individuals by income pay 26 per cent of all income tax, and the top 0.1 per cent (just 30,000 individuals) pay around 11 per cent. Large businesses pay around 60 per cent of all taxes in the UK, but account for around only a quarter of the estimated the tax gap.

And where HMRC finds tax avoidance, it takes action – many who have been investigated have been disappointed when the false claims that it is soft on the rich and powerful turn out to be unfounded.

For those not immersed in matters relating to tax, the debate on tax avoidance can be a confusing one, not least because the term ‘tax avoidance’ can be used somewhat loosely.

Legitimate use of reliefs is not tax avoidance:

Claiming capital reliefs on investment is not tax avoidance – when those reliefs were introduced precisely to encourage the investment in question.

Claiming reliefs against double taxation is not tax avoidance – when the alternative would be taxpayers paying tax twice on the same income.

Claiming back tax on legitimate charitable donations is not tax avoidance – any more than ticking the ‘gift aid’ box is.

Not paying tax on your pension contributions is not tax avoidance.

Taking out a tax free ISA is not tax avoidance.

Clearly, the examples I have listed represent perfectly reasonable tax planning – making use of reliefs for the purpose they were intended, and ensuring one pays only what one is liable for.

Now I would hope this would be obvious to anyone who understands the purpose of reliefs. Yet some estimates of the tax gap count use of these reliefs as ‘avoidance’.

That is what avoidance is not. But artificial structures that aggressively exploit reliefs contrary to parliament’s intended purpose through contrived, artificial schemes fall very clearly into the definition of avoidance.

Buying a house for personal use through a corporate entity to avoid SDLT is avoidance.

Channelling money backwards and forwards through complex networks for no commercial reason but to minimise tax is avoidance.

Paying loans in lieu of salaries through shell companies is avoidance.

And using artificial ‘losses’ deliberately accrued to claim back tax is avoidance.

These kinds of schemes are where we are focussing our efforts, and they are all, to borrow a phrase from the Chancellor, ‘morally repugnant’.

These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence. And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.

Now those who have engaged in tax avoidance have received their share of public scrutiny recently, to say the least. But often it is the firms that market such schemes that are the root of the problem. Some firms will adopt tactics that border on mis-selling – promising large tax savings, and saying the arrangement is unlikely to be challenged. Those who enter into the schemes are often shocked to find that HMRC pursues them relentlessly. Often they lose a lot of money, a lot of time, and their right to confidentiality due to the resulting tax tribunal. Just this month HMRC won a long-running legal challenge against a large avoidance scheme first marketed ten years ago by a ‘big four’ accountancy firm that ultimately gave nothing for the substantial fees that those participating paid for it.

There are those who may argue that “if it doesn’t involve lying to the Revenue, it’s OK” regardless of how artificial or contrived the arrangements may be. But for most people in the tax world, there has always been such a thing as a “smell test”. Where the tax consequences of an arrangement are so clearly contrary to the intentions of Parliament, where the nature of the arrangements so clearly lack a commercial, non-tax rationale and where the result looks “too good to be true”, most reputable advisers would say that the arrangements stink – and stay well clear.

But for the taxpayer, there may be times when it is not clear if an arrangement is legitimate tax planning or contrived avoidance. It is up to us as Government to make clear the features of dodgy schemes so that taxpayers can take ownership of their affairs and know that HMRC will challenge aggressive tax avoidance in all its forms.

Today we consult on ways to improve the information available to the public on avoidance. Publishing warnings for all to see, and making it easier for taxpayers to see if their adviser has promoted failed avoidance schemes in the past.

The tax avoidance landscape is changing, and it is important that we adapt as it does. I am glad to say that the mainstream view within the tax professions is that contrived avoidance schemes are bad and have no place in an honest, reputable firm. I welcome the recent comments from senior figures in the industry that confirm this – Michael Izza’s statement, on behalf of the Institute of Chartered Accountants, that there is no place in the profession for those involved in egregious schemes; the warning from the Solicitors Regulation Authority, that SDLT avoidance can damage a professional reputation; and the denunciation of those who push abusive schemes by Patrick Stevens of the Chartered Institute of Taxation. Through today’s consultation, I hope we can continue to work closely with professional organisations to ensure that together we stamp out practices that harm the reputation of the industry, as well as the pockets of the honest majority of taxpayers.

That is the view of the mainstream. But we face a problem with a minority – the ‘cowboy tax advisers’. Small, niche firms peddling crude schemes that are unlikely to be successful once they are brought to HMRC’s attention. There has been some excellent coverage in the Times of the sort of thing I am talking about; the so called ‘K2’ scheme, for example, in which a shell company gives out payments described as loans in lieu of salaries.

These firms behave differently to the well-established, reputable advisory firms. They change name frequently to avoid detection; they include ‘fighting funds’ in their fees – pre-empting an inevitable clash with the authorities, and often do not comply in full with HMRC’s disclosure rules.

It is these organisations in particular that we need to raise public awareness of. If I find out my builder has changed trade names three times, avoids informing the planning authorities, and includes in his fee a ‘litigation fund’, I might be tempted to find another builder. But all too often there is not the same awareness around tax advisers.

If there is one lesson to be learnt from the cases exposed in recent newspaper reports, if a tax adviser tells you something that sounds too good to be true, it probably is too good to be true.

So one of the major parts of our consultation looks at how we can make people aware where a company has previously peddled schemes that have been successfully challenged – so that they know there is a strong chance that no good will come of it.

And we are also consulting on how we strengthen our disclosure regime, looking at how the descriptions of schemes covered might be reformed to ensure we capture more, and that we can crack down on those who flout the rules. The Disclosure of Tax Avoidance Schemes regime, DOTAS, has assisted HMRC greatly over the years – closing off around twelve and a half billion pounds in avoidance opportunities. But as the avoidance landscape changes, so must it

We have already extended DOTAS to make it stronger and more effective. In 2010 and 2011 we implemented a number of improvements to the system requiring promoters to provide client information. And this year we legislated to allow HMRC to flush out users of certain SDLT avoidance schemes more effectively.

And the major reforms to the system we consult on today can, informed by our responses, place DOTAS once again at the forefront of anti avoidance measures globally. These and other proposals consulted on will:

Strengthen our descriptions to ensure we close the net around the few schemes that are not already captured.

Clarify what needs to be disclosed.

Require higher quality information on how schemes work.

Require a named individual to take responsibility as promoter for the scheme.

Demand better disclosure of those who use suspect arrangements.

Take further steps to inform the public of the genuine dangers of entering into such arrangements.

Ensure taxpayers know it is in their interests not to go near them.

And tighten the screw on those who refuse to co-operate.

I am confident that we can work with those parts of the industry that act with honesty and integrity, and with everyone else with an interest in promoting fairness and transparency in the tax system to bring about the change we need. We welcome views from representative bodies, tax agents, businesses and individuals, and I would encourage all of you with an interest to offer your thoughts.

There are some who might say that consultation documents on tax administration are often an effective cure for insomnia, but this is one consultation that will keep the promoters of aggressive tax avoidance schemes awake at night.

And while we look at how to strengthen the regime, we will continue to tackle aggressive avoidance wherever it occurs.

Reinvesting money to make sure we stay on top of the fight – £917 million in additional resources committed towards tackling evasion and avoidance over the spending review period, which will bring in around £7 billion per year in additional revenue by 2014.

And last month, we issued our consultation on a General Anti-Abuse Rule, aimed at deterring and tackling abusive schemes with a new rule that is effective against the most egregious arrangements.

It will act as a further deterrent to those engaging in abusive schemes, and improve our ability to secure payment of the right amount of tax.

But it’s important to realise that there is no tax avoidance ‘magic bullet’. No single rule can ever wipe out avoidance completely. The benefits of a GAAR will be considerable but its full effects will take time to be realised, and we should remain ever vigilant against wider forms of avoidance that do not fall within its scope.

Through the steps we are taking, we will build on the excellent compliance record that HMRC has:

Moving swiftly to advise ministers to close 7 tax avoidance schemes successfully in the last year alone -schemes that exploit loss reliefs, or claim relief twice for the same expenditure, for example.

Establishing the High Net Worth Unit in HMRC, to manage the affairs of individuals where the most tax is at stake, ensuring that those who can most afford to pay contribute what they should.

Compliance yield doubling in 6 years

And this month’s closing of the ten year-old scheme I mentioned earlier, used by around 200 wealthy individuals, which will mean recovery of around £90 million of tax at risk. This is the latest in a long line of successful challenges – including a scheme closed in April saving £117 million, and one last year involving allowances of around £1.8 billion.

It is this kind of activity that ensures that avoidance does not pay – upholding the wisdom of the vast majority of those – rich or not, who do not engage in it.

As a result, our compliance record is one of the best in the word. The tax gap in the U.S. is around 14 per cent, compared to 8 per cent here.

It is unfortunate that HMRC’s achievements are sometimes not only under-acknowledged, but undermined by ill informed criticism.

There are those who claim that HMRC is soft on big business. But this ignores the facts that:

£29 billion in additional compliance revenue has been collected since 2006-07 through the Large Business Service, excluding some exceptional items.

Over eleven and a half billion pounds of this was saved through the High Risk Corporate Programme in the last six years.

And, as was demonstrated in February when an aggressive debt buyback arrangement was closed down, HMRC takes decisive action when large corporates engage in contrived tax avoidance.

Instead, the press coverage tends to focus on accusations of ‘backroom deals’ which allegedly cost the exchequer billions. One such accusation in a magazine resulted in the formation of UKUncut. There were protests and arrests and increasingly hysterical accusations as others joined the bandwagon.

HMRC’s strict statutory duty of taxpayer confidentiality meant that it was very constrained in what it could say publicly about the affairs of specific taxpayers and had limited ability to defend itself.

But on this occasion, the NAO commissioned a review, led by Sir Andrew Park, of tax settlements with large businesses. Sir Andrew concluded that all the settlements reviewed were reasonable and the overall outcome for the Exchequer was good. The NAO went on to say that ‘the resolution of the issues by HMRC with the companies in question is welcome’. In the case that has attracted most publicity, Sir Andrew suggested that there may have been grounds for the taxpayer not to be liable for £6 billion, as is routinely reported, nor £1.2 billion (as was the amount settled) but nothing. It is a shame that the media coverage of the positive findings of the report has not been as prominently or as widely reported as the discredited claims that a business was let off billions.

Companies must pay tax in accordance with the law, just like individuals. But it must also be accepted that the tax affairs of companies are often more complex than the tax affairs of individuals. Companies – especially large multinational companies – will have profits and pay taxes in many jurisdictions. As a matter of policy decided by Parliament, our tax system contains characteristics, such as capital allowances, R&D tax credits and interest deductibility that will mean that a company will often pay tax at an effective rate lower than the headline or statutory rate. The fact that that happens is not in itself evidence of avoidance on the part of the company, nor incompetence on the part of HMRC. Parliament can change those characteristics, although in doing so it would have significant implications for the UK as a place in which to do business.

