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Tag: Speeches

  • John Reid – 2003 Speech to Amicus Conference

    Below is the text of the speech made by the then Health Secretary, John Reid, to the Amicus Conference at Bishop’s Stortford on 17th September 2003.

    NHS values are at the core of existing and future policy of this Government. Equal access to health care free at the point of need paid for out of general taxation. We need to say much more loudly how important these principles are in the improvement of the NHS.

    Especially since the consensus which has held for almost six decades has now been shattered by a Conservative Party which is more extreme on the issue of health than even Mrs. Thatcher. In that, they are at odds with the British people.

    Independent MORI survey data shows consistently that three quarters of the British people believe the NHS is critical to British society and we must do everything to maintain it.

    Satisfaction with the NHS is higher than 10 years ago. And the NHS – and the future of the NHS – is not only a key issue. People feel it is more important than any other issue – including crime and immigration. They are committed to this idea of collective provision.

    And one of the central aspects of that is the belief that everyone in the country should have equal access to care – that no one should be discriminated against in their access to health care because they have less money or because they live in the wrong part of town.

    This value of equity rests at the heart of our people’s affection for the NHS and their trust in it.

    That is why the Government have regarded it as so important. This is why we set up NICE in order to overcome inequity in treatment.

    People believe strongly that if we all pay for the NHS out of the taxation that we all contribute towards, then we all have the right to use the NHS equally.

    People recognise that the introduction of money directly into the health service transaction would add a considerable barrier to access for those people who had less money than others.

    If money was involved as a part of each health service transaction – whether at the GPs, when seeing a nurse, or at hospital – those people who had more money would be able to increase their access. We would therefore not have a system of equal access.

    So it is not through individual meanness that the British people reject any form of payment for health services. Rather it is because they recognise the inequity this would inevitably cause.

    As today’s Datamonitor report on private medical insurance shows the number of people taking out private medical insurance has fallen by more than 10% this year. Their own analyst points out this is because “recent hike in premiums has priced some out of the market”. As the NHS gets better, private medical insurance is getting dearer.

    This is a major challenge to the Tory patient passport plans, and they will now have to recost their plans. On last year’s figures the Tories needed to find £1billion to fund this subsidy skewed to the wealthy. As the premiums go up, the potential tax relief liability goes up. So now they’ll need to make even more cuts to the NHS to fund their policy. Given the escalating and unsupported cost of this policy, Liam Fox should today dump his ridiculous proposal and return to the principles of the NHS. Equal access to treatment free at the point of need.

    This is a value with which the British people agree. Only around 1 in 10 people feel that the Government should encourage people to go private if they can afford it. And only 5% feel that NHS money should be given to people to buy private health care. As far as health services are concerned, inequity is simply not acceptable to most of the British people.

    The original White Paper on the NHS written in 1944 expressed this simply: “Everybody in the country…should have an equal opportunity to benefit from medical and other services”. That was an important aspiration then – it is important now.

    So equity is not an ‘add on’ to the NHS. It is a cornerstone of the NHS itself. Social fairness in the relief of pain and distress.

    And yet, for all our success in combating preventable pain, the National Health Service has not as yet achieved that aim. At the moment, the NHS principle of equity provides the opportunity for a universal and equitable service, since it does not introduce the barrier of cost to the patient into the process.

    But we must be honest – the present system does not yet meet this goal. We must do more.

    The first thing this needs is extra investment to provide the resources and the capacity we need. The extra investment that is now taking place in the NHS over the next five years we will see the biggest sustained funding increase in history.

    That massive increase – and those extra 55,000 nurses, 6,500 doctors, tens of thousands of additional workers – provide us with the possibility of moving further towards the goal of equality of access.

    But we need more than just increases in capacity.

    In July, I outlined the developments that will help us work towards our manifesto commitment on choice, which said:

    “We will give patients more choice…… By the end of 2005 every hospital appointment will be booked for the convenience of the patient making it easier for patients and their GPs to choose the hospital and the consultant that best suits their needs.”

    Today I want to explain to you that one of the main reasons for increasing choice in the NHS is to increase the fair distribution of access to health services.

    Choice and capacity building are partners, not enemies.

    I recognise that for some people this may appear counter-intuitive; for some time now it has been simply assumed that any increase in choice would automatically lead to a decrease in fairness. Many commentators have expressed the belief that it is inevitable that an increase in patient choice would automatically mean we lose the equity that they believe is a cornerstone in the provision of NHS services.

    I disagree with them on two counts.

    First, they are wrong to assume that the existing NHS distributes access to health care in an equitable manner.

    Second they are wrong to see choice as inevitably increasing inequity.

    The Government’s commitment to fairness in the health service is so strong that to help to extend fairness we will extend choice for patients in the NHS.

    The fulcrum of my argument is not just that fairness is central to the NHS, but an honest acceptance of the fact that the aim of the 1948 health service to provide equality of access to healthcare has not been fully met.

    Therefore, if we take this principle seriously – if we really want to achieve fairness in access to health care rather than just talk about it in resolutions – the NHS will have to work differently to bring it into reality.

    In the past, the collective responsibility to achieve equity in access to health was demonstrated by providing health services for ‘the general public’. For decades it was felt that in order to meet the health service needs of masses of people we would need to mass-produce a health service.

