Tag: Speeches

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

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

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

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

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

The rise of the Treasury

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

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

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

– war as a spur to financial innovation;

– the Treasury’s inextricable links to Parliament;

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

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

First, war.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Gladstonean reforms

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

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

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

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

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

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

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

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

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

And when challenged by his inquisitor that it might be

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

Lowe replied:

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

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

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

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

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

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

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

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

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

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

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

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

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

The Treasury in the 20th century

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

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

Treasury control evolved in two ways.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Treasury control has evolved.

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

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

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

I could not put it any better than that.

December 3, 2015
Sir Nicholas Macpherson – 2011 Demos Speech

The below speech was made by the Permanent Secretary to the Treasury, Sir Nicholas Macpherson, made at Demos on 8th March 2011.

The Treasury has had an extraordinary few years: a banking crisis followed by recession and a ballooning budget deficit.

But, even by those standards, the last year has been a defining one.

We delivered two budgets, in March and June.

We have been through only the second political transition in thirty years.

We delivered a Spending Review.

We have navigated through a sovereign debt crisis in Europe.

And we have embarked upon the biggest reform of financial regulation since 1997.

On top of this, we have made a number of institutional and organisational changes, in particular the creation of the Office for Budget Responsibility.

At the same time, the Treasury is getting smaller. Staffing levels which peaked at 1420 in September 2009 currently stand at 1260 on a like for like basis.

In my view, the Treasury will enter the new financial year with greater credibility as the nation’s finance and economics ministry.

This is partly because of what the department has achieved: in particular, the sheer scale of the fiscal consolidation. But also its associated outcomes: long gilt yields have fallen by 30 basis points over the last year, while they have increased by 130 basis points in Spain.

It is also partly about the way in which we have gone about these tasks. The official Treasury forged a strong working relationship with the new Government and quickly learned how to work with the first coalition in 65 years. I would like to think this was down to careful planning on our part. But credit should also go to the open and constructive way in which the new administration approached the civil service. Similarly, the successful delivery of the Spending Review relied not only on classic Treasury skills of analysis and negotiation, but also on an inclusive approach, both within and beyond Whitehall. And we are adopting a similarly open and consultative approach to the reforms to financial regulation: it is critical that any reforms are built to last.

And it is also because organisational changes have strengthened the Treasury’s influence.

The creation of the Office for Budget Responsibility is a good example. Its clear remit and independent status makes its forecasts that much more credible. And it strengthens the Treasury’s hand on fiscal policy since adjusting the forecasts to avoid difficult decisions is no longer an option.

We have also managed to effect this change in a way that minimises the duplication of work between the Treasury and the OBR. This is not only a good thing in terms of saving the taxpayer some money, but it also means we can maintain the macroeconomic analytical capacity that we need to be effective. For example, these changes have allowed our Chief Economic Advisor, Dave Ramsden, to spend much more time on analysis and policy advice, building up economic capacity across Whitehall, because it is now Robert Chote and colleagues that spend their time worrying about the forecast.

Other institutional changes have further strengthened policy making and the Treasury. The creation of the Office of Tax Simplification has created a force against unnecessary complexity; the absorbing of the Office of Government Commerce in the Efficiency and Reform Group by the Cabinet Office has enabled the Treasury to concentrate on its core objective of public spending planning and control; and the abolition of the National Economic Council has addressed the risk of the Cabinet Office becoming an economics ministry, which would have led to duplication and potentially confusion of policy responsibility.

The Treasury’s strength derives from its institutional and strategic coherence and the breadth of its oversight. As Britain’s economics and finance ministry, it is perhaps the only national institution that has a genuine interest in both public and private finances and in the economic success of households, businesses and public services.

The Treasury’s finance ministry role is clearly central. Only the Treasury can plan, control and account for public spending, and set the strategic direction of tax policy. And it has been doing it for eight hundred years.

But the Treasury also has an important economic policy role, on financial services, in the international arena, in steering macroeconomic policy, and in improving the supply side.

The Treasury’s effectiveness also derives from its small size. This requires the Treasury to be agile and to focus relentlessly on its core functions.

The Treasury is set to become smaller still. I expect staffing levels to be around 1000 in 2014, the smallest in my time at the Treasury (once machinery of government changes are taken into account).

We have recently carried out a Strategic Review of the Treasury – the first fundamental examination of the department’s role in two decades. It concluded that the department’s finance ministry role is vital, and none more so than in the coming period when making the consolidation stick must be the department’s number one priority. However, the economics ministry role remains as relevant as ever. But in carrying it out, the Treasury works best when it is operating at a strategic level: creating the framework or legislation, and leaving it to others to put it into operation. And so the challenge is to define clearly the boundary between the Treasury and its partners which maximises alignment and minimises duplication.

One example of this is public service reform. The Treasury needs to focus on the big strategic risks, rather than spread itself too thinly, interfering in what should be the responsibility of departments.

Another example is financial regulation. With the enactment of the forthcoming legislation, it will be the Bank of England which is responsible for macro-prudential policy, as well as prudential regulation and for the resolution of banks in a crisis. But we will still have responsibility for the framework as a whole and will need to retain a capacity to be an intelligent interlocutor and to take charge in a crisis when taxpayers’ money is put on the line. This is not new; the monetary policy framework follows a similar model, but the Strategic Review pushes us to be more rigorous in applying this approach across the Treasury’s other areas of business.

And it is right that responsibility for the financial services framework remains in the Treasury, as it has since the 1990s.

The banking crisis underlined the linkages between financial and economic policy. That is informing the Government’s reforms to the Bank of England; and it has also reinforced the importance of the Treasury’s historic relationship with the Bank. Moreover, most new regulation emanates from Brussels, it is finance ministers who take the important decisions on financial service issues whether in the EU Council of Economic and Finance Ministers, or in the G20 at a global level. And the Government’s interventions in the banking sector in recent years have involved fiscal as much as economic policy judgements.

Another good example of our focus on creating clear partnerships is tax. The Treasury is best placed to ensure tax policy decisions are taken in the context of wider financial and economic policy: and its proximity to Ministers means that it is well placed to take into account the fundamentally political nature of tax raising. But Her Majesty’s Revenue and Customs have a critical role in ensuring that tax policy is informed by operational and implementation issues. They are inevitably closer to the detail and data. The relationship works best when the comparative advantages of each institution are exploited, and where the two institutions can challenge each other from a position of mutual respect. The relationship is not a contract: it is more like a marriage than an arms treaty.

But the Treasury’s effectiveness is not just about the way we are organised, or about how we work with our main partners. It is also about the people we have working here.

The events of recent years have demonstrated the need for a flexible workforce that can move quickly and effectively into new priority areas, with a set of skills that allows them quickly to deliver.

This is not to say that our staff should be moved around so frequently that they cannot develop expertise in critical areas. And in the past the Treasury may have celebrated youth a little too much over experience.

Recent events have also placed a high premium on expertise. Here, I think we have made real progress. We now have a critical mass of tax professionals. Our economist cadre is strong. And we have strengthened financial management expertise, as well as attracting people with operational experience of delivering public services. We are managing staff’s careers more proactively. And our best staff are increasingly going out of the Treasury on secondment to deepen their experience, whether working in a local authority or a front line department or the Bank of England. In my view, we now have a much more plural workforce which is better placed to deliver the right mixture of challenge and experience, as well as mitigating the risks of mono-cultural group think.

The areas where expertise has made the most difference are those most directly affected by the recent crisis: debt management and financial stability. Of course, we need to learn the lessons of the causes of the crisis. And that is informing the Treasury’s painstaking approach to legislation. But the professionalism with which the Treasury handled the crisis from the autumn of 2008 onwards has been recognised by external commentators. Only last week, Lord Myners said

“the analysis, advice and support I received from…[Treasury] officials… was as good as any I experienced in 30 years in the private sector and at least as good as that received from commercial parties advising the Treasury”

We have so far been successful in retaining expertise and that allowed us to deal more effectively with the sovereign debt crisis in Europe and the subsequent loan to Ireland. And the challenge will be to retain the right staff as our headcount declines.

It’s been a challenging few years for the Treasury, as it has been for the global economy. But I believe the Treasury has come through stronger as the nation’s economics and finance ministry and is well placed to deal with whatever lies ahead.

December 3, 2015
Iain MacLeod – 1950 Maiden Speech

Below is the text of the maiden speech made by Iain MacLeod in the House of Commons on March 14th 1950. MacLeod later became Chancellor of the Exchequer in June 1970 although died a month after whilst still in office.

I think the only thing that draws new Members of this House to their feet to take part in these Debates is the sure knowledge that they can rely, as I rely tonight, on the traditional courtesy and kindliness of Members of this House.

We are today considering an Amendment which has been put down arising out of Supplementary Estimates amounting to about £148 million. Of that vast sum something like two-thirds, or nearly £100 million, is attributable to the National Health Service. All hon. Members are very familiar with the growth of the cost of this scheme from its first presentation to this House in 1946, when the House discussed it on the basis of a scheme costing £152 million a year, or about £3 per head, until the proposed Estimate for next year, which is about £400 million, or some £8 per head.

The first point I should like to make is that, formidable though these figures are, they are net figures and they do not show the full cost of the Health Service scheme, partly because of the transfer payments from National Insurance and partly because of various recoveries, and also because of the superannuation scheme, which shows inevitably in its first few years a surplus which will have to be repaid later, but which at the moment disguises the true cost of the scheme. It is true to say that when an announcement is made, such as the Chancellor made this afternoon, that there is to be a ceiling put on this scheme, we must remember that, in the absence of drastic action, the cost of this scheme will inevitably increase, for, apart from the reasons I have given, we are an ageing population, and for the next generation, in the absence of dramatic scientific or medical discoveries, the demands of sickness will inevitably increase.