Of course, HMRC tailors its responses to different taxpayers, based on their needs and behaviours and the risks they pose. So it’s inevitable that HMRC needs to take a hands-on approach in some cases, and doing so saves the public millions in legal fees and lost revenue. But let me be clear – when they do so, they are nothing but even handed. HMRC’s aim with any taxpayer is to ensure they each pay the tax they owe and receive the reliefs to which they are entitled, minimising compliance costs and uncertainty through early and open dialogue where there are issues to resolve.

This government has led the charge on ensuring that we keep the UK competitive with lower tax rates for everyone who contributes. That purpose, and the debate around it, is often obscured by unsubstantiated claims and wild accusations from the political fringes. Anyone who thinks that we happily pass up the opportunity to raise revenue while increasing our popularity has probably never met a Treasury minister – or perhaps even a politician. And they’ve certainly never met an HMRC tax inspector!

But we are still determined to do more to maintain a level playing field for all taxpayers, and stop those who seek to game the system at the expense of others. The actions we are taking and our consultation today should reaffirm our determination to ensure that everyone pays their fair share, whether companies or individuals. I hope that with the co-operation and input of all who have an interest in seeing a fair and transparent tax system, we can deliver a system that is robust to those few who might exploit it.

Thank you.

January 23, 2016
Philip Hammond – 2012 Speech to the Royal College of Defence Studies

Below is the text of the speech made by Philip Hammond, the then Secretary of State for Defence, to the Royal College of Defence Studies on 23 July 2012.

Introduction

Thank you for inviting me here to speak to you.

And as you approach the end of your course I know you will have made the most of the opportunity presented here at the Royal College of Defence Studies to get to grips with some of the very complex issues facing defence and defence diplomacy.

Many of which are common to the United Kingdom and its allies and partners.

The international nature of this course is one of its strengths.

And your generation of leaders will have a key role in addressing these challenges; and in forging the bilateral and multilateral defence relationships that the defence and security arrangements of every country, even the United States, is likely to rely on in the future to protect its national security.

So I want to talk this morning about some of the strategic challenges we’re facing in UK defence and more widely.

And pose you some of the questions that will have to be answered during your generation’s tenure in the top jobs.

Strategic picture

Strategically, the world is a far less certain and, in some ways, a less threatening place than it was 25 years ago.

Then we faced an adversary with the means and the intent, if an unpredictable and paranoid leadership.

Nowadays at least the paranoid leaderships are still struggling to obtain the means!

More broadly technology is racing ahead; changing the way we protect critical infrastructure more likely to be rendered inoperable through a computer virus than a bombing raid, requiring multi-level C4ISTAR; capabilities which are not as obvious to the public as an aircraft carrier, a tank or a jet.

The rise of ‘invisible’ capabilities like this presents a challenge to politicians who need to demonstrate to the public who are paying for them, how we are spending their money and how we are keeping them safe.

At a geo-political level, the dispersion of power that began as the Berlin Wall crumbled has gathered pace with the emergence of new potential military powers and greater strategic competition between growing economies, both regionally and globally.

Alongside this, the impact of globalisation means there are diminishing levers available to individual national governments to effect change, manage their economies, and protect their national security.

The economic realities facing the mature economies show how linked we are; how easily contagion can spread.

In the medium term, those charged with the task of protecting national security, in economies set for relative decline as the pattern of wealth adjusts, will have to do so in an environment of constrained resources

This is the future in which you will lead in your respective services and in your respective countries.

And although this future will be unpredictable and volatile, we can clearly see some of the issues that will dominate.

Economic means

First, the economic backdrop.

Economic strength underpins national security.

It is a requirement for generating military capability.

Look at what is driving the changed pattern of military power today.

Look at what settled the Cold War.

Without strong economies and public finances it is impossible to build and sustain, in the long-term, the military capability required to project power and maintain strong defence.

That is why, today, the debt crisis should be considered the greatest strategic threat to the future security of western nations.

And it is also why, although NATO has often talked of distributing the burden of collective defence more equitably, in the current fiscal climate, it is essential that we no longer talk, but begin to act.

The reality is that too many member states are failing to meet their financial responsibilities to NATO, and so failing to maintain appropriate and proportionate capabilities.

Too many are opting out of operations or contributing but a fraction of what they should be capable of.

But we have to be realistic.

The economic and fiscal circumstances in which most developed countries find themselves makes this problem difficult to fix in the short term.

Across the alliance, aggregate defence expenditure is certain to fall in the short term and, at best, recover slowly in the medium term.

So more money is not going to be the answer.

So, the challenge is to maximise the capability we can squeeze out of the resources we have available.

Political will

Which brings me to my second point: alliance structures are only as strong as the political will of individual nations to meet their responsibilities.

It matters that NATO countries meet their commitments on funding defence, to ensure the means to protect our collective security.

But it is no good having the means if you lack the will to use them.

Libya showed what can be achieved when many of the stars are in alignment:

The UN Security Council, NATO, regional powers, the political will of those with the capabilities to act, and of course the will of the majority of the Libyan people.

But it also showed quite starkly the imbalances in NATO.

Imbalances in the hardware (and increasingly software) available to the alliance from national contributions.

But also imbalances in the will to act, the will to deploy, the determination to take part and commit nationally owned capabilities that have absorbed many billions of taxpayers’ cash in order to make us all collectively safer.

There are untapped reserves of resource in European NATO which need to be tapped to support our collective security.

Over the next few years, the United States will put into practice its ‘tilt’ to the Asia-Pacific theatre, a focus that is very much in our interests as the US rise to meet the strategic challenge set by the emergence of China.

The US will expect Europe to do more to of the heavy lifting to ensure security in our own region, and our near abroad: the Middle East, North Africa, and the Horn of Africa.

How European nations respond to this pivot will set the context for the multilateral environment British armed forces and others will operate in.

This brings me to my third point: cohesion of purpose.

Meeting threats

We need to confront, head on, a real tension within the NATO alliance: basically to answer the question, what is NATO for in the 21st century?

The threat from a monolithic Soviet Union no longer exists.

And the approach to Russia differs across the alliance.

For those of us further back, west of the old iron curtain, the threat is no longer territorial, but global terror and rogue states.

So a passive defence of national territory is no longer adequate protection for our citizens.

We are starting from a reality that it is much better to fight in the space of our adversaries rather than at home.

Of course this is relatively easier to do if your adversary is a terrorist, rather than a state.

And this requires rapidly deployable, adaptable, agile, flexible, expeditionary forces.

So this is what the UK’s strategic defence and security review was all about; responding to these 3 drivers: the economics, the evolving alliance pattern, and the evolving threat pattern.

Shaping the spread of capabilities we will maintain, in the face of fiscal restraint, to the future character of warfare, and to maintain national security by acting at distance.

But.

The future posture of Russia is by no means certain.

And with political change sweeping across North Africa and the Arab world, change that is far from at an end, far from predictable, and has the potential to leave a less secure and less safe neighbourhood, we cannot rule out the return of a strategic threat to territorial Europe.

So this has been about striking the right balance between our own direct national needs and those of the NATO alliance upon which we continue to rely for collective security.

And recognising the likely future shape of operations in that context.

The future shape of operations

You will have had the opportunity during your course to look at current operations and to draw lessons from them for the future character of warfare.

Libya showed the utility of precision weapons in an era where minimising collateral damage and civilian deaths will be part of the strategic objective.

And it also exposed shortfalls in the European contribution to NATO.

But Libya has tested another concept.

The utility of air power as an alternative to ‘boots on the ground’.

Libya has shown how air power can provide politicians like me with political choices short of intervention on the ground.

But I have not drawn the conclusion that ground intervention will be unnecessary in the future.

There was a ground campaign in Libya;

It could not have proceeded without NATO airpower support.

But it was decisive.

And it was undertaken by Libyans, not NATO troops.

After 10 years of enduring campaigns, you do not have to be a political sage to recognise that the public’s future appetite for open ended interventions is limited.

Of course, we do not yet know the end outcome of the Libya intervention.

Displacing the old regime was, relatively, the easy bit.

And what comes after is not yet completely clear.

So modern warfare requires firepower and political sensitivity;

And that requires a deep understanding of the situation on the ground.

In Afghanistan, our troops have had to wear the face of both the warrior and the diplomat, fighting one moment, and taking tea with the elders the next.

The political dimension of warfare is crucial to success.

You can win the battle but lose the war unless you are focussed on what you really want to achieve.

And it will usually be the case that force of arms alone cannot deliver victory.

That is certainly the case in Afghanistan.

That is why the comprehensive approach, marrying politics, finance, military capability, diplomacy, development, not just across national government, but internationally too, will be so important in the future.

So, against that backdrop, let me bring this discussion closer to home and say something about the future shape of the UK’s armed forces.

The future shape of UK armed forces

Afghanistan is still very much the priority in terms of operations.

But the end of the combat mission is now in view.

And, intellectually, we have moved on to look beyond 2014 at the shape of the forces we will need for the future.

The needs of the mission in Afghanistan, and before it Iraq, have dominated for a decade.

For all the dangers and complexities of those missions they have provided some predictability.

People have known, often 2 years in advance, when they are going to be deployed; they know how long they are going to be deployed for; often they have known exactly where they are going to be deployed to before they go.

We have bent our military, our army in particular into the shape required for this 6 month rotational enduring conflict in Afghanistan.

But, in the process, we have lost some contingent capability.

Post 2014, the move from enduring campaign to contingency signals an end to the predictability of the roulement cycle;

It heralds a future force geared toward being ready to deal with the unexpected and unplanned.

And we make this change against a background of fiscal constraint driven by the economic health of the country as a whole, and the legacy of mismanagement in the defence budget in particular.

The transformation we are undertaking is challenging, probably the most complex change programme being undertaken anywhere in the western world at the current time.

The black hole that existed in the defence budget, the weakness of the equipment programme, and the shape of the country’s finances, have militated against simply bailing the budget out.

It would be hard to justify excluding the defence budget, the fifth largest call on the public purse, from the programme to exert fiscal control.

Balancing the books and creating a sustainable forward defence programme has meant reducing personnel numbers, retiring some capabilities, and taking some calculated and managed risks.

But as I told an audience in Washington last week, it is far better to have a smaller but well-equipped and well-trained force; with an equipment programme that offers a high level of confidence that we will deliver it; giving our armed forces the ability to plan for the future.

With the announcements I have made over the last couple of months on the defence budget, the equipment programme, army 2020 and the reserves we have put in place the vision set out in the SDSR of sustainable armed forces, equipped with some of the most capable and most technically advanced platforms in the world, configured to respond to the unexpected and to go anywhere to do it.

And we have also set out a blueprint for the reform of the management of defence:

Renewing the way strategic direction is provided;

Pushing authority and accountability down the chain of command;

Encouraging innovation and budgetary responsibility;

And developing a new strategy for the procurement of defence equipment.

Seeking to instil private sector skills and disciplines to our acquisition process, driving up productivity, by bringing a private sector partner into the process.

And creating clearer and harder relationships between the different functions in the defence procurement chain.

To read some of the comment in the media, often fuelled by retired officers whose view of the world was shaped in the Cold War era, you would think that Britain was getting out of the force projection business altogether.

Nothing could be further from the truth.