    It was felt over these decades that uniformity would create equal treatment for all. It was believed that delivering everyone the same sort of service would ensure that everyone would be treated fairly. The idea seemed to be that all of the British people were all the same and therefore if we were treated all the same it would create fairness.

    This was not the case. The mass production of any service ultimately fails to meet the individual needs of each service user. We have understood that lesson in industry; and we increasingly understand it in service delivery. Since the 1970s we know that uniform services have failed to meet the needs of women, people from ethnic minorities and others in the population who are without sufficient confidence and resources.

    We need a service which is comprehensive, fair to all, and personal to each.

    The problem of unfair health service access is not a new one. Researchers have been pointing it out for some time. A famous left wing critique of the NHS, Tudor Hart, as far back as 1971 created the famous “inverse care law”.

    His point is that, for a variety of reasons, the areas where there are poorer people with greater need simply have less health services than better off areas.

    We recognised that a part of the inverse care law is caused by material factors. More resources had to go to poorer areas. So our distribution of investment to PCTs last December gave the largest increases to those areas where there is the greatest health need.

    This emphasis on revenue spending has been matched by some of the larger inputs on capital expenditure. So for example there is a £707 million programme of investment in the infrastructure to support the continuing expansion of cardiac centres and diagnostic facilities in District General Hospitals. In cancer, new scanners have been delivered to the 6 most deprived health authorities in the country.

    It is not possible to change the distribution of health resources overnight but we have begun to tackle the past distribution.

    But the inverse care law is not just about the distribution of resources. There are what we can call cultural issues involved where some are much more likely to have the information and the confidence to use that information than others. Any system which tries to limit information and fails to support people in using that information will inevitably be unequal.

    That is why our policy on choice in the area of elective surgery for instance will also further our aim of equity. At the moment, there are real problems of equity of access to current health services. For example, in cardiac care there is evidence of inequitable access in the past to treatment in both diagnosis and operations. Studies of cardiac care have shown that deprived patients appeared to wait longer for surgery and were less likely to be rated urgent.

    Doctors, nurses and administrators do not deliberately deliver health care in a discriminatory way. They work with patients and provide them with care to the very best of their ability and with the resources at their disposal.

    However, whilst the existing system is set up to provide a fair chance for everyone, we know that there is room for the patient to intervene and ‘work’ the system. People with more information, confidence and general knowledge of public services are in a better position that others. The existing system, in fact, distributes access unequally.

    There is considerable evidence of differential access to other elective surgery. There are, for example, lower levels of treatment rates for hips, gallstones and hernias for lower socio-economic groups relative to need. There are further differentials according to poorer socio-economic group between consultation rates with GPs and hospital treatment rates for cataracts and tonsillectomies.

    If we believe in the value of fairness in the NHS then we need to do something about this.

    Some people can work the existing system better than others. Information, confidence and support are differentially distributed. The existing system tries to exclude this, but in a modern society this is just not possible. The history of command and control systems demonstrates that no system can ever tell people what to do with sufficient force to stop people finding their way through it. All over the world that has been tried and failed. We cannot tell people what to do and where to go. It does not work. And it does not work equitably.

    If we are a Government committed to equality of access then what we must do is try and tackle this.

    We must start by equalising the information at people’s disposal. We are putting more and more information about NHS health services into the public domain. The British Heart Foundation makes information available to patients, and some local cardiac centres, for example Liverpool, publish their own local information for patients. Only two years ago this information was known only if you were part of a small circle of people and it was kept secret from most patients.

    Every single piece of public information open to all increases the possible power of patients. But it is our job to make sure this is known and used by everyone, and not just the chosen few.

    When in doubt about whether patients want this information and choice, ask the patient!

    Over the last year, we have been carrying out a number of pilots for patients’ choice in surgery. These have been instructive. From July 2002, all patients who had been waiting longer than six months for heart operations have been offered the choice to go somewhere else if they want. Some 2,896 patients – around 50% of those offered the choice to move to another hospital – have chosen to do so. Since October 2002, patients in London have been offered a choice for cataract surgery. And from this summer, all patients in London waiting more than 6 months for any form of elective surgery have been offered choice of an alternative hospital. To date, 7,180 London patients have chosen to have faster surgery in an alternative hospital – over 70% of those offered this choice.

    Let’s be clear what we have done to date and why we have done it. Everybody within a certain clinical category, at a certain time of waiting, and in a certain part of the country gets this choice. Not those with money. Not those that are friends of doctors. Everybody. Everybody gets the same chance through this sort of choice – the same information and, crucially, the same support to help make these choices.

    This choice for people has not only improved their experience of the NHS, but it has also increased the use of capacity within the system. If a patient is ‘stuck’ on a single waiting list there is likely to be a hospital somewhere else that can treat them a lot earlier. By bringing all waiting lists together to provide people with choice, you increase the utilisation of the whole system. In London, in the past it was the case that some people waited for a cataract operation for 8 months and some were waiting for 8 weeks. By giving people the choice to move, you make much better use of the capacity and also encourage those hospitals that are operating well to do even more work.

    Next year we will roll out this choice at six months across the country.

    But even this is not enough. By the end of 2005, choice at the point of referral will be there for everybody, for all elective operations. By that stage we will be able to offer at least 4 different choices for people to make. Each hospital on offer will be backed by detailed information, which will be on hand in the GP’s surgery. Whilst this information will be in the public domain in general – it is when this information goes hand in hand with the GP’s real support that it will provide all patients with the same starting point.