It follows that the Chancellor of the Exchequer and the Minister of Health have got themselves at the moment into the position of Alice and the Red Queen. The House will remember that the inhabitants of Looking-glass Country had to do all the running they could do to stay in the same place, and if they wanted to get somewhere else they had to run twice as fast. If our resources — and this has come from both sides of the House — are inadequate — and they are and they will be for a long time to come — then it follows that we must establish priorities as between the social services and also within the social services. On this theme of priority I am quite certain there is general agreement on both sides of the House. The Minister of Health last year at the Socialist Party conference said that priorities were the religion of Socialism, and last night, speaking in this Chamber in the housing Debate, he returned to the theme of priorities, about which we have heard both from the hon. Member for Stoke-on-Trent, Central (Dr. Stross) and from my hon. Friend the Member for Luton (Dr. Hill). We should look for a moment on this scheme to see if, in fact, the correct priorities are being observed.

I should first like to refer to a matter that has been touched on already, and that is the bill for the general dental services, which at the moment is exceeding the bill for the general medical services. If we include Scotland, that means that some 10,750 dentists are being paid more in terms of gross income than some 21,000 doctors. Even if one makes all the adjustments in favour of the heavier cost of practice expenses that dentists have to bear to the full 52 per cent., which is I believe the amount allowed, the dentist at the moment is paid by the State far more in terms also of net income than is the doctor. I have no hesitation in saying that that is an indefensible position.

I am myself both the son and the grandson of a doctor. I believe that relative to their training, their qualifications, their ability, the load of responsibility that they ceaselessly shoulder, and above all the hours during which doctors are at their patients’ service — in my father’s house as in every other general practitioners that was 24 hours of the day and seven days of the week — doctors are by far the worst remunerated profession in the service. I have not the slightest doubt that there is no question, and there never will be of a doctors’ strike, for it is unthinkable for doctors to have anything remotely resembling a strike, but I think we should be wise not to presume too far on the infinite and most statesmanlike patience which the medical profession has shown in these last two years.

The second point I wish to make has also been touched upon. In Section 22 of the parent Act and in the White Paper which preceded it, and in the speeches of the Minister of Health on Second Reading and in Committee, stress was laid over and over again on the need for priority dental treatment for certain classes. Quite obviously that is a sound principle, for if the teeth of expectant mothers and those of infants and young children be sound, then in a generation we will have dentally a sound nation. Hon. Members know that, in fact, these priority classes — I am not arguing about the responsibility; I am stating a fact — are being neglected today, and there are many areas in this country in which the school dental service has virtually broken down. Wherever the responsibility may lie—and I know it causes the Minister of Health, the Minister of Education and the Secretary of State for Scotland great concern — the fact is inescapable that almost the only thing that was made deliberately by the Government a priority in the Health Service has failed.

The third point and the last on priorities which I should like to make is — there is a small Supplementary Estimate put down under research, presumably referring to the Minister’s powers under Section 16.

Dr. Morgan (Warrington) : Too small.

Mr. MacLeod : Too small perhaps, but I remember reading last year that the Minister of Health stated that he was awaiting information from the Peckham Health Centre to enable him to determine whether he could make a grant under his powers under Section 16. I do not know whether that has been done or not, but I know that on the same day that I read about these Supplementary Health Estimates for nearly £100 million I also read that the Peckham Health Centre was closed because it could not collect £20,000, which is one five-thousandth part of the amount to be passed in this House tonight. I suggest there is something sick at heart in the service, something desperately wrong with the priorities in a service in which that sort of thing can happen.

If it has been agreed that these figures are formidable, all thinking people, whether they are inside or outside the House, and everyone concerned with the future of this service are also agreed that the priorities are clearly in many cases unsound. Is it possible for us to suggest what has gone wrong? Very diffidently in a sentence or two before I sit down I should like to give my view on what has happened. The traditional function of the social services, as I understand them, is to rescue the needy from destitution, the sick from ill-health, and the unfortunate from the consequences of their misfortunes. It is a principle that was expressed very clearly by my right hon. Friend the Leader of the Opposition at our Brighton conference two years ago when he said this: The scheme of society for which we stand is the establishment and maintenance of a basic minimum standard of life and labour below which a man or woman of good will, however old and weak, will not be allowed to fall. I should like to take with that something said by my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) in this House on 26th October, which was very badly misrepresented in the course of the recent election. This is what he said: Has not the time arrived when we must, as a nation, recognise that the principle of the social services ought to be that the strong should help the weak, and not to try to aid everybody alike indiscriminately? That is the whole basis on which I want the examination of this problem.” — [OFFICIAL REPORT, 26th October. 1949; Vol. 468, c. 1366.] I agree that that is the basis on which we should examine this problem of the minimum standard, and, secondly, of the duty of the strong to help the weak.

Today — and this is what I think has gone wrong—the conception of a minimum standard which held the field of political thought for so long, and in my view should hold it still, is disappearing in favour of an average standard. To an average standard, the old-fashioned virtues of thrift, industry and ability become irrelevant. The social services today have become a weapon of financial and not of social policy. This may sound Irish, but it is both true and tragic that, in a scheme where everyone has priority, it follows that no one has priority. This principle goes deep in the difference between the two sides of the House.

Perhaps I may sum up my argument in one sentence. I would put it like this: I believe that the conception of the minimum standard and the duty, which ought to be a proud duty, of the strong to help the weak, not only forms a nobler and juster basis for our social services but is a basis that is infinitely better matched to the independence and the character of our countrymen.

December 3, 2015
Kenny MacAskill – 2011 Speech to SNP Party Conference

Below is the text of the speech made by Kenny MacAskill, the Cabinet Secretary for Justice in the Scottish Parliament, to the SNP conference in October 2011.

Ladies and gentlemen, fellow delegates.

What a difference a year makes. Well, in some respects. You may remember last year, whilst expressing how privileged I was to serve as Justice Secretary I lamented that whilst Cabinet colleagues went to India and South East Asia I went to Belfast – and was very pleased to do so.

So much so that while my colleagues have been or are going back to China, India and America, I went back to Belfast once again.

This time highlights included visiting the Police Board Headquarters, followed by a visit to the Police Service of Northern Ireland HQ and a visit to PSNI station in loyalist East Belfast.

I know what you are thinking – why should I have all the fun? True. That’s why Roseanna is getting to go too!

There are considerable upsides to my privileged position. When I came back last week from visiting my son abroad, before I had even got through passport control I had been identified and acknowledged by the visible police presence. It wasn’t just the rest of the passengers, but me that began to wonder what I had done!

Delegates, last year I stood before you and stated the record upon which we sought re-election – 1,000 additional police officers into our communities and they in turn delivered a 33-year low in recorded crime. But it wasn’t just the outcome of the election that got better. Because ladies and gentlemen this year we have 1,100 additional officers and a 35-year low in recorded crime. We were returned as a majority Government because we are making Scotland stronger and safer. We are moving Scotland forward.

But it’s not just on recorded crime that we are moving forward. Violent crime is down by just under a fifth since we came to office and the possession of knives and other offensive weapons is down by almost 40% since we took office. But for those who transgress, there is no hiding place, because sentences are up for the fifth consecutive year.

We are not just making Scotland safer, but making Scottish communities feel safer. People are more positive about the crime rate in their local area than at any time in the last ten years and the risk of becoming a victim of crime continues to fall and is lower than south of the border. It’s a record upon which we were re-elected and it’s a record that we can be proud of.

But we are not complacent. We do know that there’s still far too many tragedies caused by knives in our country. We are taking action on the booze and blade culture that causes so much mayhem and too much misery in too many parts. The No Knives Better Lives scheme is making progress. In Inverclyde knife crime down by 35%. In Renfrewshire down by 29%.

We have extended it into Edinburgh, Glasgow and Clackmannan and, later this month, I will be announcing it’s extension still further. There’s a long way to go, but we are moving forward.

However, we recognise as a Government that it’s not just about dealing with the consequences of crime, but stopping crime occurring. That’s why since we came to office, over £44 million has been spent on the Cashback for Communities Scheme – providing opportunities for over 600,000 young people. Football, basketball, rugby, have all benefitted as well as arts, drama and other outlets for young folk’s energy. Earlier this week, I announced £360,000 to be invested into boxing in Scotland. It’s not my sport – I’m a football man – but I tell you this – because the police tell me it – it works for the some of the hard to handle kids as well as many others. Some may go on to be a Ken Buchanan or a Jim Watt, but for many others it simply keeps them out of trouble, on the straight and narrow, and fit and healthy.

But we do face challenges. None perhaps more so than the severe financial challenges wrecked upon us by Westminster. The cuts are deep and severe. Notwithstanding that, John Swinney has done a fantastic job in ensuring that we protect as much as possible the police budget. But, ladies and gentlemen, I can’t ask officers to do more with the same or even less. It is for that reason that there requires to be police and fire reform.

We will ensure the maintenance of the outstanding police service to Scotland’s communities through a single police service. The status quo is not an option. The alternative is what’s happening south of the border. According to their Inspector of Constabulary, up to 30,000 officers could be lost and in Greater Manchester alone between 2,000 and 4,000 are to go. We will not countenance. Nor will we countenance tearing up the terms and conditions of the police officers who do such a fantastic job for us, as is happening down south as a result of the Winsor review – not now, not ever.