Even when this programme is complete, we will still expect to have the fourth largest defence budget in the world;

Exceeding the NATO standard of 2% of GDP;

Spending £160 billion on our equipment programme over the next 10 years;

Delivering the next generation of military technology and platforms that will help provide a battle-winning edge;

So this is the picture:

Smaller armed forces, but better equipped and confident that they will receive the equipment that has been promised;

Agile, high-tech, capable of conducting the full spectrum of operations;

Structured to allow rapid reaction and expeditionary warfare;

Able to deploy overseas and sustain a brigade-sized force indefinitely, or a division-sized force in time of need.

Able to command in the coalition context and more interoperable with our main allies;

Fully integrated between regular and reserves, with predictable obligations for the reservists that will require a real commitment to service;

And a more systematic use of contractors for support and logistics; allowing greater focus of military manpower on fighting tasks;

And, crucially, structured to be able to generate mass and capabilities if the threat picture changes or the fiscal position eases.

Conclusion

These are the British armed forces that some of you will be leading in, or for our partners overseas, the British armed forces you will be operating with.

And many of you who are from overseas will be seeing similar transformations in your own militaries over the next few years.

All of you are here because you have been identified as having the qualities needed for top level responsibilities.

You know that the moral component of leadership is one of the most important.

If this transformation is to be realised, and national and collective security to be guaranteed, you will need to be focussed, positive, full of ideas, prepared to change, to challenge convention, and willing to drive change in others, inspiring those around you.

And there is a challenge at a political level too, for people like me.

As Secretary of State, I have responsibility for defence but as a cabinet member, I have responsibility to look wider and help to balance national priorities.

When an immediate or existential threat shrinks, the public appetite to fund defence shrinks with it.

We are lucky in the UK, particularly compared to other European nations, that the public feels a strong affinity with our armed forces and has a greater inclination to give defence a higher priority than many of our neighbours.

But the legacy of Iraq and Afghanistan has undoubtedly left us a public which is without appetite for enduring campaigns.

And politicians need to think carefully about how we are going to maintain public support for defence spending in the years ahead;

Especially when more and more of the capabilities we are investing in will not be traditional military assets, and indeed will often be invisible to taxpayers.

There are many actions in hand to manage the transition from a period of enduring campaigns to one of contingent readiness; and I have described a few today.

But we have answered by no means all the questions:

Questions about the future focus of NATO;

About how we maximise the military effect that we get from limited budgets across the alliance;

About the balance of capabilities between traditional kinetic effect and investment in C4ISTAR, cyber and space;

About the type of warfare we need to prepare to fight;

And about the future of European defence industries in the face of rapidly changing export markets and shrinking domestic purchasing power.

These, and many other questions, will form the challenges that the next generation of military and political leaders will face over the coming years.

And I look forward to hearing your thoughts on them!

January 23, 2016
David Lloyd George – 1918 Speech on Press Relations

Below is the text of the speech made by David Lloyd George, the then Prime Minister, in the House of Commons on 11 March 1918.

I will endeavour to answer as concisely as I can the two or three points in reference to the Press relations with the Government which have been recently raised.

There are two Ministers who, when they joined the Government, had control of newspapers — Lord Rothermere and Lord Beaverbrook. Lord Northcliffe holds no Ministerial office; I will state later what his position is. In every great Allied country — America, France, and Italy — there are journalists and newspaper proprietors who hold high office in the Governments of their respective countries, and if it be suggested that owners or editors of newspapers are disqualified by reason of their ownership or profession from holding Ministerial positions in this country, I must challenge that contention. But the rule which applies to all company directors and professional men joining the Government must be applicable also to newspaper men, and as soon as the two Ministers were appointed they gave up all direction of their papers.

As to the fitness of these gentlemen for their offices, they are both men of exceptional ability. One of them — Lord Rothermere — had already reorganised an important Department of the War Office, which had previously been criticised severely by two Committees appointed at the instance of the House of Commons. His administration of that Department, according to the testimony of the Secretary of State, has been an unqualified success. The other Minister —Lord Beaverbrook — had, at the request and on behalf of the Canadian Government, organised a Canadian propaganda, which is acknowledged to be amongst the most successful, perhaps the most successful, piece of work of its kind on the Allied side. When, for reasons of health, Lord Beaverbrook some time ago intimated his desire to give up his direction of the Canadian propaganda, the Prime Minister of the Dominion urged him to reconsider his decision — in a letter which has been placed before me, giving the warmest recognition to the services he had rendered.

As to Lord Northcliffe, he is one out of hundreds of great business men, who, in this great national emergency, have voluntarily and gratuitously given their services to assist the State in the work for which their experience has especially qualified them. The Government had come to the conclusion that the important Department of offensive and defensive warfare connected with propaganda, which the enemy have used with such deadly effect in Russia and Italy, was far from being adequate to its task, and we had reluctantly come to the conclusion that it was impossible to make it efficient without a complete reorganisation of the direction. The late Government had appointed two journalists and a Foreign Office official to direct the work. Without in the least disparaging their professional ability, not one of them had the necessary experience in the acquisition and distribution of news in foreign countries. The present Government supplemented their efforts by appointing a Committee of distinguished newspaper proprietors and editors to assist. We found this quite insufficient to attain the desired end, as the Committee could exercise no real authority. It was therefore decided to put men experienced in this class of work in charge of the different branches of activity.

Lord Northcliffe, who, in addition to being a great news organiser, has made a special study during the War of conditions in enemy countries, was invited to take charge of that branch. He consented to do so without any Ministerial position. No man better qualified for that difficult task could, in my opinion, be found in the Empire, and the Government. are grateful to him for undertaking it. Propaganda in all the other Allied countries and in Germany is conducted almost exclusively by experienced newspaper men, and in spite of all the inevitable prejudices which we apprehended might be excited, the Government came to the conclusion that they must follow that example as the only means of securing an effective presentation of our case in Allied, Neutral, and enemy lands.

Let me add most emphatically that lay one object in making these, as all other appointments in the Government, is to secure the men who, in my judgment, are the best qualified to do the work efficiently for the country. As to the suggestion that I was in any way responsible for attacks on admirals and generals, I have already stated in this House that that charge is untrue. As to the suggestions which have been made that an official on my staff had inspired paragraphs attacking admirals and generals, I have thoroughly investigated that matter, and have no hesitation in saying that the imputation is absolutely without foundation, and constitutes a gross injustice to an able Civil servant. [AN HON. MEMBER: “What about Northcliffe?”] Should there be any further explanations required, I shall be pleased to give them in Debate this afternoon, but I propose to wait until I have heard all that hon. Members have to say on the matter before replying.

January 22, 2016
David Lloyd George – 1918 Statement on the War

Below is the text of the speech made by David Lloyd George, the then Prime Minister, in the House of Commons on 19 February 1918.

I beg to move, “That Mr. Speaker do now leave the Chair.” In moving that you do now leave the Chair, I have a statement to make to the House on a matter in which not merely the House of Commons but the country are very deeply interested. In doing so, I would like to say that I hope, whatever may be said to-day, this matter will be treated as a question of policy, and not of personalities. If there has been any delay or apparent hesitation in the announcement of any decision by the Government it is not because there is any doubt in their minds in regard to that policy, but because they were very anxious that the decision, when it was announced, should be free from any element of complication about personalities. The Government were extremely anxious to retain the services of Sir William Robertson as Chief of Staff as long as that was compatible with the policy on which they had decided, in common with the Allied Governments, after prolonged consultation at Versailles. It is a matter of the deepest regret to the Government that it was found to be incompatible with that policy to retain the services of so distinguished a soldier. If the policy be right, no personalities should stand in the way of its execution, however valuable, however important, however distinguished. If the policy be wrong, no personalities and no Government ought to stand in the way of its being instantly defeated.

What is the policy? I have already explained to the House—I am afraid rather imperfectly on the last occasion, but to the best of my ability—what is the policy of the Government in this respect. It is not merely the policy of this Government. It is the policy of the great Allied Governments in council. There is absolutely no difference between our policy and the policy of France, Italy, and America in this respect. In fact, some of the conclusions to which we came at Versailles were the result of very powerful representations made by the representatives of other Governments, notably the American Government. That policy is a policy which is based on the assumption that the Allies hitherto have suffered through lack of concerted and co-ordinated effort. There was a very remarkable quotation in yesterday’s “Manchester Guardian,” which, if the House will permit me, I will read, because I think it gives the pith of the whole controversy: Some great soldier once said that to find the real effective strength of an alliance you must halve us nominal resources to allow for the effect of divided counsels and dispersed effort Our purpose and our policy has been to get rid of that halving of the resources of the Allies, so that, instead of dispersion of effort, there should be concentration and unity of effort. There is a saying attributed to a very distinguished living French statesman, which is rather cynical—that, The more he knows of this War, the less convinced he is that Napoleon was a great soldier, for the, simple reason that Napoleon had only to tight coalitions all his life. I ventured some time ago to make an excursion into the general history of the War, in order, without blaming anyone, to point out what the Allies have suffered in the past from lack of co-ordination of effort. You have only to look at 1917, to find exactly the same set of circumstances inevitably affecting, or rather diminishing, the power of that concentration which otherwise would have been possible, in order to counteract the efforts which were made by the Germans, and to counteract the collapse on the Russian front. Anyone who examines closely the events of 1917, as well as the events of the previous year, will find plenty of argument for some change of machinery in order to effect greater concentration than has hitherto been achieved in the direction of the Allied resources. That is the reason why, after the Italian defeat, the Allied Governments, after a good deal of correspondence and of conference, came to the conclusion that it was necessary to set up some central authority, for the purpose of co-ordinating the strategy of the Allies. At the last Conference at Versailles it was decided, after days of conference, to extend the powers of that body.

In discussing the action at Versailles, I am necessarily hampered by the Resolutions arrived at, not merely by the military representatives, but by the separate Governments, that it was not desirable to give any information in regard to the general plan which was adopted. But I think I can, within these limits, make quite clear where controversy has arisen, and ask the judgment of the House on the action of the Government as to the merits or demerits of the dispute. The general principle laid down at Versailles was agreed to whole-heartedly by everybody. I will come later to where controversy arose. There was no controversy as regards policy, but only as to the method of giving effect to it. This obviates the necessity for me to discuss the plan itself, because the House may take it that as far as the plan itself was concerned, there was, and there is now, as far as I know, the most complete agreement. Had there not been, I am sorry to say I could not have gone into it; but it is not necessary. There was agreement as to policy. There was agreement that there must be a central authority, to exercise the supreme direction over that policy. There was agreement that the authority must be an Inter-Allied authority. There was complete agreement that the authority should have executive powers. The only question which arose was as to how that central authority should be constituted. That is the only difference. There was no difference about policy; no difference about the plan; no difference about executive powers; no difference about it being necessary to set up an Inter-Allied authority with control; and no difference about its having executive powers. The only difference was as to how that central authority should be constituted. That was the whole issue. In my judgment—and I will give the facts later—agreement was reached at the Conference, even in regard to that.