    From the point of view of equity I want to explain what this will mean. It will mean that the information base will be open to everybody. It will mean that the GP will be on hand to assist everyone to use that information. It will mean that people will be able to make decisions that fit into their own lives and their own calendars. Not just those who know a hospital consultant – but everybody for every referral.

    That’s why our approaches to increasing choice and increasing equity go hand in hand. We can only improve equity by equalising the information and the capacity to choose. And we can only provide those choices when we have increased the capacity of the NHS.

    I know some believe that providing everyone with choice automatically biases the system against those who are socially disadvantaged and will lead to inequity. There are two problems with that position. First, as I’ve said, the existing system of not providing everyone with choice has not created equity.

    They are wrong for a second reason. Working people, poorer people, people who have disadvantages in their lives are quite capable of making difficult choices. Living the lives that they lead, they make very difficult choices every day.

    – Trying to make the most of a small income.

    – Coping with a world where English is not your main language.

    – Trying to tussle through a bureaucratic maze to get your rights.

    These are everyday activities for disadvantaged people and they need great capacity to survive and thrive. Such people – if given the information and the support of their GP – will be able to make choices for their health and their health service. And anyone that denies this is simply patronising people.

    So we start from a position that recognises a painful truth. 55 years of a ‘uniform service’ has not created equality of access. If we believe in greater equality of access we need to empower not just the few but the many. To do this we need to put the information and support in the hands of every patient and encourage them to take a greater say in where they have their treatment.

    The Government this week has been accused of being “ideologically timid”. But the course I have outlined is not for the fainthearted. This is not a hunker in the bunker policy. It is a real challenge to those who mistake the structures of the NHS for its values. If we were not addressing the issue of equity then thinktanks could rightly claim we had “lost our way”. But we have not.

    It is by developing choice and capacity in the NHS that Labour will increase equity in health in his country. If we were timid or had lost our way we would not – painfully at times – be reforming the NHS. But this would be the ultimate betrayal of modern working families since a failure to reform the NHS would soon be rightly seen as a failure to defend the NHS.

  • John Reid – 2003 Speech to NHS Chief Executives

    Below is the speech made by the then Secretary of State for Health, John Reid, to the NHS Chief Executives Conference on 3rd February 2003.

    You are the leadership of the NHS. And coming as you do from both a clinical and a managerial background the fact that you are the NHS leadership demonstrates how vital it is for nurses, doctors and managers to work together. And I would like to thank you for your leadership.

    Last September, in my first speech to you, I argued for the importance of values for the NHS. Values matter, not because they make us feel good about ourselves, but because they are awkward, difficult, bloody minded guides to action. They stand judgementally outside of our practice and argue with us to do better.

    The other thing about values, is they don’t go away, They are not just for Christmas. If you believe in them they last for a long time and they go on arguing with and improving your practice.

    The more we believe in these values; the more the values argue for reform to bring them about. And as I hope you notice, I believe in them strongly. So meeting the challenge of holding strong values argues for policies and practice of strong reforms. That is what my speech today is about.

    Lets look at where we are – the work you all do. The main value we are working towards is equity of access to health services free at the point of delivery. That value cannot be met when some people were waiting 18 months for their operations. The target for inpatient waiting times that you met last April, hopefully the targets you meet this April and will meet next year are all about equalising access to hospital treatment. The same is true of the 48 hour access to GPs. Without access there can be no equity of treatment. That’s why our first priority as a government has been to respond to patient demand and grow the treatment capacity of the NHS at an unprecedented rate.

    Delivery now and in the future has and will come about because of massive investment plus reform. This is now beginning to deliver real improvement and with the new contracts for all our staff and the growth of new capacity there will be more. With this new capacity the NHS is beginning to produce real results.  We continue to see an increase in elective admissions for patients into hospital and a large growth in procedures in outpatients and primary care. Taken together they show that on current trends about 400,000 more people than last year will have elective procedures. And both the NHS and independent sector Treatment Centres are playing their part in delivering additional capacity. Waiting times – the publics number one priority – are coming down. This is important because it improves equity of access.

    But this is not enough. In December we published Building on the Best, which demonstrated how we need to personalise our NHS.

    In the past the NHS has believed that uniformity of provision would create equity. To create that uniformity, decisions would be taken away from the individual patients and carried out by a centralised system. Sameness however, did not created equity.

    And that is why in Building on the Best we have been so careful to ensure that equity remains a goal for choice. People will get support and information in making those choices including interpretation for black and minority ethnic patients.

    Choice can and should be a part of our journey to greater and greater equity of access. As the Long Term Medical Alliance says

    “Choice is often seen as a prime example of inequity in health care. LMCA  believes it is possible to use choice as a lever to improve equity, but only if this has been made a specific objective”

    So, just as increased delivery was aimed at meeting the value of equity of access so to is our second policy aim of personalising the NHS. Equity and personalisation go hand in hand.

    But this is not enough. The NHS needs to, along with the rest of government and the rest of society, work with all the members of the public in helping them to improve their own and their families health. It is obviously in the interests of the NHS that people look after their health. The better the public improve their own health, the more the NHS will achieve. The NHS needs to play an increasing role in that process too.