Let me challenge some of the hypocrisy from those who opposed a single service. The Liberal Democrats criticised reform that was taken to protect the outstanding forensic science service we have in Scotland. We have consolidated, but protected it. Ensuring not just that there will be state of the art premises in Dundee and Gartcosh, but a continuing service in Edinburgh and Aberdeen. But what have the Liberal Democrats been doing in the coalition south of the border? They are privatising the service lock, stock and laboratory. Their claims on the police service were equally hypocritical and they got the election result that they deserved.

There have been some legitimate concerns raised but they are being addressed. We will ensure that there’s neither centralisation, lack of accountability or interference in governance. It has been suggested that a single service will see a reduction in officer numbers in our communities. Let’s look at the historic facts. In 1975, when we last saw police reform here in the north there was once 3 police services. After reform, there was just one. There were 2 Chief Constables less, but equally 300 additional officers more. As the First Minister said, bobbies before boundaries.

Our police force and prosecution service will continue to serve us both at home and abroad. The events in Libya in the last 24 hours may have brought one issue to a conclusion. But, as we have always made clear, the Lockerbie investigation remains a live inquiry. Our police and prosecutors – as they have done diligently for the 23 years since the atrocity – will take whatever action is necessary and follow any lines of inquiry in the interests of justice.

That will be one of the major pieces of legislation and it will lay the groundwork for a safer and stronger Scotland. But there’s much more work to do. As the First Minister has correctly said, not just Scotland’s national game, but parts of Scotland are tarnished by sectarianism.

My colleague Roseanna Cunningham is taking through what is a short, but very important Bill through parliament. And I can assure you ladies and gentlemen that neither Roseanna, the First Minister, nor myself will shirk from taking the necessary action.

When I was in Belfast at the Strandtown PSNI station, I saw footage from the riots that occurred in the summer in East Belfast, violent and hate-filled.

Back in Glasgow, a few weeks back, the First Minister and I attended the national police memorial day. We met Nuala Kerr, the mother of PC Ronan Kerr murdered by a terrorist bomb. A young man 4 months into his police service killed for being a Catholic in the PSNI.

When people say it’s just a bit of banter, it’s just a song that doesn’t hurt anyone.

These are songs of hate and there is no place for them in a modern Scotland.

When people say it’s just a political chant – tell that to Ronan Kerr’s mother.

It is for that reason that Roseanna will lead this Bill through Parliament. It’s not about the Boyne in 1690 or Dublin in Easter 1916 it’s about dragging a small minority of folk in our country into the 21st century.

There are other challenges we face. We need to protect the integrity of the High Court in Scotland. It is for that reason we welcome the report from Lord McCluskey and other eminent lawyers. Scotland has long cherished it’s distinctive criminal justice system and we will protect it.

Equally, until such time as there is further constitutional change, we have always recognised that civil matters are different. It’s for that reason that I am delighted that the UK Supreme Court vindicated the actions of our SNP Government and validated the Court of Appeal in Scotland by upholding justice for the victims of pleural plaques.

We have to embark upon legal reform, whether driven by Europe or by financial challenges. For that reason we will take action to make whatever changes are necessary once Lord Carloway returns with his report on criminal procedure. We will take action to protect the integrity of our legal aid system in a time of austerity. We will ensure protection for those who need it most. However, the days of the victim of domestic violence having to contribute to the cost of getting protective orders whilst the perpetrator got criminal legal aid with no contribution have to change. It can’t be afforded, but it’s also not right. Those who can afford to contribute to criminal legal aid must do so.

However, when we talk about Courts and procedures, lawyers and judges, we must never forget the victims of crime. For too long it seemed it was so. Thankfully the former Lord Advocate, now Dame Elish Angiolini, made considerable strides to address that. That good work is being continued by her successor as Lord Advocate Frank Mulholland, and Roseanna and I will deliver it in Parliament through a Victims Rights Bill.

So, ladies and gentlemen – a record upon which we sought re-election, a record that saw us re-elected, and a record that we can be proud of. It hasn’t been simple to date, and the journey ahead won’t be easy. There will be turbulence and there will be challenges. But we are making a Scotland a safer and stronger place. We can be proud of our record as a minority Government. Proud of the actions we are now taking as a majority Government. We are moving Scotland forward.

December 3, 2015
Peter Mandelson – 2009 Speech to Labour Party Conference

Below is the text of the speech made by Peter Mandelson, the then Secretary of State for Business, Innovation and Skills, to the 2009 Labour Party Conference.

Conference, let me say after these years away – it’s good to be back home.

When the Prime Minister asked me to return to the Cabinet last October I felt a lot of things.

Shock. I think I was as shocked as most of you were.

Surprise. My network of informants had let me down on this one.

Apprehension. Returning to the goldfish bowl of British politics – and all my fans in the media. It made me pause.

I had been in this movie before – and its sequel – and neither time did I like the ending.

But I did not hesitate for too long.

The pull was too great.

The pull of coming back to serve my country when it was in the midst of the global whirlwind that had hit us.

The pull of coming back to serve this Prime Minister, our leader, Gordon Brown – who was gripping this financial crisis, leading the fightback against it when so many others seemed caught in the headlights.

But there was something else. It was the pull of coming back to serve our party.

I did not choose this party. I was born into it.

It is in my blood and in my bones.

I love working for this party and those who work so hard for it – even if, at times, perhaps not everyone in it has loved me.

I understand that. I made enemies, sometimes needlessly. I was sometimes too careless with the feelings and views of others.

But please accept this. It was for one reason only. I was in a hurry to return this party to where it should be – in government to help the hard-working people of our country.

I know that Tony said our project would only be complete when the Labour Party learned to love Peter Mandelson.

I think perhaps he set the bar a little too high.

Though I am trying my best.

But the fact is our project is far from complete.

A Labour Government has never been more needed.

Needed to fight back against the recession.

Needed to build and secure our future economic strength.

And needed to ensure we pay down debt in a way that is fair and protects jobs, homes and our frontline public services.

And yet, we must face facts.

Electorally, we are in the fight of our lives.

And, yes, we start that fight as underdogs.

But conference let me say this.

If I can come back…, we can come back.

I came into politics to help remake the Labour Party as a party of Government.

My relationship with Gordon was forged when people said we’d never form a government again.

It made us not just modernisers, but fighters… and certainly not quitters.

That spirit still burns as brightly within us now as it did then.

Gordon, I am proud to serve in your Government as you lead the fightback against the global recession.

The policies conceived and executed over the last year have now begun to pull our economy back onto the long road of recovery.

When it mattered, Gordon Brown and Alistair Darling have made, and are making, all the right calls.

Of course, they could have made different choices. They could have taken David Cameron and George Osborne’s advice to let the recession take its course.

Can you imagine if we had?

I hope these two can find the humility to acknowledge that at every point Tory policy would not just have put the recovery at risk but have made this recession deeper, longer and far far worse.

As we get closer to the election, I want to see them and Tory candidates across the country explaining why they wouldn’t provide the money to help small businesses and families in this recession when they needed it most.

No extra money to boost family incomes.

No money for the tax deferment for business and no VAT cut.

No additional money to help those who have tragically lost their jobs.

No funding for the car scrappage scheme.

They got it plain wrong at every step along the way and I say to every Labour member and campaigner across the country.

Do not let them off the hook.

I certainly will not.

Conference, the foundation of all that we want to achieve is a strong economy.

So what does that mean?

It means continuing to limit the recession’s damage to our economy because when private demand plummets governments must step in.

It means, once we are through the recession – and only when this is clearly the case – we will tackle the deficit without eating into the fabric of people’s lives.

And it means investing in future growth.

On all three counts, the Tories are on the wrong side of the argument.

I tell you. Withdrawing our help for the economy now as Mr Osborne demands would choke off recovery before it has even properly begun.

Not for the first time, Boy George is sailing close to the wind.

There are encouraging signs that the economy is picking up. But recovery remains fragile and uncertain, especially in manufacturing and one of its cornerstones, the car industry.

Our car scrappage scheme has been so successful the money is running out. The industry has asked that the scheme be topped up. Conference, we cannot do everything but that does not mean doing nothing. So today I am extending our popular car scrappage scheme with extra money for an additional 100,000 cars and vans.

In support of our car industry too, this government will stand behind Vauxhall workers in Ellesmere Port and Luton where the workforce themselves have been the main driver of change.

And the same goes for Jaguar Land Rover too.

But all of this only makes sense if we continue to invest in our country’s future growth. It is growth that will see off recession. It is growth that is key to paying down debt.

More than ten years ago I spoke to this conference as Trade and Industry Secretary about how we needed to renew the British economy and build it around knowledge, science, innovation and enterprise.

But this isn’t 1998. This is a different world.

China and India are undergoing the greatest revolution in the economic history of the world.

The greatest financial crisis of modern times also requires us to rethink our growth model for Britain.

Of course, we should be proud of our record.

Production is up by a third. More businesses. More research. More people than ever at university. More people learning new skills although still not yet enough technicians being recruited for our new industries at the heart of our growth strategy.

Some people think that Britain is a post-industrial country that doesn’t make anything anymore.

Well, someone needs to tell them that we are still the world’s sixth biggest manufacturer.

And we will remain a modern manufacturing nation as long as I and the Government remain in our jobs.

But we do need to accept that, during this time, we have not got everything right.

The truth is growth was so strong we started to take it for granted. We nurtured finance – not wrongly, but we should have done more to nurture our other strengths as well.

The potential is there in Britain – we know that. In the services sector, the creative sector, the biosciences sector and in hi-tech advanced manufacturing.

But to release this potential we need a clear plan for growth and this is my mission.

First, with Labour in office, there will be no cap on talent in this country. People with university degrees and skills earn more, climb higher and create more value.