Let me give the stages of discussion at the Conference. Several proposals were put forward. We sat for days, and examined those proposals very carefully. I am sure that no one went there with a preconceived plan in his mind. Everybody went with a full desire to find the best method, and not to advocate any particular proposal. All these various proposals were, one after the other, rejected, until we came to the last. I will explain these various proposals, because I can do that without in the least giving, away the plan of operations. The first proposal was favoured in the first instance by the French and the British General Staff. I do not think the American— that is my recollection—or the Italian Staffs took quite the same view; but the French and British Staffs were in favour of the proposal by which the central body should be a council of chiefs of the Staffs. That was the first proposal. I want to show that the very proposal over which controversy raged later was examined at that Conference, and it was the first proposal examined. It was most carefully considered, and I will give the House the case put forward for it, as I want the House to hear on what grounds it was recommended.

It was essential that each of the representatives should be in intimate touch with his own War Office. He must know the man-power, the state of morale, the-medical equipment, shipping, and Foreign Office information, and nobody could know this so well as the Chief of the Staff. Therefore, the new body ought to consist of the Chiefs of the Staffs. It was also naturally felt that there were serious constitutional objections to any system which implied that an Inter-Allied body was to come to decisions affecting the British Army. That is the case which was put forward for a body consisting of Chiefs of the Staffs. The Council examined that very carefully, and discussed it; and let me point out to the House of Commons that this was not a discussion between politicians, but a discussion where all the leading generals were present. The Commanders-in-Chief were there, except the Italian Commander-in-Chief; the French, British, and American Commanders-in-Chief and the Chiefs of the Staffs, as well as the military representatives at Versailles, and the representatives of the Government. It was a free discussion, where generals took part with exactly the same freedom as Ministers. There was no voting; in fact, there was no question of voting. I have no hesitation in saying that, on examination, the proposal completely broke down, and was rejected on the ground of its being unworkable.

I will give the House the reasons why it was regarded as unworkable. The first reason was that the members of the Council felt that the members of the new Executive body which was going to have this great control over co-ordinating the forces of the Allies must not only know about their own armies and their own fronts, but must also be informed of the conditions on all fronts and in all the armies of all the nations, because you are not dealing merely with the British Army, you are dealing with four great armies, and you have to get information from every quarter. Versailles has become a repository of information coming from all the fronts—from all the Armies, from all nationalities, from all the Staffs., from all the Foreign Offices—and that information is co-ordinated there by very able Staffs; and I have no hesitation in saying that they have information there for that reason that no single War Office possesses, because you have information from all the fronts co-ordinated together.

What is the second reason? We felt that this Executive body, in face of the serious dangers with which we have been confronted this year, must be in continuous session, in order to be able to take decisions instantly required. Nobody could tell where a decision would have to be taken. The men who take the decision ought to be within half-an-hour’s reach. Eight hours, ten hours might be fatal. We felt it was essential that whatever body you set up should be a body of men who were there at least within half-an-hour of the time when the Council would have to sit, in order to take a decision. Nobody knows what movement the Germans may make, There may be a sudden move here or there, and preconceived plans may be completely shattered by some movement taken by the enemy. Therefore, it was essential that the body to decide should be a body sitting continuously in session.

The third reason was this: Not merely have they to take decisions instantly, but they ought to be there continually sitting together, comparing notes, and discussing developments from day to day, because a situation which appears like this to-day may be absolutely changed to-morrow. You may have a decision in London, and telegraph it over to Versailles, but by the time it reaches there you may have a complete change in the whole situation. Therefore, we felt it was essential that these men should be sitting together, so that whatever change in the situation took place they could compare notes, discuss the thing together, and be able to come to a decision, each helping the other to arrive at that decision.

There is a further reason. A Council of Chiefs of the Staffs involved the creation of another and a new Inter-Allied body conflicting with Versailles. This point was put by the American delegation with very great force, and it became obvious to everybody there the moment we began to examine the proposal—although on the face of it it looked very attractive—that the functions which the Executive body was to exercise could not be properly performed by a body of Chiefs of the Staffs stationed” in the various capitals. On the other hand, if the Chiefs of the Staffs sat in Paris, it meant that the Governments would be deprived for long periods of their principal military advisers, at a critical time, and at a time when action on other vital matters on other fronts might be required. Therefore, I have no hesitation in saying that the moment it came to be examined— although we examined it with the greatest predisposition in its favour—it was found to be-absolutely unworkable, for the simple reason that the moment the Chief of the Staff went to Paris, he would cease to be the chief military adviser of the Government, and either Versailles would have to be satisfied with a deputy who could not act without instructions, or the Governments would have to be satisfied with a deputy who was not their full military adviser. For that reason, the Supreme Council rejected that proposal with complete unanimity. I think I am right in saying that the proposals were withdrawn. It was felt even by those who put them forward that, at any rate, without very complete changes, those proposals were not workable.

Then it was suggested by the French Prime Minister that it would be desirable for each national delegation to think out some other plan for itself, and to bring it there to the next meeting, and that was done. It is very remarkable that, meeting separately, and considering the matter quite independently, we each came there with exactly the same proposal the following morning, and that proposal is the one which now holds the field. I hesitated for some time as to whether I should not read to the House the very cogent document submitted by the American delegation, which put the case for the present proposal. It is one of the most powerful documents—I think my right hon. Friends who have had the advantage of reading it will agree with me—one of the ablest documents ever submitted to a military conference, in which they urged the present course, and gave grounds for it. I think it is absolutely irresistible, and the only reason I do not read it to the House is because it is so mixed up with the actual plan of operations that it will be quite impossible for me to read it without giving away what is the plan of operations. I only wish I could. I hesitated for some time, being certain if I read that to the House of Commons, it would not be necessary for me to make any speech at all, because the case is presented with such irresistible logic by the American delegation that I, for one, do not think there is anything to be said against it, and that was the opinion of the Conference.

What happened? We altered it here and there. There was a good deal of discussion. It was pointed out that there was a weak point here, and a weak point there. Then someone suggested how to improve it. It took some hours, but there was not a single dissentient voice so far as the plan was concerned. Everybody was free to express his opinion —not merely Ministers, but generals. The generals were just as free to express their opinions as the Ministers, and as a matter of fact Field-Marshal Sir Douglas Haig did call attention to what we admitted was a weak point in the proposal. I think he called attention to two points. We soon realised that there were weak points, we promised to put them right, and some of the time occupied was time occupied in adjusting the arrangements arrived at at Versailles to meet the criticisms of Sir Douglas Haig. They were points in regard to the Army and the Army Council, constitutional points, not points that went to the root of the proposal itself. I want the House again, at the expense of repeating myself, to recollect that this passed the Versailles Council without a single dissentient voice as far as all those who were present are concerned, and, as far as I know, it was completely accepted by every military representative present. I reported to the Cabinet as soon as I returned the terms of the arrangement. I am not sure that it had not been circulated beforehand. I rather think it had, and then I made my report to the Cabinet. Sir William Robertson was present, and nothing was then said or indicated to me that Sir William Robertson regarded the plan as either unworkable or dangerous.

Therefore, I think I was entitled to assume that, although some of the military representatives at the beginning of the Conference would have preferred another plan, that they, just like our-selves, had been converted by the discussion to the acceptance of this plan. There was nothing to indicate that anyone protested against the plan which was adopted at Versailles. During the week— that is, the week after I returned from Versailles—the Army Council considered the arrangement, and made certain criticisms from the constitutional point of view. I considered these very carefully with the Secretary of State for War, who has throughout put Sir William Robertson’s views before the Cabinet with a persistent voice, and I considered very carefully with my colleagues all these constitutional points. Having considered them, we made certain arrangements, with a view to meeting the constitutional difficulties of the Army Council. I will give substantially the arrangements which we made, and which I understood from the Secretary of State for War completely removed the whole difficulties experienced by the Army Council in the carrying out of the arrangements. I was naturally anxious that this arrangement should be worked whole-heartedly by the whole of the military authorities, whether here or in France. I was specially anxious that the Commander-in- Chief, who is more directly concerned in the matter than even the Chief of Staff, because it affected operations, perhaps, primarily in France, should be satisfied that the arrangements that were made were such as would be workable as far as he was concerned. Therefore, before I arrived at this arrangement, I invited him to come over here. I had a talk with him, and he said that he was prepared to work under this arrangement. I will give the arrangement: The, British permanent Military Adviser at Versailles is to become a member of the Army Conicl— That is, in order to get rid of the constitutional difficulty that someone may be giving an order about British troops who is not a member of the Army Council. He was, therefore, made a member of the Army Council. That was agreed to on all hands.

He is to be in constant communication with the Chief of the Imperial General Staff, and is to be absolutely free and unfettered in the advice he gives as a member of the Board of Military Representative; at Versailles. It would be idle to send a man there simply with instructions in his pocket that he is to agree to certain things and to nothing else. If he goes there, he must go to discuss with his colleagues, who are equally free and unfettered, to consider the facts, and to give advice according to what he hears from the others, as well as on the facts submitted to him— He is to have the powers necessary to enable him to fulfil the duties imposed upon him by the recent Versailles decision. The Chief of the Imperial General Staff is to hold office under the some conditions and with the same powers as every Chief of the Imperial General Staff up to the appointment of General Robertson, remaining the supreme military adviser of the British Government. I want the House to take in that fact. It was part of the arrangement that the Chief of the Staff was to remain the supreme military adviser of the Government— He is to accompany Ministers to the meetings of the Supreme War Council as their adviser, and is to have the right to visit France and consult with any or all of the military representatives of the super me War Council. What does that mean? It means that the representatives at Versailles must have the most perfect freedom to discuss plans and to recommend plans. If the Commanders in Chief do not approve of them—because, by the arrangement they were to consult, and be in constant communication with, the Commanders in Chief—or, if there was any difference of opinion among the various representatives, the Governments were to decide. There is no derogation of the power of the Government—none. In that case, who is to advise the Government? The advice to the Government would be given by the Chief of the General Staff, so that if there were a meeting of the Supreme War Council to decide differences of opinion between either the military representatives or the Commanders -in-Chief, the Government decide upon the advice of the Chief of the General Staff. Do not let anyone imagine that differences of opinion are going to begin now. I do not want to go into the matter, but difference of opinion is inevitable. It is no reflection upon them. They are men of independent mind, they are men of strong character; they are men of definite opinions, and, of course, there are differences of opinion, and when there are differences of opinion now, there is no one to decide but the Government, and the Chief of the Imperial Staff is still to be the supreme adviser of the Government in any differences that may in these circumstances arise. That is the position as far as the decision at Versailles is concerned.