    This too is about equity. One of the first facts I heard when I became SofS has truly shocked me. The fact that a boy born in Manchester lives ten years less than a boy born is Dorset is a disgrace and is palpably unequal. Of course that’s not just a matter for the NHS, but all of us, health service, government, and above all society itself should not let that situation continue.

    How will combining these three themes work for an issue  that you are looking at this afternoon – chronic disease management. There are 17.5 million people suffering from a chronic disease in England. We could just try to manage chronic diseases through increased capacity of our present system . Whilst this would provide us with a full range of different healthcare options, it does not fully engage the patient.

    Look at what the NHS could do as we develop our more personalised approach to health services, which gives the patient an opportunity to self manage and navigate their own way through the different ways of getting help with their chronic diseases. This will not just create a better experience for the patient but will improve medical outcomes.

    But we need to go further to develop an integrated prevention strategy as well. A genuine set of preventative health improvement measures would play a direct role in chronic disease management. It would reduce the numbers of people at risk, and mean fewer complications for people who already have the disease. The core business of the NHS draws us towards the wider agenda of the health of the public. We will mainly do this because it is the right thing to do, but it is also the case that – as Derek Wanless pointed out – the task of the NHS is less difficult if the public are engaged in their health.

    As a part of this process of developing our core business I want to endorse the conversation that you will be having with Nigel and Trevor Philips later on about leadership and race equality. For decades now people have been extolling other people to do more about race equality and far too little has actually happened. I want to explain why today is different. If you look at these three building blocks of our core business, we can’t do any of them without creating more opportunities for different black and minority ethnic groups.

    Look at delivery. Go into any part of the NHS and our staff our capacity to deliver anything at all, is as diverse as the nation. If we don’t make sure there is more internal race equality for those staff, we will not deliver.

    Look at personalisation. The need for personalising the health service is a medical one. Peoples bodies and needs are different. We need systems that treat them differently, and one of the main themes of difference is ethnicity. People live different lives and as such they need a different approach. Without greater race equality we can’t deliver a service that is personal to everyone.

    Look at improving the health of the public. The public we have is the public we serve. It is their health we have to help improve not some public in the image of the late1940s. In 2004 our public is wonderfully diverse, if we are going to engage them in improving their health, then we have to engage them all in their diversity. Without greater race equality we cannot do that.

    From here on in we cannot do our core business without it – and to signal that, in the near future Trevor Philips and I will be publishing a pamphlet making out that case.

    On the wider front of the health of the public, I am announcing today a very broad consultation leading to a new White Paper on the next stages of action to improve  the health of the public. I am making this announcement to you as the leaders of the NHS because you will be key in both developing and implementing this policy.

    However, and I want to stress this, the prime responsibility for improving the health of the public does not rest with the NHS nor with the Government, but with the public themselves.

    Indeed, the public recognises this. We are seeing a huge upsurge of interest in improving people’s health and wellbeing. It dominates pages in the Press everyday – and not just for the New Year resolution season. Our newspapers, magazines, television programmes are full of material about how to be fitter, healthier, and happier. We are seeing debates across whole cities about how to develop approaches to transport, to smoking, to housing, to find what works best for local communities. Only last week we saw the results of a survey about who should take responsibility for our children’s diet and the problems of obesity and ill health.  Individuals, organisations, communities are all looking at how to make things better. It is this drive for improvement coming from the people themselves that must be the core of our work.

    If people and their communities are the core to the development of the health of the public, does that mean that the Government should do nothing? Just as it is wrong to see the health of the public as solely a matter for the Government, so it is wrong to say that Government has no role. The consultation process we will be going through over the next few months will develop policies and practices for all different levels of Government. But we need a clearer understanding of what that role and its limitations should be.  Is it, as some suggest, the Government’s role to make rules and regulations? To ban things? Should the Government simply try to stop people doing what they enjoy? I can’t speak for every one of my colleagues but that was not what drove me to become a Secretary of State.

    But the Government must provide clear information, we must play our role in helping more people have the opportunity to make healthy choices. We must also be prepared to take action to protect the vulnerable in society – particularly children.

    These are issues that we need to debate seriously and in a grown up fashion. We all have a stake in getting this right. None of us wants to see our children or grandchildren growing up to be less healthy than we have been.

    We know what the big challenges to health are. In the White Paper Our Healthier Nation, we identified the big killer diseases, the scandals of inequalities, the “healthy behaviours” that we all know would make a difference, the continued need to work with people to tackle Beveridge’s giants of want, idleness, ignorance, disease, squalor, so as to create the circumstances in which individuals and communities can thrive.

    And many strands of action have begun. Local initiatives in neighbourhoods, communities, councils, healthy living centres, National initiatives, like smoking cessation clinics, the school fruit scheme.

    We have made excellent progress on reducing premature deaths from CHD by 20% and cancer by 10% since 1997. Also, the 10% fall in under 18 conception rates since 1998 is a very encouraging sign. But the focus on some of the challenges needs to sharpen. For example, obesity levels are rising at an alarming rate. They have trebled since the 1980s, are responsible for more than 9,000 premature deaths a year in England, and are linked to both CHD and cancer. The cost of obesity to the NHS is an estimated £1/2 billion per year.  Most alarmingly, over a third of children are now overweight or obese and we are now seeing increasing case of Type II diabetes in children.

    There has been a lot of sometimes, noisy debate about who should do this or that, to make the difference. We will be posing a wide range of questions to start off this consultation.

    Who should take prime responsibility for obesity in the nation’s children?