The Tories think that more means worse. We don’t agree. Britain gains when every person who is capable can get the chance to go to university, get an apprenticeship or a new skill.

But to make this possible in a tough public spending environment we all need to contribute – government, individuals and employers.

Second. I want to see an innovation nation. Science is one of the jewels in the crown of Labour’s years in office. And we want closer links between businesses and universities so that good ideas don’t stop at the research lab or the library door.

We’re one of the world’s biggest investors in Research & Development. But we still do the R better than the D and that must change.

Third. We’re going to do more to put finance at the service of industry by building up new public channels to deliver private funds to innovative and fast growing companies.

Less financial engineering and a lot more real engineering.

Fourth – no more saying: the market on its own will always sort it out, like some kind of dogma.

Instead, in my department, over the last eight months, we’ve said: “this is viable, and it’s important, but the market alone won’t get it off the ground. And we can help make it happen”.

We’ve committed three quarters of a billion pounds to new manufacturing innovation in Britain.

Investing in low carbon cars and aircraft. New digital platforms. Plastic electronics. Life sciences. Industrial biotechnology. Wind turbine development and wave power.

This isn’t us picking winners as happened too often in the 1970s, when more often the losers were picking us.

This is us giving public support to new technologies without which they may never get off the drawing board.

Finally, we’re committed to making sure that the benefits of investment in growth are felt in every part of this country.

The Tories say abolish the Regional Development Agencies. We say “go for growth, let’s see what you can do.”

This is the industrial activism we need more of in this country and I am determined to provide it.

Where are the Tories on all this? When did you last hear David Cameron or George Osborne last say anything about Britain’s industrial future?

I would ask Ken Clarke but his mobile phone and blackberry always seem to be turned off. Or given that he keeps privately agreeing with me, perhaps David Cameron has cut it off.

The truth is these Tories have nothing to say about an active government economic role because their dogma prevents them.

They just don’t get it.

This failure, I believe, speaks to a wider truth about our opponents.

David Cameron has been pursuing a strategy not of real change, but of concealment.

Yes, they have made changes to their presentation. The image-making department has done its work and done it well. Who am I to criticise?

But the Tories seem not to realise that change has to be more than a slogan. The first rule of any marketing strategy is that it must reflect the product it is selling.

And what is becoming more evident by the day is that, in their case, it doesn’t. The two faces of the Conservative Party are increasingly on show. The one they want to present to the public of a revamped Tory party. And the other that betrays the reality of traditional right-wing Conservatism.

You know, the Tories seek to give the impression that somehow they have learnt the lessons from New Labour and our party’s march back to the centre ground.

Well, the Tories may have skimmed the headline summary of the New Labour manual. But they never bothered to read the book.

If they had they would know what real change involves. They would know what a painful process it is.

We in this hall know what it took to make the change. Show me what has really changed in the Conservative Party.

The truth is that the old Tory right that was rejected in 1997 are quietly feeling at home again with David Cameron.

At home with his tax plans.

At home with the barely disguised glee a new generation of Conservatives is showing at the prospect of deep and savage cuts to public services.

And at home with a position on Europe that sees them aligned with extremists and sidelined in Britain’s biggest market.

That is not change. Its the same old Tory policies.

So lets take on the arguments about change.

This will be a “change” election. Either we offer it, or the British public will turn to others who say that they do.

Of course, we must celebrate our record and be proud of defending it. We did fix the roof while the sun was shining.

We can look at the way we have turned around our public services, our record on tackling poverty at home and abroad, our role as a force for progressive social change. The minimum wage and the new rights for working mothers and fathers. And we can feel proud.

But let us remember that you win elections on the future, not the past.

Do not make the mistake of sitting back and expecting people to be grateful.

We must not translate the pride we feel in what we have achieved into a defence of the status quo.

Just as we fight against a Conservative Party that is still steeped in the old Tory attitudes of the 1980s, we must not allow ourselves to fall into old Labour thinking.

The British people have their eyes on the future and so must we.

We are the true progressives.

We must be restless for change, impatient to do more for the hard-working people we serve, unafraid to embrace new reform, new policies and new thinking where it is needed.

We need to think like insurgents, not incumbents.

To challenge. To argue for change. To campaign.

To be the real change-makers in British politics.

This is our task.

We need to fight back. Of course we do.

But to do so successfully it is up to us to explain – with confidence, clarity and conviction – what the choice is.

The choice between a Conservative party whose judgements on the credit crunch were wrong, or a party providing leadership in the toughest of times.

A choice between a party that lurches to the right the second it sees a chance of doing so, or our party that is resolutely in the progressive centre.

A choice between a party that does not understand the new world we live in or even what has happened in the last year, or a Labour Party that knows the world has changed and we have to change with it.

Experience and change with Gordon’s leadership.

Or the shallowness of David Cameron.

In one way or another I have been part of the last five election campaigns this Party has fought.

Let me tell you a secret. Deep down in my guts I always knew who was going to win. Even, sadly, in 1992.

This time, it is not cut and dried.

This election is up for grabs.

So conference, we may be the underdogs.

But if we show the British people that we have not lost the fighting spirit and appetite for change which has defined this party throughout its history then we can and will win.

Win for our Party.

Win for our country.

Win for the British people.

December 3, 2015
Peter Mandelson – 2008 Statement on the Future of the Royal Mail
Below is the text of the statement made by Peter Mandelson in the House of Lords on December 16th 2008.

My Lords, I wish to make a statement about the Royal Mail.

This Government is firmly committed to a universal postal service: that is, the ability of the 28 million homes and businesses across the country to receive mail six days a week, with the promise that one price goes anywhere.

The universal service helps to bind us together as a country. And, as well as its social importance, it is the means by which many companies build and operate their businesses, but it doesn’t come free.

Last December, John Hutton invited Richard Hooper to lead a full, independent review of the postal services market. Its purpose was to look ahead to the future and to recommend the steps needed to sustain the universal service, in a world where technology, consumer behaviour and the communications market are all rapidly changing. The review did not cover the Post Office network.

I have now received Richard Hooper’s final report. It is a serious, wide-ranging study, and makes sober reading. We are publishing it this afternoon. I am very grateful to Richard Hooper, and to Dame Deirdre Hutton and Ian Smith, for their work on it.

Hooper’s conclusions

Let me set out Hooper’s analysis of the challenges facing the Royal Mail.

First, there has been a revolution in communications technology over the past decade as consumers turn to emails, the internet and text messages. In this country 60 billion text messages were sent last year. And we now send five million fewer letters per day than two years ago.

Hooper is absolutely clear that the main challenge to the Royal Mail is from the impact of changes in technology and consumer choices. His estimate is that, last year, the shift of mail to these new technologies cost the company £500 million in lost profits. That is five times the impact of business lost to other postal companies in our liberalised market. The message is therefore clear. Making these other companies go away is not the answer to the Royal Mail succeeding.

Royal Mail’s success matters because it is the only company capable of delivering mail to every address in the UK, six days a week. And as Hooper makes clear that will be the case for the foreseeable future.

So a healthy Royal Mail is vital to sustaining the universal service.

The second challenge is efficiency. Hooper reports that Royal Mail is less automated and less efficient than its Western European counterparts. In modern European postal companies, 85% of mail is put in walk-order by machine for delivery to the individual home or business. By contrast, in Britain, in local delivery offices it is still done entirely by hand. The Royal Mail urgently needs to catch up and modernise.

The third challenge is the Pension Fund. Hooper warns that Royal Mail has a large, growing and volatile pension fund deficit. This is near impossible for the business to manage and is a huge demand on its revenues. Each year on top of its regular £500 million contribution to the pension fund, the company is having to find an extra “top up” of £280 million to plug the deficit. These payments look set to rise substantially when the fund is re-valued next year.

Fourth, Hooper says labour relations in the company need to improve. Levels of trust and co-operation are low. Industrial action takes place too often. A fresh start in industrial relations is badly needed.

Fifth, regulation. Hooper also reports a lack of trust in the relationship between the company and the regulator. There are disagreements about basic information and these tensions divert energy from the chief challenge of modernising the business.

So overall, Hooper’s conclusions are crystal clear. The status quo is untenable. The universal service is under threat. The choice we face is either downgrading the universal service as we manage decline or acting now to turn things round and secure the Royal Mail’s future.

Hooper’s Recommendations

At the heart of the Hooper report are three linked recommendations.

Pension deficit

First, the pension fund deficit. Hooper recognises that this represents a significant challenge for the company.

The Report recommends that as part of a package of changes, the government should take over responsibility for reducing substantially the pension deficit. I would stress that Hooper says this would only be justified as part of a coherent package to secure the Royal Mail’s long term viability.

Partnership

Secondly and closely related, to improve the Royal Mail’s performance it should forge a strategic minority partnership with a postal operator with a proven record in transforming its business, working closely with the workforce. This, Hooper believes, would give Royal Mail the confidence, the experience and the capital to make the changes needed to improve performance and face the future. In other words, save the Royal Mail by investing in its future.

Regulation

Finally, regulation. Hooper proposes Ofcom should take over responsibility from Postcomm for regulating the postal market. Its primary responsibility would be to maintain the universal service in the wider context of the other changes taking place in communication markets.

Government response

My Department will want to study the report in detail. I intend to respond with a full statement of our policy in the early part of next year.

With backing from the Government, the Royal Mail has been improving performance in recent years. But progress has been too slow and Hooper is clear that, in the face of the challenges confronting the company, transformation must be faster and more far reaching.