We were under the impression that all the difficulties, the constitutional and technical difficulties, had been completely overcome by this document, which had been shown to Sir Douglas Haig. Sir William Robertson, unfortunately, was away at the time—I think he was at Brighton—I am sorry now to learn that he was ill. At any rate, he was away, otherwise he would have been present at the Conference. We were under the impression—I certainly was under the impression—that the last of the difficulties had been removed, and, having been removed, as I was under the impression that Versailles had become the more important centre for decision, the Government decided to offer the position to Sir William Robertson. It was only afterwards that, at any rate, I realised that Sir William Robertson was unwilling to acquiesce in the system, and that he took an objection, not on technical grounds or on constitutional grounds, but on military grounds, to the system which Versailles had decided unanimously to adopt. I certainly had not realised that he took that view. We offered him, first of all, the position at Versailles. He could not accept it. We then offered him the position of the Chief of General Staff, with the powers adapted to the position which had been set up at Versailles. That, I am sorry to say, he also refused. He suggested a modification of the proposals, by making the representative at Versailles the Deputy of the Chief of Staff. We felt bound, after consideration, to reject that proposal, for two reasons. It involved putting a subordinate in a position of the first magnitude, where he might have to take vital decisions, under instructions given him beforehand, before the full facts were known, before either had heard what the other representatives had got to say, before he even knew what alternative plans might be put forward by the representatives, or by altering those instructions after consultation with the Chief, who was a hundred miles away, and who was not in touch with the every-day developments, or with the arguments that had been advanced at that particular Conference — an impossible position for any man to take up.

The second reason is this: If you send a deputy there, the representative of the British Army would be in an inferior position to any other member of the Council, and he could not, therefore, discuss things on equal terms. We felt it was, essential that the British representatives should be equal in responsibility and authority to the representative of any other country on that body. I know it is said that General Foch was put on that body. General Foch is within twenty-five minutes of Versailles, and, if any emergency arose, within twenty-five minutes he could be present. That is not true of any other Chief of Staff. He can be at his office in the morning, and in twenty-five minutes he can be at Versailles. There is no other Chief of Staff to whom that would be in the least applicable. Travelling under any conditions from here to Paris involves time, and it is not so easy to do it now. You have got to consider a good many things when you consider what time you can go. You cannot say, start now and be there in eight hours. In a war that makes all the difference—it is vital. Therefore, we considered that it was a totally different position.

The French felt so strongly that you cannot do your business by deputy that they took away the man they had, and put General Foch there. They knew that you cannot have deputies acting on the Board. You have to get the man himself, whoever he is, to take the position. I am sorry to take up the time of the House, but I want to give a very full explanation, as full as it is compatible with not giving away information to the enemy. Sir William Robertson came to the conclusion that, under the conditions laid down, he could not accept either position, and the Government, with the deepest and most genuine regret, found itself obliged to go on without him. We had to take the decision, and it was a very painful decision, of having to choose between the policy deliberately arrived at unanimously by the representatives of the Allied Powers, in the presence of the military advisers, and of retaining the services of a very distinguished and a very valued public servant.

When it came to a question of policy of such a magnitude, we were bound to stand by the arrangement to which we had come with our Allies. Let me say at once that I do not wish in the least to utter a word that would look like a criticism of the decision of Sir William Robertson that he could not see his way to carry out the arrangement. There is not a word to be said about the decision to which he came. It is better that it should be carried out by those who are thorough believers in the policy concerned. With great public spirit, he has accepted a Command which is certainly not adequate to the great position he has occupied, and I wish there had been something else that would be more adequate to his great services. I would like to say just one word about Sir William Robertson. He has had a remarkable and a very distinguished career, and he is now in the height and strength of his powers; in fact, they are only in the course of development. He has great capacity and great strength of character, he is a man of outstanding—and, if I may say so, as one who has been associated with him for two or three years—not merely outstanding, but a most attractive personality. During the whole of those two years, so far as our personal relations are concerned, not merely have they been friendly, but cordial. During the whole time of this final controversy not a bitter word has been said on either side, and at a final interview—where I did my best to urge Sir William Robertson to take one or other of these alternatives—we parted with expressions of great kindliness. It is a matter of very deep regret to me. All the hesitation that has taken place has taken place because the Government were trying this and trying that, in order to secure Sir William Robertson’s acceptance; and although I knew it was laying the door open to the criticism that the Government did not know its own mind, I preferred that to anything which would lay us open to the charge that we were in the least hustling Sir William Robertson. I do not regret that the delay has taken place.

I have always recognised the difficulties in the way of securing co-operation between Allies. There are practical difficulties— genuine practical difficulties. You have to reconcile the unity of the Allies with the unity of the Army. There were some friends of ours who undoubtedly had honest misgivings that the arrangement we made, whereas it might secure the first, was imperilling the second. That would be a misfortune. You would not help the former in that case, and I fully realised that. Let me say this, if the House were to accept the Government’s explanation to-day, I would not regard it as a mandate not to take all the necessary steps compatible with the main purpose of Allied unity to remove every legitimate cause for anxiety on that score. Quite the reverse. I propose to invite from the highest military authorities suggestions for the best means of removing any possible anxiety in the mind of anyone that in any scheme put forward in order to secure concert and combined action between Allies, you are not doing something to impair the efficiency and command of your own Army. Therefore, we shall certainly pursue that course, and if any suggestion comes from any military quarter to make the thing work even better from that point of view, certainly not merely shall we adopt it, but we shall seek it, and we mean to do so.

There are other difficulties, not merely practical difficulties—there are difficulties due to national feeling, to historical traditions. There are difficulties innate in the very order of things. There are difficulties of suspicion—the suspicion in the mind of one country that somehow the other country may be trying to seek some advantage for itself. All these things stand in the way of every Alliance. There are also difficulties due to the conservatism of every profession—I belong to a profession myself, and I know what it means—the conservatism of every profession, which hates changes in the traditional way of doing things. All these things you have always to overcome when there is any change that you make, and they ought not to be encouraged too much on these lines. I agree that reasonable misgivings and reasonable doubts ought to be removed. If there be real difficulties, those ought to be examined and surmounted. But suspicion, distrust— those ought to be resolutely discouraged among Allies. Trust and confidence among the Allies is the very soul of victory, and I plead for it now, as I have pleaded for it before.

We have discussed this plan, and re-discussed it with the one desire that our whole strength—our whole concentrated strength—should be mobilised to resist and to break the most terrible foe with which civilisation has ever been confronted. I ask the House to consider this: We are faced with terrible realities. Let us see what is the position. The enemy have rejected, in language which was quoted here the other day from the Kaiser, the most moderate terms ever put forward, terms couched in such moderate language that the whole of civilisation accepted them as reasonable. Why has he done it? It is obvious. He is clearly convinced that the Russian collapse puts it within his power to achieve a military victory, and to impose Prussian dominancy by force upon Europe. That is what we are confronted with, and I do beg this House, when you are confronted with that, to close down all controversy and to close our ranks.

If this policy, deliberately adopted by the representatives of the great Allied countries in Paris, dose not commend itself to the House, turn it down quickly and put in a Government who will go and say they will not accept it. But it must be another Government. But do not let us keep the controversy alive. The Government are entitled to know, and I say so respectfully, to know to-night whether the House of Commons and the nation wish that the Government should proceed upon a policy deliberately arrived at, with a view to organising our forces to meet the onset of the foe. For my part—and I should only like to say one personal word—during the time I have held this position, I have endeavoured to discharge its terrible functions to the utmost limits of my capacity and strength. If the House of Commons to-night repudiates the policy for which I am responsible, and on which I believe the saving of this country depends, I shall quit office with but one regret—that is, that I have not had greater strength and greater ability to place at the disposal of my native land in the gravest hour of its danger.

January 22, 2016
David Lloyd George – 1917 Speech on Supreme War Council

Below is the text of the speech made by David Lloyd George, the then Prime Minister, in the House of Commons on 14 November 1917.

The best way for me to answer this question is to read to the House the actual terms of the agreement between the French, Italian, and British Governments for the creation of a Supreme War Council for the Allies.

1. With a view to the better co-ordination of military action on the Western Front, a Supreme War Council is created, composed of the Prime Minister and a Member of the Government of each of the Great Powers whose Armies are fighting on that front. The extension of the scope of the Council to other fronts is reserved for discussion with the other Great Powers.

2. The Supreme War Council has for its mission to watch over the general conduct of the War. It prepares recommendations for the decision of the Governments, and keeps itself informed of their execution, and reports thereon to the respective Governments.

3. The General Staffs and Military Commands of the Armies of each Power charged with the conduct of military operations remain responsible to their respective Governments.

4. The general War plans drawn up by the competent military authorities are submitted to the Supreme War Council, which, under the high authority of the Governments, ensures their concordance, and submits, if need be, any necessary changes.

5. Each Power delegates to the Supreme War Council one permanent Military Representative, whose exclusive function is to act as technical adviser to the Council.

6. The Military Representatives receive from the Government and the competent military authorities of their country all the proposals, information and documents relating to the conduct of the War.

7. The Military Representatives watch day by day the situation of the Forces, and the means of all kinds of which the Allied Armies and the Enemy Armies dispose.

8. The Supreme War Council meets normally at Versailles, where the permanent Military Representatives and their Staffs are established. They may meet at other places as may be agreed upon, according to the circumstances. The meetings of the Supreme War Council will take place at least once a month.
From the foregoing it will be clear that the Council will have no executive power, and that the final decisions in matters of strategy and as to the distribution anti movements of the various Armies in the field will rest with the several Governments of the Allies. There will be, therefore, no Operations Department attached to the Council. The permanent Military Representatives will derive from the existing Intelligence Departments of the Allies all the information necessary in order to enable them to submit advice to the Supreme Allied Council. The object of the Allies has been to set up a central body charged with the duty of continuously surveying the field of operations as a whole and, by the light of information derived from all fronts and from all Governments and Staffs, of co-ordinating the plans prepared by the different General Staffs, and, if necessary, of making proposals of their own for the better conduct of the War. Should the House desire an opportunity of discussing this important subject and my Paris speech, the Government would propose set aside Monday next for the purpose.

January 22, 2016
David Lloyd George – 1917 Speech on Russia

Below is the text of the speech made by David Lloyd George, the then Prime Minister, in the House of Commons on 19 March 1917.

The incidents in connection with what I believe will prove to be one of the landmarks in the history of the world have followed each other with such dramatic suddenness that it has not hitherto been possible, and it is not possible to-day, to give to the House of Commons a detailed account of what has actually occurred.
There has for some time been deep discontent in Russia, of which there have been several manifestations, due to the inefficiency of the Government in the conduct of the War. On Friday, the 9th, some riots, due to the scarcity of food, occurred in the streets of Petrograd. This was, however, the occasion rather than the cause of the Revolution which immediately followed.

The soldiers who were commanded to take action against the rioters refused to obey orders, and gave their support to a committee, of which the President of the Duma was the head, which had been suddenly formed for the purpose of preserving order, and the control of the Government passed largely into the hands of this committee. Subsequently a strong Provisional Government was formed, of which Prince Lwoff is the head, and the Proclamation of this Government, as well as that of the Czar announcing his abdication for himself and his son, and that of the Grand Duke Michael, have appeared in the Press, and also the refusal of the latter, while placing his services at the disposal of the new Government, to accept the Throne unless called to it by the voice of the people, expressed in a constituent assembly. So far as our information goes, the Revolution has been brought about with very little bloodshed, and the new Government is receiving the support both of the country as a whole and of the Army and Navy. Our information, however, does not enable us to say that all danger is over, but it is satisfactory to know that the new Government has been formed for the express purpose of carrying on the War with increased vigour.