    What assistance should Government give to parents in tackling obesity?

    What contribution might schools, the food industry, retailers, advertisers, or others have to make?

    How far is it the business of Government to regulate the advertising of food and drink?

    Or, to take a different challenge,

    How does society as a whole take seriously the issue of increasing mental well being?

    What role could employers play in improving the health of our nation?

    And in the same way we need now to debate how best to support and promote improvement in health. As Michael Barber and Nick Macpherson might put it to you this afternoon, have we got our “delivery strategy” right yet?

    A good example is our Smoking Cessation Services. We have a comprehensive network of Stop Smoking Services at PCT level, backed by an investment of £138 million over 3 years.

    Since 2000, over 300, 000 have set a quit date and were still not smoking 4 weeks after with the help of the service. Many of those helped will have quit for good.

    We know that the Services do work and that they are very cost effective, but at present they are serving a very small proportion of smokers.

    On the one hand, we have this great demand with the vast majority of smokers wanting to quit, and on the other a NHS wide Service that is waiting to assist them.

    So, the challenge for us is to encourage more smokers to go through the door of their local Service, and in parallel, to ensure that the Services which are provided actually meet their needs.

    So now is the time, with Derek Wanless soon to report, to move on to a focused debate about what will help make the most improvements to the health of the public, individuals and communities over the next 5 years; and what are the most important actions for the longer term. This debate must generate some real momentum for social action, in response to the huge individual and public appetite for progress.

    Returning to you specifically as leaders of the NHS. The NHS this summer will start to plan for the next 3 years, the time is right to move upstream and put the same effort and energy into improving health itself, working with all those who have a contribution to make.

    Let me restate my position. I firmly believe that the government should take a lead in addressing these issues. But I also believe that no government or doctor can make a person healthy.

    Ultimately, that responsibility has to lie with the individual. Only they can make the choice to healthy lives, to change their lives for the benefit of themselves and their families. I need to be personal here. After 40 years I chose to give up smoking because at this stage of my life there were personal reasons that gave me the will to do it. I was helped by chewing gum. I was certainly informed by all the science which linked cigarettes and cancer. Lots of things helped me to do this. But no one could have made me do it.

    The role of government is to help its citizens to make those choices, by creating a supportive environment in and by helping them to stop smoking, improve their diets and take more exercise.

    This may sound relatively straightforward, but in reality it is a massive undertaking and I do not think we – the government – have the answers yet.

    It is clear from the current debates on public health that we all have a stake in the future of our health and the health of our children. Real progress will depend upon the concerted efforts of the NHS and other public bodies, local government industry, the media and the voluntary sector. Above all it will depend on working with peoples own desires to lead better healthier lives.

  • John Reid – 2001 Speech at the Belfast Telegraph Awards

    Below is the text of the speech made by John Reid in Belfast on 4th April 2001.

    I am delighted to be here tonight to celebrate the very best of business in Northern Ireland.

    We are here to celebrate your achievements. In different ways all of you are pushing forward the boundaries of what is possible. Exploring new avenues, forging new partnerships.

    And we are here because we share a vision. All of us are actively seeking to build a new Northern Ireland:

    – a new political landscape, based on equality, mutual respect and lasting peace

    – and an economy based on innovation, enterprise and investment.

    And everywhere there is evidence that peace pays:

    – unemployment continues to fall – unemployment in Northern Ireland now stands at 5.9% – well below the EU average of 8.1%.

    – investment in manufacturing is up 75% over the last 5 years (compared to a UK average of 16%).

    – overseas investment is pouring in. Last November Fujitsu announced that they were setting up a £29.4 million engineering centre in Belfast. This will create 400 jobs for skilled engineers over the next 4 years.

    – new domestic investment has been just as impressive, with £564m invested in the last 4 financial years.

    There has never been a better time to do business in Northern Ireland. But you don’t need me to tell you that we cannot rest on our laurels.

    The world is changing. The coming years will bring advances that our minds cannot even conceive of today. They will bring new political alignments in Europe and further afield.

    But these rich promises come with a warning: as the globe shrinks, as the communications revolution permeates even the remotest areas, we will have to fight harder not to be left behind.

    Because business is changing.

    E-commerce and e-business are radically changing the nature of individual businesses and indeed entire economies around the world.

    Northern Ireland has made a good start. It is at the leading edge of the design and development of communications hardware and software for a worldwide market.

    There is an advanced and reliable telecommunications network that ensures fast Internet access. An environment that encourages and rewards innovation through support for research and development in knowledge-led areas.

    And the educational infrastructure is in place: university research centres of excellence, working alongside industry. A supply of quality IT and electronics graduates, post-graduates and experienced personnel. And there is already a significant cluster of internationally successful IT companies.

    But business will only get faster, competition fiercer. And Northern Ireland simply cannot afford to be left behind.

    Thousands of new jobs could be created in Northern Ireland over the next five years and hundreds of thousands of existing jobs sustained if we immediately grasp the exciting opportunities presented by the Information Age.

    It presents us with a simple choice: we can do what we’ve always done and lose out. Or we can transform the economic landscape, with the simple tool of human intelligence.

    Education is the single most important weapon in our fight to promote innovation, excellence and inclusion.

    In this new world it will be knowledge that divides the haves and the have-nots. So, above all else, we must equip our younger generations to lead the line in technological advances.