I can say now that the Government agrees with Hooper’s analysis and the recommendations. As he does, we reject cutting back the universal service. Indeed, we share his ambition for a strong universal service and strong Royal Mail. And we intend to take forward the recommendations as a coherent package of measures.

We will fulfil our manifesto commitment to “a publicly owned Royal Mail fully restored to good health, providing customers with an excellent service and its employees with rewarding employment”. Bringing in a partner through a minority stake in the Royal Mail’s postal business will help us deliver that goal. It will bring the Royal Mail fresh investment, new opportunities to grow in Europe and internationally, and to offer new services. It will provide a fresh new impetus to modernising the Royal Mail and securing the universal service.

We and the Royal Mail have already received one expression of interest from the Dutch postal company, TNT, to build such a partnership. I very much welcome this approach from an experienced postal company, just as I will welcome other expressions of interest from credible partners should they come forward. My Department will pursue this in the coming weeks.

Post Office

Finally, I should comment on the Post Office, which was not part of the review’s terms of reference.

The network of local Post Offices combines a unique set of commercial, public and social roles. In recognition of this a partnership would not include the Post Office network.

But a healthier Royal Mail letters business will be good for the Post Office. Today’s announcement will help underpin our existing commitment to the Post Office network. We are providing £1.7 billion to 2011 to support a network of around 11,500 branches. We will continue to support the non-commercial network beyond that time. Noble Lords will recall the recent announcement that the Post Office Card Account will stay with the Post Office. We will now build on that decision to ensure a stable and sustainable network for the future.

We are determined to have a Post Office network offering a broad range of services throughout the country, supporting both social and financial inclusion. I am delighted that the House of Commons Business and Enterprise Select Committee has agreed to undertake an inquiry into what further services the Post Office could offer.

Conclusion

My Lords, I believe that Royal Mail and the postal market can thrive in the future – provided that decisive action is taken now. Without far-reaching change, the opportunities brought by technology will become overwhelming threats. This need not be the case. I believe that there are benefits for everybody in the package of measures that we intend to take forward.
- It will protect the universal service for consumers.
- It will give Royal Mail new opportunities to modernise and develop.
- It offers the Royal Mail’s staff a future in a modern, efficient postal operator with more secure pension arrangements.
- It offers the whole country a Royal Mail we can be proud of.
I commend this statement to the House.
December 3, 2015
Peter Mandelson – 2008 Foresight Public Debate Speech

Below is the text of the speech given on November 6th 2008 by Peter Mandelson.

Barack Obama’s victory is one of the most exciting moments of my political and public life. It is a once in a generation opportunity for progressive ideals and my kind of social democratic and internationalist politics.

When he comes to office, Mr Obama will face the challenges of war and climate change, as well as economic turmoil. He has been forthright on his policies in the first two and we look forward to working closely with him on the last.

In Britain I’m well known to be a strong pro European. But I’ve always been a strong pro American as well. I believe America at its best shares my – and European – values of democracy, personal freedom and opportunity for all. These values do not always equate to the right policies. But America has an extraordinary capacity to renew itself, to address its weaknesses, come to terms with its past and make change happen.

Most comment has focussed on the historic significance of the election of a black President for a society once so scarred by racial discrimination and prejudice – and the extraordinary signal this sends to people across the world about what America stands for. In recent years, there has been an evolution in American policy on a number of the important issues facing the world, so Mr Obama has a strong platform for launching a new drive for progressive world leadership. In my lifetime, I have not known a time when this leadership is more needed.

Because of this, there is also a great opportunity for Europe. We don’t compete. We need a partner, to work together to solve the global economic crisis, tackle climate change and meet the other pressing global challenges of poverty and development. The US and EU cannot, by themselves, make these happen. But we are indispensable to them being achieved. Only by the EU and US collaborating is there any chance of creating a stable and secure multilateral order.

However I want to underline three caveats:

First, in the global age Europe – and that includes Britain – cannot claim an exclusive relationship with an Obama Washington. The world has turned. To solve the global economic crisis, we have to bring in the new powerhouses of the world as equal partners. To tackle climate change we have to strike a deal with China and India. To sustain free trade and the beneficial forces of globalisation, we have to develop a new, progressive economics that embraces both the developed and emerging nations of the world.

Second, to be a credible partner, Europe has to step up to the table. We have shown leadership on climate change: we now have to deliver on our national commitments. In peace keeping and peace enforcement, we have to make the bigger contribution as European nations that I believe Barack Obama will expect. On trade and economics, we have to sustain an open Single Market at home and openness abroad. Half measures or half hearted ambivalence will not do. Because of the seriousness of the challenges we face, the demands on us are great.

Third, we need to work with Barack Obama to defeat those forces inside America that will try to hold him back. These include isolationists and protectionists and on Capitol Hill these forces are strongly featured in the Democratic Party itself – stronger still after some of Tuesday’s victories.

The only way forward for the United States and for the world is if America thinks globally. Yet more trade barriers, for example, are not the answer. Instead, the new Administration will have to defeat isolationists by developing a new progressive social model for the United States. This needs to emulate the best of Europe’s Social Model, helping working people more effectively through difficult economic adjustments, providing universal cost-effective healthcare and enabling youngsters to go to college whatever their family’s economic circumstance. These are policies that offer a mix of social opportunity and protection not to be confused with protectionism, the kind of progressive policies that Gordon Brown and I stand for, and we should explain and urge our Democrat friends and allies to adopt them.

This is the modern way – and the only way – to embrace the changes the world is undergoing, to sustain a progressive globalisation with social justice. Indeed politically, you cannot have the one without the other. For thirty years, globalisation was funded by western capital and structured to meet western demand. This is already changing. Last year, one in every six dollars of Foreign Direct Investment came from outside the developed world. China now ranks third in world goods trade with 12% of global exports and is fourth in world services trade with 5% of global exports. According to projections by Goldman Sachs, it is set to become the world’s largest economy, followed by the US and India, by 2050.

This shift, the biggest restructuring of the global economy since the industrial revolution, is increasing competition – and, therefore, generating huge economic and social pressures – at home and abroad. It’s intensifying demand for the world’s nature resources, a potentially huge competition which new trade rules need to govern.

As old economic certainties are eroded, countries and individuals are being challenged to find new ways to succeed. These new ways are not a race to the bottom as so many fear – on wages, regulations or anything else. They are about how most effectively to foster growth, not by reliance on financial engineering, but by genuine innovation and increases in productivity and through continued engagement with a global economy set to double in size during the next twenty five years. A global economy that since the early 1990s has helped over 400 million people from the developing world escape extreme poverty, and which through rising aspiration and a greater demand for high-value goods and services is a major source of prosperity in both the American and European economies.

That’s why it is self-interest for the US and EU to champion open markets and a multilateral system of trade and why this means supporting the Doha Round of trade negotiations. And I hope that when they meet next weekend, the G20 leaders will provide a strong signal of their commitment to intensifying negotiations and reaching agreement on the framework for a deal this year.

The early appointment of a US Trade Representative by the new administration, and engagement in the Doha negotiations would send a powerful message that, despite the changing world order – indeed because of it – countries can work together for their own, national and shared global interests. That’s what should bind Europe and the US, and what Britain should champion.

We want America to seize the opportunity of the Obama victory to reclaim its leadership role in the world. But Mr Obama will never succeed if Congress forces the new President into isolationism and protectionism, which forces America to turn in on itself.

December 3, 2015
Peter Mandelson – 1998 Speech to TUC Conference

Below is the text of the speech made by Peter Mandelson to the 1998 TUC Conference.

Thank you very much for that welcome. May I say that this is a very poignant moment for me indeed. I was one of the TUC’s brightest eyed young staffers when, 20 years ago to the month, I attended Congress. I will always be grateful to the TUC for the introduction it gave me to the world of trade unions, to practical politics, and to the values of systematic filing. Those were the days when I thought of John Monks as my boss. You can all take comfort from that. Old habits die very hard.

Then too another GMB General Secretary, the leader of my own union, was President of Congress, David Basnett, a man who had a similar reputation for choosing his words very carefully.

Then too there was a Labour Government and the Prime Minister came to address us, and you will be relieved to know that I am not going to take a trip down memory lane by trying to sing you a music hall ditty as he did, but those were times when you had to keep your spirits up.

In the mid 1970s an economic whirlwind of unprecedented ferocity had hit the world economy. The labour Movement faced that whirlwind with great fortitude and great solidarity. Inflationary collapse was averted. Unemployment began to fall. But, as the fatal winter that followed that Congress was to prove, Labour’s achievement was fragile. Tony Blair is determined that in the 1990s we will not repeat the mistakes of the 1970s. No one in this hall ‑‑ not you, not me ‑‑ will complain at that.

This Labour Government has good relations with the trade unions, but there is a key difference with 20 years ago. Those relations are now not too close for comfort. Today we have dialogue, good dialogue, but not under any duress. We should be able to agree and disagree without either being in hock to one another, or at risk of falling out — a mature practical relationship based on shared values and a shared agenda.

For example, we both believe that a workplace, based on mutual respect and minimum standards of protection, safety and consultation, is one which works better and more productively. That is why we have signed the Social Chapter, why we are introducing the national minimum wage, and why we are implementing the Working Time Directive without delay. It took a Labour Government to make these momentous changes, a New Labour Government.

The Fairness at Work legislation will be the central building block of this legislative package. This legislation will not turn the clock back to the days of strikes without ballots, flying pickets and mass actions. None of us want that; nobody is calling for that. What it will do is demonstrate that it is possible to have flexibility in the workplace, and to treat people well. Be under no illusion, these are controversial changes for which we still have to argue and win the case, particularly in light of the growing pressures on British business, but argue for it I will — for legislation that is seen by all to be fair and to be balanced if it is to win enduring support, as I am confident it will do.