I have only to add, on behalf of the Government, that they believe that the Russian people will find that liberty is compatible with order, even in revolutionary times, and that free peoples are the best defenders of their own honour and safety.

January 22, 2016
Gregory Barker – 2012 Speech at RHPP Communities Scheme Launch

Below is the text of the speech made by Gregory Barker, the then Minister of State for Climate Change, on 24 July 2012.

Good morning and thank you for coming today, I have great pleasure in announcing the third and final element of this year’s Renewable Heat Premium Payment – the Communities Scheme. Before launching into the detail of this new scheme, lets discuss why I believe renewable heat is so important and why we need to take action now.

The UK Building Stock and Targets

Under the EU Renewable Energy Directive, the UK has a legally-binding commitment to generate 15% of its energy from renewable sources by 2020. An incredible 47% of the UK’s carbon dioxide emissions are attributable to heat generation.

Looking ahead, the DECC Carbon Plan sets out the Coalition Government’s aim to reduce emissions from heat in buildings from 124 Megatons to zero by 2050. To achieve these extraordinary targets, heating used in buildings will need to come from renewable technologies such as air-source or ground-source heat pumps. The RHPP is really the first step on the road to achieve this.

I don’t under estimate the challenge and this is an important first step. Throughout this decade, Government is really focussing its attention on working with industry to prepare the market. We are committed to renewable heating, driving innovation and supporting the UK industry to build supply chains – with the goal to bring down costs ahead of large scale roll-out. Creating British jobs, British firms and British expertise.

Phase 1: RHPP Success

So what has happened so far.

Under Phase 1 of the RHPP, which ran from August last year to the end of March this year over 6000 homes received help. These houses were previously on costly, high carbon fuels for heating and have now had their systems replaced with low or zero carbon renewable heating.

Phase 2: Building on success

Now let’s move to Phase 2, which is building on the successes of Phase 1. Under the RHPP, we are continuing to provide one-off grants to householders across Great Britain to help with the cost of installing renewable heating technologies. Since we reopened in March, we have issued a further 1,187 household vouchers – all helping to install renewable heating technologies in people’s homes.

Social landlords competition

In May this year, I launched the second social landlords competition. We received 72 applications and I can announce that all were successful in this competition at a value of just over £5million. A full list of winners will be published on the DECC website today.

The value of the applications received was just over £5 million -this is approximately half the £10million we have set aside for social landlords. We would have, of course, liked to have seen more applications, but I am still very encouraged that these applications are seeking to install a significantly higher number of heating systems – three times more than seen in the first competition for the same financial contribution from DECC.

We are now considering our next steps – Should we have another competition or not? If we do decide to do so, we will announce something very soon. I am very interested to hear views from the room today through the Q&A.

I am already convinced that low carbon heating systems have a role to play in social housing. Social landlords do not have to take my word for it, they can see for themselves. Tenants have told us that their new heating systems are saving them money and are easier to run.

Communities Scheme

Now let me turn to the Communities Scheme – the reason we are here today. The Coalition pledged to “support community ownership of renewable energy schemes” and we have said on many occasions that local people are best placed to decide what is best for their communities. Schemes such as LEAF have enabled communities to act on this and be at the forefront, playing their part in effectively delivering these priorities at a local level.

Communities have much to gain aside from the evident carbon benefits and energy bills savings. It has been shown that communities working together on low carbon energy projects enhance trust between local people and local organisations. This is a strong foundation to build future local capacity and further collective action.

I would like to take this opportunity to thank the Community Board for their help in developing this new Scheme. I am also extremely pleased to see so many of you have joined us here today and are interested to know more about this new initiative.

This new RHPP Scheme draws on the successes of the Local Energy Assessment Fund (LEAF), which closed in March 2012 and which some of you, I’m sure will already be familiar.

LEAF supported communities across England and Wales to play an active role in the development of a low carbon society where the energy supply is both secure and affordable.

There was widespread interest from around 600 communities, and 236 of them received funding from the £10million pot. The funds supported work by community groups and there were many inspirational examples of communities getting together, assessing local energy efficiency and renewable energy needs and produce local solutions tailored to their unique needs. We will be running an in-depth evaluation of learning from LEAF over the coming months.

Can I take this moment to give you a bit of detail about the Scheme. The objective is to facilitate the installation of renewable heat systems into privately-owned homes in England, Scotland and Wales.

It will work by supporting those who are currently unlikely to be able to benefit from the RHPP household voucher scheme, through additional Government funding and by encouraging community groups to negotiate bulk buying discounts. We would particularly like to focus on properties and communities which are off-gas, where bills and emissions are higher.

After this event and until the beginning of September, community groups will be able to register their interest with the Energy Saving Trust. Those projects that pass an initial assessment will progress to the development phase. Here, communities will be supported to develop their ideas into project proposal bids. These bids will be independently assessed and winners announced later in the year.

Innovation: Heat Strategy, the Green Deal & RHI

The RHPP Scheme is a piece in a wider jigsaw and we are working hard to deliver other key initiatives such as the Green Deal and the Renewable Heat Incentive. In recognition of this I was pleased to announce last month that we will be launching a Community Energy Strategy Document to bring together DECC’s strands of work on communities, which will be published in 2013.

The Green Deal launches this autumn helps people pay for home improvements like insulation through savings on their energy bills. It will help people to make energy-saving improvements to their homes to keep them warm and cosy. At the same time, it’ll reduce the amount of gas and electricity householders need and keep their heating bills down. ECO, a subsidy from energy suppliers, will provide extra help for those most in need and for properties that are harder to treat.

We know more and more families are being hit by the rising cost of gas and electricity. But our inefficient homes are using a lot more of it than they need to – more than half of our homes don’t have sufficient insulation.

The Green Deal is designed to address these problems, but in a truly revolutionary way. It places consumers at the centre of energy efficiency policy. It isn’t about stop start Government driven and owned programme of works. It is about consumers driving demand, and a competitive market responding.

And as the market grows and develops, homeowners, landlords and tenants will get access to a whole range of home improvements to increase the energy efficiency of homes.

The energy efficiency measures in the Green Deal also help to boost the effectiveness of many renewable heat technologies, such as air and ground source heat pumps. Having an energy efficient home is also a prerequisite for installing renewable hear technologies.

The RHI non-domestic scheme already incentivises community groups and social landlords to connect several households together to create local community heat networks and to supply renewable heat to community buildings such as schools and village halls.

We are on track to meet the RHI delivery timetable and we are publishing our longer term proposals for budget management, as well as proposals on biomass sustainability and air quality. I am also pleased to confirm that we are on track to launch the Domestic RHI consultation this September.

Conclusion

In conclusion it is clear to me that communities and a decentralised approach to energy generation is at the heart of any real long-term solution to climate change and the reduction of our carbon emissions. But I would like to go further. I’ve seen the way these local schemes bring neighbourhoods closer together. I’ve seen them build greater community cohesion. I’ve seen them catalyse new local projects that embed sustainability and resource efficiency and drive greater sense of responsibility. Decentralised energy efficiency is a great thing. Not just a means to an end. I hope that communities of all shapes and sizes will get on board and take advantage of all this scheme has to offer.

January 22, 2016
David Cameron – 2012 Speech at LGBT Reception

Below is the text of the speech made by David Cameron, the Prime Minister, at an LGBT reception on 25 July 2012.

I just wanted to say three things to you tonight. First of all, this party is really a celebration of the immense contribution that lesbian, gay, bisexual and transgender people make in every part of our country, in the arts, in media, in sport, in business, in finance – that’s what tonight is about and I want to thank you for the immense contribution that you make to our country.

The second thing I wanted to say – there are a number of anniversaries – it’s the 40th anniversary of the first Pride march in London, the 40th anniversary of the foundation of the Jewish Gay Equality Group and I think it’s worth remembering the journey that politics has been on in terms of gay equality over the last forty years – the decriminalisation of homosexuality, the lowering of the age of consent to 18, the equalisation of the age of consent that the Blair government achieved, the introduction of civil partnerships – backed by my party and I just want to say I am absolutely determined that this Coalition government will follow in that tradition by legislating for gay marriage in this parliament. I make that point not only as someone who believes in equality but as someone who believes passionately in marriage. I think marriage is a great institution – I think it helps people to commit, it helps people to say that they’re going to care and love for another person. It helps people to put aside their selfish interests and think of the union that they’re forming. It’s something I feel passionately about and I think if it’s good enough for straight people like me, it’s good enough for everybody and that’s why we should have gay marriage and we will legislate for it.

And I know there’s going to be some big arguments, there will be arguments obviously within political parties including my own, there will be arguments with many of the public that take a different view, although it is worth noting that opinion polls consistently show that the public support the case for equality and obviously there’ll be arguments within the Churches as well and I can say how great it is to see some Church men and women here tonight supporting this cause.

I run an institution – the Conservative Party – which for many many years got itself on the wrong side of this argument, it locked people out who were naturally Conservative from supporting it and so I think I can make that point to the Church, gently. Of course this is very, very complicated and difficult issue for all the different Churches, but I passionately believe that all institutions need to wake up to the case for equality, and the Church shouldn’t be locking out people who are gay, or are bisexual or are transgender from being full members of that Church, because many people with deeply held Christian views, are also gay. And just as the Conservative Party, as an institution, made a mistake in locking people out so I think the Churches can be in danger of doing the same thing.

The third point I wanted to make is, changing laws is important, legislating is important. But what is equally important – arguably now what is more important – is actually going to be changing culture; whether it’s on the football field, or in the rugby dressing room. Changing the culture whether it’s in the school playground, changing the culture in the workplace, changing the culture everywhere so that people can genuinely feel we live in an equal, fair and tolerant country. And changing the culture is much more difficult than changing the law, changing culture is much more subtle and difficult. But the promise I can make you is that this coalition government is committed to both changing the law and also working to help change the culture and the Conservative party absolutely backs that. This is something I personally feel very passionately about.

January 22, 2016
George Osborne – 2012 Speech at Global Investment Conference

Below is the text of the speech made by George Osborne, the Chancellor of the Exchequer, at the Global Investment Conference on 26 July 2012.

Welcome to this session – and a particularly warm welcome to my distinguished colleagues, Christine Lagarde, Managing Director of the IMF, and Angel Gurria, Secretary General of the OCED.

I thank you both for taking the time to join us on the eve of the London Olympic Games.

The Olympic Games celebrate human endeavour and peaceful competition between the nations of the earth.

This Global Investment Conference celebrates human innovation and industry, and show-cases Britain as a home for investment in a fiercely competitive world economy.

You’ve heard from the Prime Minister and many colleagues of mine in Government already.

I hope the message you are receiving is loud and clear:

Britain is open for business.

Indeed, we assert that there is no major western economy that is more open, more welcoming of foreign investment, less protectionist and more pro-free trade than the United Kingdom.

Across all political parties, in all parts of the country, we welcome overseas companies with open arms.

In the last few months, we’ve encouraged Chinese investment in our capital’s water system, Hong Kong investment in our telecoms and gas network, Indian investment in our car-making and steel, and today, Malaysian investment in a prime property site here in London.