    We must build a society, a political culture and the sort of progressive, innovative economy that makes young people want to stay here in Northern Ireland.

    For too long we have had a political culture of ‘name and blame’ rather than one that seeks collective solutions.

    For too long, too many young people have felt that their talents are wasted here, that their lives are less than they might be elsewhere. They are the forgotten casualties of past conflict.

    For too long the images that have gone round the world associated with Northern Ireland have been those of conflict and there are still those like the bombers who placed the device outside the BBC in London who are determined to condemn Northern Ireland in the eyes of the world. Every television bulletin that carried those pictures was one less potential job for Northern Ireland.

    That is the perception that we must reverse. That is why we all – Governments, political parties and people – must accept our responsibilities as well as our rights under the Good Friday Agreement.

    Opportunity for all, matched by responsibility from all.

    That is our duty to the next generation.

    The political progress of recent years has helped to stem that haemorrhage. But we must do more: we must attract the Northern Ireland diaspora back from Silicon Valley and from the Boston corridor.

    We must build centres of excellence of our own.

    Northern Ireland has a talented, motivated, educated young population. They are crying out for the chance to fulfil their potential where their homes are and where their families live.

    Already that outward migration has been reversed. For the first time in our history, more people are streaming back than are leaving our shores. But I want to turn that stream into a tide.

    That should be our promise to the next generation.

    They – and the world – will not understand if we choose to cripple ourselves in parochial disputes, to channel our potential into destruction, not creativity.

    We will only survive if we command respect, not inspire sympathy.

    The last century in Ireland was one of almost continual political conflict. A century of devastating, futile violence. Of wasted lives.

    This must be a Century of opportunities seized, not squandered.

    Tonight I can tell you: this Government will not shy away from change – social, political or economic. In partnership with business we can take this new world by the scruff of the neck. We can shape it and make it work for us.

    And we can look our younger generation in the eye and say: there need never be refugees from Northern Ireland again.

  • Rachel Reeves – 2013 Speech to the Resolution Foundation

    Below is the text of the speech made by the Shadow Chief Secretary to the Treasury, Rachel Reeves, to the Resolution Foundation on 4th September 2013.

    Thank you so much for having me today.

    The Resolution Foundation has been rightly recognised for its role in placing the pressures faced by ordinary working households at the centre of political debate.

    And it’s a great credit to the work of Gavin and his team that the next general election will be about living standards.

    Let me start by saying it’s welcome that we are now finally seeing growth again in our economy – growth that is essential to making up the ground we have lost over three wasted years during which the economy stagnated as a result of the Tory-led Government’s mistakes.

    David Cameron and George Osborne would like us to think that our troubles are over, good times are here again.

    But most families know that this complacency is misplaced.

    Not just a few families on the lowest incomes – but many who thought they were doing alright, yet now find themselves struggling.

    They know that things are getting harder, not easier.

    They feel the effects of real falls in wages that are down an average £1,500 since David Cameron became Prime Minister, and are taking the hit from tax rises and cuts to benefits and tax credits.

    They can see that prices continue to race ahead of their pay.

    They worry about the prospects for their children when almost one million young people are out of work.

    It’s an economy that no longer seems to offer the promise of a better life for the next generation.

    And it’s an economy that, for far too many people, seems only to offer work that is insecure, poorly paid, and in the worst cases simply exploitative.

    Just this week, on my first official day back from maternity leave, I visited a family in Thurrock who told me what they were up against.

    The father, once a partner in a thriving small business, lost his livelihood during the recession three years ago.

    Desperately trying to keep up their mortgage repayments, he has spent the past three years taking whatever work he could get through employment agencies, often on zero hour contracts.

    And only recently has he found a permanent job as a driver that, topped up with evening shifts doing deliveries, gives them a bit more security but falls far short of making full use of his talents and experience.

    His wife abandoned her dream of training to be a primary school teacher so she could hold onto her relatively secure, but modestly paid, job in retail.

    Their daughter is studying for university and should do well, but worries about the fees.

    All of them pointed to a gaping and growing disconnect between their rates of pay and the costs they faced – for travel, housing, and other basic necessities.

    They all, it was clear to me, had so much to contribute to our recovery and to our country – but weren’t being given a fair chance to play their part.

    This family’s experience is all too illustrative.

    There are now more than one in ten people who want to work more hours, but can’t get the extra shifts.

    At the same time there are 700,000 people working more than one job – more often out of desperation than choice.

    One million people are thought to be on zero hours contracts.

    And today we learn in this incredibly important report from the Resolution Foundation, a surge in the number of people paid less than a Living Wage – up from 3.4 million in 2009 to 4.8 million today.

    The report provides worrying evidence that the problem of low pay – which we know is not a new problem in the British economy – is becoming exacerbated and entrenched under this Government.

    Indeed, figures provided for me by the House of Commons library show that almost 60 per cent of new jobs created since the Spring of 2010 have been in low paid sectors of the economy.

    This contrasts with the record of the last Labour Government under which such jobs made up around 25 per cent of new jobs between 1997 and 2010.

    Why does this matter?

    First and foremost, for moral reasons. We simply can’t be satisfied with a situation where an honest day’s work does not bring a decent day’s pay.

    It’s about parents who want to spend more time with their family and children, but hardly see them because they have to take on a second job.

    It’s about a young worker who wants to go to evening classes to improve their chance of progression, but instead has to take a shift in the pub on the side to make ends meet.