To support this, to do this, I can think of no better ally than Ian McCartney to help me take this Bill through Parliament. You all know Ian McCartney very well. When I arrived at the DTi I will admit to being a little worried about Fairness at Work and I called Ian in to talk about it. I said “Ian, you know, it is a tall order this Bill” and he said “Don’t worry, Peter, I will make short shrift of the critics”. This reassured me enormously. This Bill will strengthen partnership at work. In today’s economy partnership is key to competitive strength. Britain is in a non‑stop race to boost that strength, to create comparative advantage, to add value ‑‑ all against the background of our current economic difficulties.

I understand the concerns that are being expressed about the level of the pound. We are all well aware of how tough life is out there, particularly for manufacturing industry and for exporters. Nonetheless, John Prescott was right on Monday to say that we should not talk ourselves into recession. Employment is not going down. The economy has generated over 400,000 jobs since Labour came into office. The Government’s policy for Britain is clear: a strategy for stability amidst instability in an uncertain world; a commitment to end once and for all the dismal record of stop‑go, and of boom and bust, the roller coaster of economic activity that has so damaged confidence and investment in the British economy over the past two decades.

This is why we have taken the politics out of interest rates by vesting authority in Eddie George and his colleagues at the Bank of England. That is why Gordon Brown has taken the necessary tough action to clear the Tories overdraft and to put the public finances back on track. Gordon’s is not an enviable job. He puts the interests of the country before those of any pressure group. He has the honesty to say “no” when others are tempted to let it be known that they might have said “yes”. I fervently believe that we will reap the benefits of the tough but wise decisions he and the Government have taken.

Nobody is saying it will be easy; it won’t. Asia, Japan, Russia, Latin America, jitters on Wall Street, collapse of the real economy in Indonesia — we face constant reminders that we live in a global economy. What effects one country affects us all. There is no magic fix of Government intervention or extra money that can solve these problems.

That is why economic cooperation between countries has never been more important than now and why we must strengthen Britain’s position in Europe, now our natural home market. On Europe the people who threaten to cut Britain off from this home market are the leaders of today’s Tory Party with their head in the sand policy on the single currency.

Congress, in yesterday’s debate you proved yourselves far more sensible than them. On this issue, Government, business and unions are at one and we are working in partnership in Europe. Now, at the DTi I know that John Monks believes that my new role is actually the first real job I have had since leaving Congress House. I would not go that far but the job is certainly a real challenge. Some have scoffed that under the Tories the DTi was the Department of Timidity and Inaction. Under my leadership I can tell you, no more. My mission at the DTi is to use all the tools at our disposal to strengthen industry, enhance business performance and to create an environment in which enterprise flourishes.

Britain can do better — much, much better. As a nation we have a world class science base. We have talent and creativity galore. What we lack are the entrepreneurs to turn these natural strengths into products and services that customers want. We must overcome these weaknesses. For unless we do, Britain will never succeed in exploiting the potential of the knowledge based economy of the future. In that knowledge based economy scientific discovery and technical progress will reach more directly and much more swiftly into every aspect of our lives. The key to competitive success will lie in the exploitation of knowledge for commercially profitable ends, as much in manufacturing as in services. In the knowledge-based economy, the increasing reality of liberalised markets and open trade will destroy the tradition sources of competitive advantage. Once that stemmed solely from the skills and techniques of production. Now it depends much more on the creativity that surrounds it; the know how that dreams up new ideas; the innovation that brings forward new products and the marketing that builds new brands.

In this new world, Britain has a simple choice. To move with the times or be swept away by them. My clear view is that we must make change our friend, not our enemy. That is how in simple terms I define the mission of my department. It is a task in which I want your full support; because together we can put the future on Britain’s side.

But I know many of you in this hall will have an even bigger question at the back of your minds. “Where do you think, Peter, the trades unions fit into your bright, knowledge-based vision of the future? I can be very clear where I stand. I believe in trades unions, not just for reasons of sentiment – though when your first job opportunity was working for the unions, that sentiment is real enough – not just either because I will always remember how the trades unions helped Neil Kinnock save the Labour Party in the 1980s, just as in my grandfather’s time the trades unions saw the Party through the upheavals of the 1930s.

No, it is much more than sentiment. For millions of people, trades unions are both relevant and necessary in today’s world. The relationship between employer and employee is by its nature a fundamentally unequal one, one that the unscrupulous employer can exploit.

We all know that individuals at work still need the protection of trades unions against the arbitrary abuse of management power. We all know that a good relationship between trades union representatives and an employer can help to promote flexibility and productivity at work. Yes, I believe in trades unions. It is precisely because of that belief that you will always get from me honest, straight talking and candour. No grandstanding, no playing to the gallery, no more spin, honest.

Let me set out my vision of the role in society which I sincerely believe the unions can and should play.

Friends, a new economic future is beckoning for us in this country. For industry, it means adaptability, willingness to change, flexibility of working and a constant drive to modernise. If the trade unions want to be part of that future, then it means the same thing for you. In the 1980s the debate raged about whether the trades union were too strong or too weak. For some, that is still the dividing line. That is not a choice I accept, or one that the Government accept. For us the choice is between modern trades unions and those which are frozen in time, between effective trades unions and ineffective ones. I want to see modern unions working with successful companies in shaping Britain’s future.

I recognise that the trades unions have already made huge efforts over the years to change and modernise. Modernisation through the New Unionism project and the Organising Academy which is bringing a modern, business-like approach to the unglamorous but vital role of recruiting new members. I recognise that in many companies industrial relations have been transformed from the old-style battlefield of “them and us” to the new-style of co-operation in achieving shared success – shared success.

Good managers and good trades unionists have been responsible for that transformation. They need each other. But that modernisation and transformation must go further still. Indeed, if my analysis is right, it is never ending. I realise that this is not an entirely welcome message in a hall where in the past two decades so much painful change has had to be swallowed by so many. I know that to some of you I am seen as a non-stop moderniser, hell bent on change at any cost. I make no apology. I passionately believe that modernisation is essential in the trades unions’ own interest.

I saw some staggering statistics the other day. Only 6% of young employees are members of trade unions; only 18% of employees under the age of 30. The density of trades union membership is lowest in the fastest growing sectors of the economy. Of course I accept that there are rogue employers who actively discourage trade union membership, but for too many people trade unions appear only marginally relevant.

Many companies have built honest and credible partnerships with their employees with no involvement by trade unions at all. And if employers and employees are content with that, it is not the job of government to order them otherwise. Of course, it is not. As trade unions you can make the difference yourselves. To meet fully the challenge of modernisation, I suggest that you need to focus on three key areas.

You need to focus on delivering quality services to your members; helping achieve employers’ success and being seen as responsible to the general public.

First, delivery on behalf of your members. You are absolutely right to have put the emphasis back on what your members really care about – protection against arbitrary management behaviour or discrimination; fair levels of pay; safe working conditions; a pension to look forward to and the other essentials of decent conditions of employment. If together the trade unions and the Labour Party learnt one lesson from the 1970s and the 1980s it was the imperative to respond to the needs of individual members, not a vocal minority.

Trades unions cannot rely, and should not, on governments to deliver them a bigger membership. Unions have to win their position by demonstrating their value to members and potential members, but the Government do have some role in helping unions to represent their members in the most effective and most constructive way.

For example, in the Fairness at Work White Paper we said we intended to set up a Partnership fund to promote best practice in employee relations and their involvement.

You will be pleased to hear that I can today confirm that we are going to establish such a fund. Money will be made available for a series of projects to give employers and employee representatives a much better understanding of the challenges each face and what can be achieved by working together as companies like Tesco, Boots, Unisys, Blue Circle and European Gas Turbine are doing.

Working in partnership with employers brings me on to my second point: the need to focus on employer success. No union benefits from harming the companies its members work for. In the private sector that means actively working for and welcoming profits. In the public sector it means delivering ever better services of higher quality.

By the way, contrary to what you have read in the newspapers, no decisions have been taken to privatise the Post Office.

Congress, success in the public or private sector means awareness of labour costs. No one now deceives themselves that we can compete on costs regardless of quality. So no one should deceive themselves that we can compete on quality regardless of cost. It means sharing in the company’s success but also showing moderation in wage demands and flexibility in pay levels in times of economic difficulty. I say this every bit as much to company boards and to their directors as I do to trades unionists. By all means enjoy the rewards of success in the good times, but make sure those rewards are merited and make sure you are willing to share pain in the bad times, too.

The third test is being seen to be responsible to the public. I believe that unions have an important role which extends beyond the workplace. Trades unions are a force for good in our society in setting workplace minimum standards; in ensuring adequate health and safety; in promoting training and skills and in pressing for proper provision of pensions and other benefits.

Any responsible Government should always listen to what the trades unions have to say in these areas for they are unique in their ability to bring to the consideration of public policy the voice of direct workplace experience. The Government want to work with you in all these areas. We did on the National Minimum Wage. We have done so through the Skills Taskforce. We are doing so on the Competitiveness White Paper, and we shall do so in the development of the stake holder pension. I want to work with the trades unions.

But the extent to which the unions have a voice that carries influence and respect will always depend on the credibility and persuasiveness that unions themselves can command. That means co-operating in the modernisation of public services. It means working with us in forging other reforms, in the welfare system, in the schools and higher education, in de-centralising government. Above all, it means not attempting to veto change but embracing it and helping to manage it in the interests of all.

Tony Blair’s Government will never be a soft touch. We will do our duty whatever. We will never again contract out the governance of Britain to anyone, not to the TUC or its member unions, any more than we would to big corporate interests either.