In the very difficult global economic environment – and with our own disappointing GDP numbers – we as a Government have to work even harder to attract more of this investment.

We have a relentless focus on the economy.

And our message, our sales pitch, if you like, to investors has three components:

– We’re dealing with our debts

– We’re creating the most pro-business tax regime in the developed world

– And we’re making the long-term structural reforms to secure a more productive future.

Let me take each briefly in turn.

First, in our continent reeling from a sovereign debt crisis, the UK is a country which demonstrated to the world that is has a credible plan to deal with its debts.

In the last 2 years, we have cut our deficit by 25 per cent.

When this Government entered office, the UK’s cost of borrowing was the same as Spain’s and Italy’s.

Today, their cost of borrowing is more than six per cent and ours is one and a half per cent.

That market confidence and those ultra-low interest rates are precious assets – hard won and easily squandered.

And it is precisely that market confidence and fiscal credibility that allows our independent monetary authority, the Bank of England, to operate a more active monetary policy.

– Expanding the Quantitative Easing programme.

– Launching with the Treasury the new Funding for Lending Scheme operational next week that will reduce bank funding costs to reduce loan rates and mortgage costs.

– And it is the same fiscal credibility that means we can use our balance sheet to offer billions of pounds worth of guarantees to new infrastructure projects and export opportunities.

You will hear those arguing that we should abandon our plan and spend and borrow our way out of debt.

You hear that argument again today.

These are the siren voices luring Britain onto the rock.

We won’t go there.

A credible plan to deal with our debts is an anchor of stability and a prerequisite of recovery.

We have that credible plan – and we’re sticking to it.

That gives confidence to investors looking at the UK.

So too should our pro-business reforms to the tax system.

I challenge anyone in the audience to name another major western economy that is:

– Reducing its corporation tax as aggressively as we are: from 28% to 22%.

– Or cutting its top rate of income tax to attract wealth creators.

– Or introducing new generous tax regimes for patents, and research, and creative industry.

– Or creating a new regime for the headquarters of global firms, so that companies are now moving to Britain instead of moving away.

– This is the most pro-business tax reform in any developed economy today.

And the final sales pitch is this.

We are also tackling the deep-rooted problems that undermine the competitiveness of many western economies, including ours.

In the last 2 years, we’ve undertaken major reforms of planning, higher education, schools and welfare that will equip Britain for the future.

It’s involved tough decisions, raising pension ages, reducing public sector costs, taking on vested groups.

But we’ve done it.

And despite disappointing GDP numbers, we are determined to continue to tackle the deep rooted problems our economy faces.

The deficit is down by a quarter.

Inflation has halved.

Employment is up.

Exports are rising – and Britain’s businesses are now exporting more to the rest of the world than to Europe.

A sign of openness to the opportunities from emerging as well as established economies across the world.

And we know we have more to do.

Our motivation is simple.

It was spelt out by the Prime Minister this morning.

We’re in Government at a time of great change in the world economy.

Great change, and of course, great uncertainty.

And we think that some western countries will adapt well to that change, cope with that uncertainty well.

And others not adapt so well.

We have a relentless focus to ensure that Britain adapts to the changing world and thrives in it.

These Olympic Games are a showcase of Britain at its best.

This Conference is a sign of our nation’s commitment to welcome the world’s investors.

Britain is open for business.

January 22, 2016
David Cameron – 2012 Speech at Global Investment Conference

Below is the text of the speech made by David Cameron, the Prime Minister, on 26 July 2012.

Welcome to London, welcome to the greatest show on earth. Everything is ready, the stadia are ready and everything is looking good. We have even, at least for the business summit, managed to lay on the weather.

Over the next two weeks the world’s greatest athletes will compete right here. Records will be broken, new champions will be crowned, history will be made. But I believe the legacy of these Olympics can be about many more things as well as great sport. For instance, the legacy should also be about great business too. At a time when it is global business partnerships, new investments and, vitally, start-up ventures that will help get the world back to growth, nothing symbolises the opportunity of partnership and collaboration more than the Olympics.

Forging those partnerships and those investments is why we are all here today. So, yes, of course I want medals for Britain, and there will be no more passionate supporter of Team GB than me, but I have got another job to do this summer and a big part of that job is to get behind British business and do everything I can to help secure the trade and investment that will help get the world back to sustained, global growth.

I am absolutely delighted to welcome you to the British Business Embassy. This is the biggest business summit any British government has ever hosted and I think it is also the biggest Olympic business summit in history.

At this Conference alone we have more than 200 business leaders from 36 countries representing quite literally some of the greatest companies on the planet. And that is just the beginning. Over the next fortnight we are going to have 4,000 business leaders attending sector conferences on everything from energy to life sciences, aerospace to education and the creative industries.

They will take part in country-specific days on China and Brazil, the previous and the next hosts of the Olympics and two of the most exciting and fast-growing countries in the world. And also I hope people will get stuck into venture capital events that will help to secure the vital resources needed to commercialise new inventions and, of course, exciting new start-up businesses.

In order to make it in these difficult times, I think there is also a very tough and uncompromising message that all of us – politicians perhaps particularly – have to take on. And it is this: countries all around the world have to face up to some very hard truths and to take some difficult decisions. The global competitive race has never been faster; some countries will make it, some will not. The challenge is particularly great right here in our European neighbourhood.

Since the financial crash the world economy has grown by 20 per cent, but Europe has hardly grown at all. The countries that make it will be those that step up to meet the big long-term challenges. Getting your debts under control; ensuring you have a welfare system that you can afford; making sure you have a great pensions system for older people, but making sure you have liabilities you can manage; building an education system that is going to produce some of the best graduates in the world; making your economy as competitive as it possibly can be; ensuring you are linked up to the fastest growing parts of the world and that your trade is delivering as many jobs as possible.

By meeting these key challenges, I am absolutely determined that Britain will be one of the success stories of the next few decades. I want to take some of these key points in turn.

The first thing you need as investors is confidence in the long-term stability of the economy that you are investing in. You need to know that the public finances are under control and that your businesses aren’t suddenly going to be crippled by uncertainty or by high interest rates.

The coalition government that I lead in Britain inherited the worst deficit this country has had since the Second World War. But we have acted decisively to put in place a credible and steady plan to restore confidence in our public finances.

That meant taking some very tough decisions. Increasing the state pension age, reforming public sector pensions – which has actually cut their long-term cost in half – and taking forward sweeping, long-term reforms of welfare.

We have taken a series of bold decisions to sort out our public finances and to earn credibility in the markets. As a result, in just two years we have cut the deficit we inherited by more than one quarter and our market interest rates are less than 2%.

My message today is clear and unequivocal. Be in no doubt: we will go on and finish the job, we will deal with the deficit, we will keep UK interest rates low and we will continue to take the tough decisions that are necessary for business leaders and investors to have confidence in the long-term future of the British economy.

Getting our debts under control is clearly essential for growth. Fiscal discipline and growth are not alternatives – you need one to get the other – but sound finances alone are not sufficient. If Britain is going to be a success, we need a competitive economy. So we are absolutely focused on doing everything to support enterprise and make Britain the best the best place in the world in which to start or grow a business.

We have listened to what business wants and we are delivering on it. Business said, ‘We want competitive tax rates’, so we are creating the most competitive corporate tax regime in the G20 and the lowest rates of corporation tax in the G7.

Business said, ‘We want a simplified planning system’. Why? So companies can expand and invest more easily and grow and create the jobs that will put people into work. We have taken 1,000 pages of planning documentation and reduced it to just 52.

Business wants tax credits for research and development so they can develop the high end products that future countries like ours need. We have got them.

Business wants a radical patent box so that if you develop a patent in Britain and manufacture here you pay only 10% tax. Again, we have got that too. Companies like GlaxoSmithKline, AstraZeneca and international companies like Qualcomm have already announced new investments as a direct result of this.

We have also listened to entrepreneurs. We are radically reducing the time it takes to start up a business, so instead of filling in endless forms you can now get online, set up a business and register for taxes – and see the taxes that you have paid and that you owe – all in one place.

Last year, despite the tough economic climate, the number of new business start-ups was one of the highest in our history. We have created a 50% tax break for the first £150,000 invested in a start-up and more than doubled the limit on the amount of tax deductable funds that can be invested in a single company in a year.

And in this Olympic year we are making an extraordinary – and, I think, unprecedented – offer. If you sell assets in this tax year and invest the proceeds in one of the businesses in our seed investment scheme, you will not pay a penny of capital gains tax on the assets that you have sold. Not this year, not next year, not any year. That is, I think, an incredibly pro-enterprise policy.

We are supporting the rebalancing of our economy with bold new infrastructure investments. In a world in which too much investment has been high risk and short-term, there should be huge potential for a different approach.

We are pioneering a new investment scheme, the Green Investment Bank, to bring in private sector funds to make the most of the green infrastructure that we will require. This is the first green investment bank in any advanced country, anywhere in the world. It starts with £3 billion of taxpayers’ money to get those projects going.

We are making the biggest investment in our rail network since the Victorian era, retaining our status as a key global hub for air travel and expanding access to broadband, including through super-connected cities where citywide access to ultra fast 80 megabit broadband will give Britain twenty of the fastest and best connected cities anywhere in the world.

And we are also – vital for all the countries that want to ‘make it,’ as I have put it – sorting out our financial system. Our financial system is a huge strength for our country, but we do need proper regulation. So we are going to have it properly regulated by the Bank of England with banks made to hold enough capital to keep them safe and a regime so that if they do fail, they can do so without the taxpayer picking up the bill. That resolution regime is already now in place.

We are putting into law the ring-fencing of retail banking and its separation from investment banking, and introducing the most transparent rules on pay and bonuses of any major financial centre anywhere in the world.

And we are building on the Kay report earlier this week, promoting greater trust and confidence by cultivating a change in corporate culture to focus management teams and investors on longer-term, sustainable value creation rather than merely short-term profit chasing.

So we are making our economy more competitive but we are also taking a totally different approach to trade. I went into the Foreign Office on day one of being Prime Minister and I said to them, ‘You are, of course, the Queen’s diplomats, but you are also the sales force for Britain and for British industry’.

We have set an ambition of doubling our exports to £1 trillion by 2020. That would get us in line with Germany and match their record level of exports last year. I believe it is absolutely achievable.

Britain is already now exporting more goods to rest of the world than we are to the European Union, and if we could increase the number of small and medium sized firms in the UK that sell overseas at all from one fifth to a quarter that would add £30 billion to our economy, create 100,000 jobs and pretty much wipe out our trade deficit altogether.

That is the power of trade to drive growth and it’s the same story the world over. That is why I have made advancing trade a personal priority. At the G20 in Mexico, I fought hard to advance a trade deal between the US and the EU, because when two continents that account for more than half of the world’s total trade liberalise their trade, the benefits to growth could be felt all over the planet.

I discussed EU bilateral trade with the Brazilian president yesterday – she is here for the Games – and will do the same with the Russian president next week when he is here. We will be at the judo, so it may be a bit off-putting, but nonetheless, I know my major priority is to get those trade deals to get that investment and not to concentrate on what’s happening on the mat.