    It’s about the women who are cleaning the offices of a building like this while most of us are just getting out of bed, and when we are on our way home are still at work, perhaps on the supermarket tills.

    It just isn’t right that these people – real strivers, putting in the hours and doing the right thing for themselves and their families – are, in Ed Miliband’s phrase, “working for their poverty”.

    Too many people not making the most of their skills and talents is a missed opportunity for Britain.

    And as Shadow Chief Secretary to the Treasury, this issue is of huge fiscal importance too. Research from the Resolution Foundation and IPPR shows that if everyone was paid a living wage or above, then the Treasury would gain £3.6billion a year.

    And all of these problems – falling or stagnating living standards for the majority; widespread insecurity, underemployment and low pay, are interrelated aspects of an economy that isn’t working for ordinary families.

    For three years, we have had weak demand, high unemployment and underinvestment , which is doing damage to Britain’s competitiveness and productivity.

    And instead of doing whatever it takes to support Britain’s families, this government has focused on the fortunes of those at the top, hoping prosperity trickles down.

    Average wages have been falling behind prices for 37 out of 38 months of David Cameron’s Premiership.

    Which month is the odd one out?

    April of this year – when the bankers reaped the rewards of deferring their bonus until George Osborne’s decision to cut the top rate of tax was implemented.

    Meanwhile not one firm has successfully been prosecuted for non-payment of the National Minimum Wage over the past two years

    This government are on the side of the wrong people.

    The difference with Labour is clear.

    Ed Miliband has argued that we need to rebuild Britain as a One Nation economy where everyone plays their part, and everyone has a stake.

    Ed Balls and I have continued to press the case for action to secure the recovery and create the sustainable growth that will be essential to raising living standards at the same time as getting the deficit down.

    We have urged the government to boost capital investment now in areas such as housebuilding, as the IMF has recommended, and a compulsory jobs guarantee for young people and the long-term unemployed.

    We have also been clear that, while the next government will face tough choices on public spending and taxation, Labour would find a fairer way to get the deficit down.

    We wouldn’t be cutting income tax or increasing pension tax relief for the very wealthiest while cutting tax credits for hard pressed families, and we will seek to reintroduce a 10p starting rate of tax funded by a mansion tax on properties worth more than £2 million.

    A Labour government would also tackle vested interests to ensure that every part of the private sector plays its part in easing the squeeze on ordinary families.

    That includes proposals already set out for ending rip-off rail fares, getting the energy market working properly, standing up for tenants in the private rented sector, curbing pay day lenders, and reforming the pensions industry so it works for ordinary savers.

    And we have made clear that tackling insecurity and exploitation in the labour market is central to this agenda.

    Ed Miliband has set out how a Labour government would prevent exploitation of agency workers through loopholes in the rules, and prevent the use of migrant workers to undermine pay and conditions.

    But my main topic for today is Labour’s agenda for tackling low pay.

    Confronting low pay is part of the very DNA of the Labour movement.

    Our party was born of the self-organisation of workers in the nineteenth century who fought for a share of the fruits of the industrial revolution.

    It was Sidney and Beatrice Webb who made the argument that the livelihood of ordinary people could not be left to market forces alone, but that a “doctrine of the living wage” must be applied.

    But it was not until 1998 that we finally implemented a policy that we know would have featured on Keir Hardie’s own preferred pledge card, a National Minimum Wage

    – a legacy that sits alongside the creation of the NHS as one of Labour’s greatest achievements.

    It raised the pay of millions, reduced income inequality and helped to narrow the gender pay gap – all the while flouting the predictions of doomsayers – not least in the Conservative Party – that it would stifle business investment and create unemployment.

    So I am pleased that Sir George Bain, the founding chair of the Low Pay Commission and someone who says his back still bears the scars of its original introduction, is leading the Resolution Foundation’s work on how best to build on this achievement.

    The success of the National Minimum Wage depends critically on government coming together with representatives of both employers and employees to find consensus and work jointly towards a shared goal.

    In that sense, its success and durability provides evidence of the effectiveness of the One Nation approach that Ed Miliband has espoused.

    But a One Nation economy also has to be built from the bottom up.

    The living wage movement exemplifies this spirit.

    The work of community organisers like London Citizens and Citizens UK has been central to this – building relationships through dialogue, and involving and empowering ordinary workers.

    The success of their campaign has demonstrated that there are people on all sides willing to play their part in tackling low pay.

    First and foremost we can be proud that the best of British business has always sought to do the best it can by even its lowest paid workers.

    In 1851 Titus Salt, the highly successful textiles manufacturer in Bradford, was so appalled by the pollution in his home town that he built Salt’s Mill – purposefully built to minimise noise pollution with houses for his employees, schools, hospitals, libraries and a bath house.

    Joseph Rowntree appointed a welfare worker in 1891, introduced sick funds in 1902, and a pension scheme in 1906. He also built four hundred homes for his employees with educational facilities attached.

    These and so many other pioneering industrialists were philanthropic characters but wily businessmen too. They understood the importance of fairness in the workplace, to encourage workers, build morale and team work.

    And the same insights are well appreciated by the best employers today – including those in sectors such as care, cleaning and retail where rates of pay have traditionally been the lowest.

    For example, the British Retail Consortium has highlighted the efforts that many of its members put into improving job quality and providing good opportunities for training and progression.