As far as my Department is concerned, there is not a front door for some and a back door for others. There is one door for all – and it is always open.

Congress, the choice is yours – opposition or legitimate influence. I know my preference: it is for trade unions that draw increased strength from being modern, democratic, representative and influential, that day in and day out prove their relevance to their members, that match realism with responsibility in their dealings with employers and government. I believe that in working together in this way, we will not only generate respect for each other but that the unions will succeed in reinvigorating the public esteem they merit.

Take it from me. I know a little bit about public relations and improving images. So much so that one of these days I might even be able to do something about my own. But I am told that it will probably take me more than 48 hours in a week to do so.

Imagine depends on substance. Public relations will not succeed unless there is something real behind it. Trades unions do have the basis of such genuine appeal; a believe in social justice, an understanding of the real world, an ability to get to grips with practical workplace issues, a commitment to democratic methods and a willingness to co-operate.

That is not just a platform, it is a springboard for the trades unions. In leaping ahead to the new unionism demanded by economic change and by your own members, I can assure you that you will have my backing and that of the department I head.

I have battled for years for an electable Labour party. I am now battling for a successful country, strong in services and manufacturing, generous at home and abroad, with acclaimed public services and a dynamic private sector.

Congress, join me, please, in the battle for success.

Thank you very much.

December 3, 2015
Peter Mandelson – 1992 Maiden Speech to the House of Commons

Below is the text of the maiden speech made by Peter Mandelson in the House of Commons on 14th May 1992.

It is my pleasure to commend my hon. Friend the Member for Woolwich (Mr. Austin-Walker) on an excellent maiden speech. He demonstrated tremendous experience and knowledge, qualities that will enable him to make many more valued contributions to the House in the future. I only hope that I am able to acquit myself as ably as he has done.

In representing Hartlepool, I have the honour of succeeding Ted Leadbitter, who was as popular in the House as he was admired in his constituency. Ted Leadbitter was first elected in 1964. Supported by his wife Irene and his indomitable agent, Mrs. Elsie Reed, he lost no time in demonstrating his diligence and, equally, his independence.

My right hon. Friend the Member for Chesterfield (Mr. Benn), who was Postmaster-General at the time, describes in his ministerial diaries for 10 February 1965—when the Labour Government had a majority of only three—how a new hon. Member, Ted Leadbitter from West Hartlepool, had written to complain about a telegraph pole being put up in front of a constituent’s home. Refusing to be fobbed off with some bureaucratic response, the MP of three months’ standing rang up my right hon. Friend’s office with the message: Mr. Leadbitter regards the Postmaster-General’s reply as so rude and evasive that he does not propose to come to the House or to accept the Labour whip until the answer is withdrawn and the pole is removed. The pole was duly removed. I am sure that hon. Members can agree that in such important matters—to parody Edmund Burke—I, too, should be a representative of my constituents, not a delegate of my party. I can reassure the Whips, however, that I am not aware—at present at any rate—of any misplaced telephone poles in Hartlepool.

Ted Leadbitter’s predecessor, the first Labour Member to be elected for the constituency, in 1945, was David Jones. A man who knew poverty and unemployment at first hand, Mr. Jones dedicated himself to freeing his constituents from the appalling social conditions of the time, “the evil days”, as he called them, of ill-health, poor housing and insecurity in old age. David Jones’ memory is particularly special to me because he was a friend of my grandfather when he was a Member of this House, and he spoke for David Jones at several elections.

When they took their seats, my predecessors took pride in representing the two Hartlepools. While I represent only one in name, I am conscious of the fierce community loyalties in both Hartlepool and West Hartlepool. Even before the two Hartlepools were each denied their own borough status, music hall references celebrated the local demand for home rule. In the review of local government to which the Conservative party is committed, the minimum that would be acceptable to current residents is the restoration of full unitary authority status to Hartlepool. I shall continue the work of my predecessor in supporting that change.

Hartlepool’s great strength is that it rightly sees itself as a community, with shared needs, strongly felt local loyalties and a sense of common purpose and civic pride. That pride is especially strong now. Our football team, Hartlepool United, is at its highest ever league position in the history of the club; the West Hartlepool Rugby Football Club has gained promotion this season to national division one; and first-class cricket has arrived in the town, with the selection of the town’s club as a venue for Durham county cricket.

However, there are serious challenges to be faced by my town. Fifty years ago, Hartlepool, like other towns, even with its social problems, was at least more industrially secure because of the success of its shipyards, engineering, steel-making and manufacturing. The task of the coming decade, as we approach the 21st century, is to transform a now industrially poorer and less confident Hartlepool into the thriving industrial community of the future that it can become. That is why the people of Hartlepool are now embarking on an era of change. They do so in the knowledge that it is not possible for any community or town—or, indeed, political party—to try to recreate the future in the image of the past.

For the first time, in the general election, the Labour party in Hartlepool received more than 50 per cent. of the popular vote. It was a vote to embrace change but it is still change for the same purpose now as it was 50 years ago: to use the power of the community, acting together, to improve the individual circumstances of all. Central to that process is a modern economic policy; new ways of revitalising industry; innovative solutions to the problems created by social change; and sustaining economic growth in ways that are friendly to the environment.

My aim is to see new opportunities created for my constituents so that the confidence and optimism experienced in former times can be enjoyed once again by old and young alike. New opportunities do not mean opt-out schools and opt-out hospitals. When the services of thousands of patients opt out and the local hospital ceases to feel like the local community hospital, when thousands opt out of schools and the local schools cease to be like local community schools, the foundation on which the community is based is being removed.

What is true for our public services is also true, although in a different way, for industry. We cannot rebuild the industrial strength of our nation when manufacturing investment fell by 13 per cent. last year and is still falling now. When apprenticeships are axed and young school leavers fail to find training places, when firms are denied the chance to adapt to new skills and technology, we are eliminating the means by which depleted communities can become strong again.

The local training and enterprise council has seen a 20 per cent. Government cut in its training budget this year. At a time of rising unemployment, is that any way to restore industrial strength to our country? The result of that short-termism is both to deprive our young people of the opportunity that they need to get on in life and to deprive the nation of talent and ability of its people, which is critical to its future success.

When the Conservative party changed its leader and softened its rhetoric, the promise was of a classless society, a nation at ease with itself and opportunity for all. But what hope is there for the young person without a job due to the recession, without training due to cuts in funding, and without benefit due to the actions of a Social Security Minister who is now Prime Minister?

What opportunity is there for the thousands in my constituency and the millions in this country, struggling in poverty and living on the margins of our society? What ease is there in the mind of anyone, in or out of work, if our industrial base, and, therefore, our economic future, lies untended and in neglect?

In truth, there cannot be hope, or opportunity or ease unless we all accept our responsibility to help create them and, in doing so, realise that this benefits us all. Yet when we examine the Government’s economic policy we find that urgency and responsibility absent. In large part, that is because the Government cannot break free from their past. The days of reliance on some invisible hand of the market are as discredited as those of centralised planning and the command economy. We need a new partnership between the public sector, the business community and the Government, based not on dogma but on co-operation to secure objectives in the interests of the economy as a whole. The principle of co-operation is more relevant than ever, even if we must look to different ways and new methods to fulfill that principle.

Let me stress that the townspeople whom I represent are looking for neither handouts nor subsidies from Government. They have never deluded themselves that the man in Whitehall knows best. In the absence of a Government willing to back the scale of investment in new skills and technology which we need in Hartlepool, the town has not sat back. Over the past decade, the local authority has worked tirelessly to bring in new employment, in both the service and industrial sectors. Indeed, even with the drastically reduced help available from central Government, the partnership between public and private sector has achieved much.

The new marina, being built with the backing of Teesside development corporation and the borough council, is a symbol of the town’s efforts at recovery, even if it has not brought the employment that many hoped for. It has, however, helped to draw to the town the new Imperial War Museum located in the north, and I hope that that exciting project will receive the Government’s full support. The marina will also enable the town to play host to the Round Britain yacht race this summer.

Hartlepool has made a powerful bid for the Department of the Environment’s city challenge programme, and if it is successful, as I earnestly hope it will be, it will further help to transform the appearance and economic potential of Hartlepool’s central locations.

All those initiatives show how willing we and similar communities are to work with any opportunities opened up to us. But imagine how much more successful the industrious people of Hartlepool would be with a Government committed to re-skilling the work force and actively supporting our local industrial effort. That co-operation is needed now.

Hartlepool and the whole of the north face immense competitive challenges: the savage nature of the current recession; the creation this year of the single European market; and the completion, in a few years, of the channel tunnel. If we fail to invest now, we cannot meet those future challenges.

In rhetoric, the Government accept that case. But they should also realise that to will the ends without willing the means is, as Tawney said, akin to inviting unwelcome guests to dinner in the certain knowledge that circumstances will prevent them from being able to attend. What Hartlepool and the north-east desperately need is not another cynical invitation to share in the nation’s fortune, only to find that no place is set for it at the table. In the 1990s we need a decade of regeneration—in industry, our public services and our social cohesion. We can achieve that, but only if we recognise the size of the task to be done and the utter necessity of working together as a nation to achieve it.

Those values of partnership, co-operation and social justice represent all that is best in the Labour party, as true today as ever. It will be my privilege to advance those values on behalf of my constituents and my party throughout my time in this House.

December 3, 2015
Denis MacShane – 2004 Speech on Cyprus

Below is the text of the speech made by Denis MacShane, the then Foreign Office Minister, at Green Lane in London on 22nd January 2004.