I’ll keep up the pressure on the EU to conclude those new trade agreements with India, Canada and Singapore and to launch trade negotiations with Japan. I’ll continue to champion a free trade area in Africa, which could play such a vital role in lifting Africa further out of poverty. And I will make trade a core priority when Britain hosts the G8 here in the United Kingdom next year.

I know some people think it is sort of grubby to mix money and diplomacy. Frankly, I couldn’t disagree more. This is about jobs. In the last year alone we’ve increased the number of British jobs created by trade and investment by a quarter. That means nearly 150 jobs created or safeguarded every single day. But for Britain to be a success, we need to do even better than that. So I will go on loading up aeroplanes with businesspeople and taking them to the great markets of the world. Already I’ve done that with India, China, Russia, Turkey, South Africa, Nigeria, Mexico, Japan, Singapore, Indonesia and Malaysia, and I’m delighted at the news today about one of the big deals we were pursuing when I was in Malaysia.

Battersea Power Station is one of the iconic landmarks of the London skyline. Any fans of Pink Floyd in the audience will know it from the cover of the Animals album. That ages some of you, I know, but I expect there are a few Pink Floyd fans here. This site sits on 40 acres of land that is ripe for development, right by the River Thames, here in one of the most dynamic cities anywhere in the world. It is quite simply one of the most exciting opportunities for investment in Europe. So, we very much welcome the plans for an £8 billion development that will create 20,000 jobs, with 13,000 permanent jobs at the end, and it will protect those famous towers too.

This all follows from the announcement yesterday of a further £2 billion investment into the UK energy sector by our long-term partner and good friends at Hutchison Whampoa. I hope these are just the first in a long line of deals that I hope we can do, with further billions of pounds of deals expected to be announced this summer, creating and safeguarding jobs across the UK.

I’m passionate about what Britain can offer. We have a time-zone where you can trade with Asia in the morning and America in the afternoon. We have the English language, the language of finance and business, and increasingly – as I find in the European Union – of politics too. I sometimes say the single language is going a little bit better than the single currency, but it’s very important that we safeguard and promote both.

We have the easiest access to the European market where 500 million consumers are generating €12 trillion in economic activity. We have some of the best universities in the world. We have products and services that people need. Here in the room, we have got British companies like WPP, the world’s largest advertising agency; Vodafone, the world’s most international mobile phone company; and ARM, the British company based in Cambridge that provides technology used in 90% of smart phones.

There are British firms – and I have checked this out – exporting tea to China, vodka to Poland and cheese to France. There’s even a firm I found in Anglesey that sells canoes to the Eskimos. This year Britain has become a net exporter of cars for the first time in 35 years. That is the sort of badge that you think once you’ve lost, you will never get back. People in the 1970s and 80s I think wouldn’t have dreamed that 30 years on, with Honda, with Nissan, with Jaguar, we would be back as a net exporter of vehicles to the rest of the world, and we are. Jaguar Land Rover yesterday announced 1,100 new jobs in the West Midlands. Some of these companies are selling so fast into China they can hardly produce the cars fast enough.

But it’s not just our car industry that’s strong. If you want modern medicines, we’ve got world leading pharmaceutical businesses. If you want energy technology, we are the home of some of the world’s leading energy companies: pioneers in exploring green technology, but also oil and gas recovery in some of the most difficult parts of the world.

If you want a holiday here, you can even now think that the sun does occasionally shine, and we’ve got an extraordinarily vibrant tourist industry. And while you’re at it, of course, you fly in to Britain on the wings of an Airbus plane, designed in Bristol, made in North Wales, and powered by Rolls Royce engines, of course made in Derby.

So, this is – I hope you can see – a personal mission for me. I mean it when I say to all those here: if there are barriers in your way preventing you from investing, tell me. If there are things the British government can do to help you invest, let me know. If there’s an opportunity you think we are not sufficiently seizing, get on to me about it. My office, or Stephen Green and all of the team at UKTI will help, and I will gladly speak personally with any of you who have a deal or an opportunity that will mean jobs and growth for Britain.

My message today is very simple: Britain is back open for business and we are committed to supporting global growth with open trade between our nations. So invest in Britain, partner with Britain. Not just to invest in this country, but because I believe this will increasingly be seen as the place, as the hub, from which your company can grow and expand. So let’s make this Olympic year a great year for your business, here in Britain. Thank you.

Question

Mr Prime Minister, you talked about incentives for small business, and so much of the high tech industry is about creating that entrepreneurial environment and blowing away the road blocks, but a lot of it has to do with immigration policy and the duration of engineers and simulating concepts there. Could you say a little bit further on your policy regarding start-ups?

Prime Minister

First of all, a very warm welcome to Cisco Systems and congratulations on your acquisition of NDS, a great technology business here in Britain – really pleased to see that happen. Britain had an immigration system that I think was really not serving the country well. We had an enormous amount of unskilled migrant labour coming to Britain at the same time as having five or six million people living in Britain on out-of-work benefits.

So the government has quite a mission of reforming welfare to get people off those benefits and into work, and proper control of immigration. But we do want to be an open, vibrant economy that welcomes the best and brightest to our shores. I think the offer we make, particularly to students, is pretty hard to match, and it’s very simple, so don’t believe all the myths.

The offer is this: if you have the ability to speak the English language and a place at a British university, there is no limit on the number of people that can come. And having come and studied, there are opportunities to take part in a graduate job after you have left university. So you’ll read about immigration control in Britain – and it’s right we have proper immigration control – but there’s no limit on the number of students that can come and study and then work in the UK.

We have also introduced some very growth-friendly immigration policies like the entrepreneurs visa, which is a special category of people. If they’ve got great entrepreneurial skills, or want to come to Britain and take advantage of some of those tax changes I have said, there is a special category, and it is very important that people understand that. There’ll be experts here from UKTI. If anyone’s got questions about immigration or visas, then please get on to them, because I don’t want that in any way to get in the way of the growth story here in the UK.

Question

I have been an investor here, and recently we have invested in the auto sector in Leeds. One of the suggestions I would make: if the uncertainty of taxation on the global wealth can be clarified, it will help quite a lot to bring in more investments in this country.

Prime Minister

Very good point. This is the – first of all, thank you for all of your investments in the UK over many years. In terms of the taxation of global wealth, there are two points I would make. First of all, obviously as well as cutting our corporation tax rates down to the lowest levels in the G7 – and you have seen a series of cuts, even though we have had to make tough spending choices with the 22% target at the end of this parliament – we are also changing the taxation for headquarters companies and we are seeing a number of headquarters companies now thinking of either coming back to Britain or coming to Britain for the first time.

On the taxation of global wealth, obviously we do have this system in Britain of non-domiciled taxpayers, so people who don’t pay tax on their worldwide income in the UK because they’re domiciled somewhere else for tax purposes. We now charge people for having that tax status, but if they have that tax status they’re not taxed on their worldwide income, and I think that does encourage those people to make their homes, their businesses and their bases here in Britain, and that will continue.

Question

I wonder if you could give a commitment, Prime Minister, that you will be working with the devolved administrations of the UK on issues like economic development? And certainly, as you mentioned, on education in terms of qualifications and indeed the training of young people, including apprenticeships?

Prime Minister

Yes, absolutely. I mean, it’s great that the devolved countries – including the Welsh Assembly government – are here. I’d say to all international investors, you know, look at the whole of the United Kingdom. There are huge investment opportunities in Scotland, in Wales, in Northern Ireland. We have devolution in Britain, but we work together as a team when it comes to promoting investment in Britain, and frankly I think we can probably do more with the Welsh Assembly government and UKTI together to jointly promote what we have.

In terms of the points you make, absolutely happy to work on all of those subjects with you. I think all of the countries of the United Kingdom have got to realise that getting education right is a huge challenge. If I had a challenge to the Welsh government, it would be that we are doing a lot in England to raise standards in schools and make sure we’re really creating a competitive and very much results-focused school system. I think we need to do that in Wales too.

And in our universities, obviously we’ve had to make tough choices. We now have a fees-based system and this was a difficult decision the UK government made for English universities, but the strength of it is that one of the big challenges the whole world’s going to face is: who’s got the best universities? Who’s producing the brightest graduates? And frankly there’s only two places the money can come from: you can get it from taxpayers, or you can get it from graduates. We are now getting it from graduates, and that means the universities know they’re not going to have to wait in the queue behind healthcare and behind pensions and the rest of it. We’ve got well-funded universities guaranteed into the future, and I think that for businesses that’s a very, very positive message.

Perhaps one last question, and then I’ve got to go off to the Olympic Park to welcome the foreign press.

Question

Good morning, Prime Minister. We’re just a little bit curious about the aviation policy of the coalition government in the United Kingdom. I know there are a number of options that have been presented to you, whether it’s the third runway at Heathrow or the expansion of the regional airports, and of course there’s the estuary project. Recently, you decided to postpone that review, or rather the results of the review. As a foreign carrier – and Emirates is quite a big one into Heathrow and other points in the United Kingdom – we’re particularly interested to see just where we’re going on this, or perhaps rather where the government’s going. Thank you.

Prime Minister

Well, be in no doubt, by the end of the year we will have both this review underway and the call for evidence about all the future options underway, and I think that’s vitally important. Both the coalition parties made a pledge not to have a third runway, and that’s a pledge that we made and that we will keep.

But I do understand it’s vitally important that we maintain the sort of hub status that Britain has. There are lots of different options that can be looked at, but frankly I think we’ve discovered something in the last couple of weeks that I think business travellers and investors would welcome even more, which is if you really tool up and put the effort into running a good service at Heathrow you can reduce the border queues right down. And I don’t know what everyone’s experience was here – I won’t chance a show of hands – but my wife said when she came in from a business trip from Italy, she didn’t even have time to put her hand into her bag to get the passport out before it was being checked.

So if you put the effort in, if you make sure there’s a real customer service ethos at our major airports, I think we can improve the welcome that we give people while having very important security checks.

And we mustn’t underestimate that for one moment. You know, one of the most important things about this Olympic Games is, yes, of course, an enormous festival of sport, huge legacy, great opportunities for business deals, as I’ve spoken about, but actually making sure they’re safe and secure is vitally important, and our borders really matter for that.

So I think we can deliver on making Britain have hub status, making it easy to get into and out of to trade with the rest of the world. Heathrow is still one of the busiest airports in the world, some people talk about Heathrow as if somehow it’s now sliding down the ratings. It’s a massively successful, busy and connected airport, but I think we’ve learnt something already this week about a real focus on customer service. We can do it better. Let’s do it better all the time, and not just during the Olympic Games.

Can I thank you all again very much for coming. Thank you. I want to make a particular welcome to so many of the international bodies that are here: Angel Gurria from the OECD, Christine Lagarde from the IMF, Mario Draghi from the European Central Bank. You’re incredibly busy people, there are huge challenges on your time and resources. It’s great to have you taking part, and Mervyn King from the Bank of England as well. So thank you all very much for coming.

I hope this is a great moment to come together, do some great deals, think of some great investments. Britain is there for you and we’ll give you a very enthusiastic welcome. Thank you very much indeed.

January 22, 2016