Not for the first time, Cyprus stands at a crossroads. For someone who has not had to live through the pain of ethnic conflict, dispossession and division, it may seem all too easy to tell those who have, which way to turn. I presume to do so now because Britain wants Cyprus to succeed – not in a paternalistic or condescending way, but because we have always thought it would be in our interests to have a strong, self-confident Cyprus inside the EU.

It is a pleasure to be here this evening and pay tribute to the work of Harris Sophiclides and thank him for his consistent work with British parliamentarians and the measured but determined the way he has defended the causes so dear to him and everyone in this room.

I want Cyprus to succeed because I first went to the island in the 1970s and no-one visits Cyprus without leaving a bit of their heart behind. As a political activist I know how important Cyprus has been to all who want a future of peace, prosperity and progressive politics in the world. My friends Joan Ryan MP, Andy Love MP, Stephen Twigg MP, Andrew Dismore MP and Barbara Roche MP have been tireless in defending the needs and rights of the Cypriot community in London. Both communities – as the commonality of interests in Green Lane at times seems more in the true spirit of Cyprus than the differences on both sides of the Green Line that runs through Nicosia.

High on the Trodos Mountains, there can be no more wonderful place in the world to those of us who love mountains and the high air that allow the vision of eagles in place of the blindness of moles.

We want the leaders of Cyprus to have the vision of eagles – seeing a 21st century Cyprus in which the present stops being the prisoner of the past and together a new future, a European future is built.

THE OPPORTUNITY OF ACCESSION

What is at stake now is not, of course, the accession of Cyprus itself. That long-standing goal of British foreign policy will be achieved this May. And a very good thing too. No, what is at stake is whether the Cyprus which accedes is going to be strong, self-confident, reunited, healed – the kind of partner we and our fellow Member States really want.

These weeks before accession offer Cyprus an opportunity like none other – which, if squandered, will not quickly repeat itself. I passionately believe that, in Cyprus as elsewhere, the path to reconciliation and peace lies through looking forward to what the future offers, not dwelling on past injustices. In Turkey last week, I was asked why there appeared to be opposition in Austria to Turkey’s desire to begin talks on EU accession. I muttered something about ‘1571 and Jan Sobiewski’ – when the Sultan’s troops were stopped at the gates of Vienna by the bravery of the Polish soldiers. ‘But, minister, that was four centuries ago,’ I was told. ‘Yes, but all I hear from you on Cyprus is what happened four decades ago,’. I said just as often I hear from friends that the whole point of politics is to avenge what happened in Cyprus in 1974. Four centuries, four decades, thirty years. If we live in the past, we cannot come to terms with the present. But it is the future I want us tonight to think about.

And the future, in Europe, offers a united, prosperous Cyprus playing its destined, influential role within a stable eastern Mediterranean region.

THE GOAL OF RAPPROCHMENT

There is another goal we should keep in mind. For too long the region has suffered because of suspicion between Greece and Turkey – and between Greek and Turkish Cypriots. Rapprochement between Athens and Ankara has made great strides. Cyprus – and all Cypriots – now have the chance to pursue their own rapprochement. And in time – as I also passionately believe – a stable, secular, democratic Turkey will join the European Union – with all the benefits that will bring to the Union, to the region and to the whole Islamic world.

But if we are to realise either of these objectives we need to put the Cyprus problem behind us. The partial opening of the Green Line in April last year sowed seeds of hope. The confidence building measures of the Cypriot government were an important step forward. The magnanimity and plain common sense showed by ordinary Cypriots was a lesson to us all. And it demolished the xenophobic arguments some have used to criticise the Annan plan. I am utterly convinced that the common ground identified by the UN Secretary General is the only way forward for Cyprus, towards that future in which Greek and Turkish Cypriots can get on with business, and unlock their island’s true potential as a prosperous, normal EU member state. Europe has worked at 15 – and will work at 25. How much better, at 25 than at 24 and a half! I know Cyprus desperately wants to shed its image as always the ‘special case’, the weakest link in Europe’s chain.

THE ANNAN PLAN

Kofi Annan has produced detailed proposals, carefully balanced to address the fundamental concerns of both communities. His proposals may seem complex – but so are the issues they reconcile. It can be done. Today’s Europe has other examples of states uniting differing peoples, and of elaborate systems of institutional checks and balances. Although it already reflects many hours of negotiation, and decades of expertise on the part of the United Nations, the Annan Plan is not a take-it-or-leave-it proposition. The final balance is a matter for the parties themselves, and for the people of Cyprus in two referendums.

From Cypriot friends in London I have heard criticisms – often loud and condemnatory – of the Annan Plan. Last week, I heard in Turkey equally angry opposition from some quarters to Annan. One might be tempted to say that if both sides think Annan is wrong, it must be right. All I can say is that I do no think there is a better alternative. Demand that Annan be changed to suit each and every demand put by people who remember how they were treated in the 1960s or how they were dispossessed in the 1970s and we will live in the past not build a future.

Europe stands ready to help. The European Union has undertaken to accommodate the terms of a Cyprus settlement – by which we mean that the unique aspects of the new Cyprus envisaged by the UN Secretary General, including guarantees for both communities, will not fall foul of some rigid EU template. Indeed, members of the European Commission were closely involved in drafting the EU elements of the Annan plan, and both they and the Member States took the unanimous view that the Annan plan provided for a workable and viable settlement for an EU-member reunited Cyprus. Europe’s willingness to back a Cypriot answer to the Cyprus question is an important contribution to the search for peace. And I have to say that Europe will have little patience with attempts to argue that the Annan Plan is insufficiently European, when the plan has the backing of all the member states! For its part, the European Commission has frequently repeated its commitment to hold a pledging conference, to galvanise the economic support which a politically successful settlement would be bound to attract from the donor community and International Financial Institutions. Everybody loves a winner. If Cyprus can get the politics right, public and private sector investors will regard it as a one-way bet. In such propitious circumstances, the Annan Plan’s emphasis on financial compensation for those who have suffered in the past can be fully appreciated. It is a viable, forward-thinking philosophy, which has been pioneered successfully by peacemakers in other parts of the world.

There are signs from Ankara that Turkey too realises that the clock is ticking loudly now, and how much is at stake – for Cyprus and for Turkey itself. Prime Minister Erdogan will take his ideas to the UN Secretary General this weekend and then to Washington next week. I have urged Turkey to be imaginative and generous. If Ataturk could switch the Ottoman Arab alphabet to European letters in one month, it should not be impossible for the Turkish government, army and parliament to move forward to a Cyprus settlement between now and 1 May. Make no mistake. A divided Cyprus with barbed wire manned by soldiers of a non-EU member state will not send out a good signal for Turkey’s bid to see EU accession talks start this December. Equally, a Turkey that showed it had removed all obstacles to a united Cyprus entering the EU on May 1st would be given an immeasurable boost in its European aspirations. I have spelt out this message in public and in private to all levels of Turkey.

THE PRIZE OF SUCCESS

Tonight I want to send the same message to our friends and partners in the Cypriot government. The British Government is urging all sides to meet the UN Secretary General’s requirements for a resumption of negotiations. The prize is there for the taking. History will not look kindly on those too timid or too bitter to reach out and grab it.

For Turkey, there is an important resonance with its own EU candidature. Turkey’s approach to the Cyprus issue is a golden opportunity to refute the allegation that it sees Cyprus as a bargaining chip; and, instead, to be judged on the basis of the AKP government’s impressive domestic reforms. Much remains to be done on the implementation front. But the campaigners for human rights and the lawyers defending freedom of expression I met in Turkey told me that despite their criticisms they were united in wanting to see the EU give the green light to the beginning of the long process of Turkish accession to the EU. A Cyprus settlement would be good for Turkey on its own merits, of course. But it would also transform the European politics surrounding its accession bid. At last, Turkey would be seen, as it deserves to be seen, as a source of solutions instead of problems.

For the Republic of Cyprus it is equally clear. No one can or should stand in the way of her accession to the EU on 1 May. But would it not be a Pyrrhic victory, for Cyprus to join divided and incomplete? Cypriots are all too familiar with a feeling of insecurity. Membership of the EU will undoubtedly help address those fears. For a start, membership of the EU will underpin, in new and significant ways, the unshakeable friendship between Britain and Cyprus. But the prospects of a divided Cyprus, even within the EU, are far less certain, and almost certainly worse, than the prospects of a re-united Cyprus. Moreover, stability in the wider middle East is too important a prize for Europe to allow it – indefinitely – to be held hostage by those who are themselves prisoners of the past.

The Eastern Mediterranean and its littoral are home to many of the world’s problems. For Turkey and Greece, for the two communities of Cyprus to find their way to peace would send out a powerful message that Europe works – that Europe can create peace in place of conflict. Today, one million British people visit Izmir and the resorts of its Aegean coastline and thousands settle there. The tourist and business and cultural connections with Cyprus do not need spelling out. Cyprus is part of our history, the Cypriots of London and our other cities have contributed so much to Britain’s prosperity, culture and, sense of community. I urge all to seize the chance of peace and show that the United Nations and the European Union can work together to bring to an end an conflict that has caused so much hurt, distress and dispossession. I hope the message from Green Lane in London is that we do not need a green line in Cyrpus anymore. Whether your alphabet ends with Zed or Omega it begins with A for Annan, A for Ankara and A for Athens working in partnership, A for aspirations and ambitions from all of us to shape a united Cyprus in tomorrow’s Europe.

I want and the British government wants a new Cyprus, united, free and European, to become a reality. Time is running out. I urge all of my friends here tonight to help build that new Cyprus, for a new Europe, in a new century.

Thank you.

December 3, 2015