    And the British Cleaning Council, which brings together employers and expert bodies from across the contract cleaning industry, has been vocal in its support for a living wage.

    Now we all know that paying the living wage is a big ask for many businesses, especially in sectors such as these. Many employers say they would love to do it if they could but face formidable challenges.

    And yet progress is being made. Not only have we seen the commitment by the large financial services companies who were the early targets of living wage campaigns.

    Intercontinental has now become the first hotel group to pay the London living wage, with Whitbread, the UK’s largest hotel and restaurant group, have said they want to move towards it.

    And the Joseph Rowntree Foundation has been taking forward the traditions of their founder by paying the living wage in the four care homes it runs in the north of England.

    This progress should encourage us to think that, whatever the challenges, there need be no “no go” areas for the living wage.

    In many cases employers have found ways of improving wage rates for lower paid staff by working with trade unions.

    Of course a significant feature of low paid segments of the British labour market is often low levels of union membership. But again there are areas where we can point to progress.

    The innovative methods of recruitment and organisation developed by unions – like Unite in the hospitality sector, USDAW in retail, or UNISON and GMB in the care sector, are helping build momentum and commitment to modernise business models and invest in lower paid staff.

    And at the heart of this, of course, are the workers themselves, who gain so much more than a boost to their pay – valuable though that is – when they take part in, or lead, campaigns to win a hearing, and discussions with employers to secure the living wage for themselves and their colleagues.

    As well as employers and employees, and their representatives, we are seeing an increasingly pivotal part played in this movement by shareholders.

    ShareAction have been mobilising UK and international investors and pension funds to encourage the adoption of living wage standards by FTSE 100 companies since 2011.

    In the future one of the most critical roles will be played by consumers, who thanks to these campaigns are becoming increasingly aware of the issues affecting workers who provide the goods or services they enjoy.

    The brilliant work of the Living Wage Foundation in encouraging and helping employers to win formal accreditation is already moving us towards a time when the Living Wage kitemark could function in a way similar to the Fair Trade badge – encouraging and enabling ethical choices.

    But I haven’t provided this overview so that we can sit back and wish them all well, satisfied that government need do no more.

    On the contrary – for me, the progress and the potential we can already see is an invitation and an imperative for government to get involved, play its part, do whatever it can.

    That’s why it’s such a point of pride that, even while in opposition at Westminster, the Labour Party is playing its part.

    Across the country, Labour councils have been leading the way in signing up to the living wage – even amid unprecedented cuts to their budgets.

    15 Labour Local authorities, from Lewisham to Preston; Norwich to Cardiff; Oxford to Selby; have now been accredited by the Living Wage Foundation, and dozens more have made commitment to pay the living wage.

    And many councils have used their procurement powers to extend the living wage into the private sector. Islington Council, for example, has now built a living wage requirement into 97% of its contracts.

    And Labour councils have acted as champions and leaders for the living wage across their local economies – promoting its benefits to local businesses and encouraging collective commitments to make progress as Birmingham City Council is creating with its Birmingham Business Charter for Social Responsibility.

    Ed Miliband wants Labour to learn from this experience so we can build on this work in government.

    It means learning from what Labour councils have done in the area of procurement to see how central government could further extend the requirement to pay the living wage through public sector supply chains, as well as requiring greater transparency from employers on the numbers of their staff paid less than a living wage.

    And one of the most exciting ideas is that of “living wage zones”. Local employers coming together to pay the Living Wage, in exchange for government sharing some of the tax credit and other savings that it makes from the higher wage being paid.

    This could be through time-limited cash rebates, or funding for the costs of training or new equipment that would mean firms can move to the higher wage business models that mean a living wage makes business sense.

    Or it could be through support provided locally – involving for example councils, LEPS, education and training providers, and local chambers of commerce – for businesses looking to develop their staff or invest in training to enable productivity-enhancing work reorganisation.

    This is an idea that perfectly exemplifies a One Nation Labour approach to tackling low pay.

    It means employers, employees, communities, local authorities and others working together to improve pay and strengthen businesses.

    But it is also based on government recognising the fiscal, economic and social benefits of higher quality, better paid jobs and higher productivity businesses too.

    There remain questions and challenges over how this could be put into practice.

    So I am delighted to be able to announce that Alan Buckle, Deputy Chairman of KPMG international, has agreed to lead a consultation with employers to better understand the barriers that they face in improving pay and prospects for their staff, and the way in which government can best encourage and enable them to do so.

    KPMG was one of the first major UK employers to commit to paying all staff a living wage in 2006 and has since been a key advocate of the idea in alliance with the Living Wage Foundation. So I am really pleased that Alan is leading this work for us.

    This is just one example and illustration of Labour’s approach to tackling low pay, and getting this economy working for everyone:

    – from Ed Balls’ work with Sir George Cox on overcoming short-termism and raising levels of business investment,

    – or Larry Summers on the economic reforms needed to more fairly share prosperity;

    – through Stephen Twigg’s work with Chris Husbands on revolutionising our skills system;

    – to Chuka Umunna and Andrew Adonis’s work with small enterprises and key growth sectors;

    – working together with stakeholders and social partners to build a One Nation economy that brings benefit to all.

    Underpinning and driving all of this work is a determination to reverse the squeeze on living standards we have seen and build a fairer and more inclusive economy.

    This is the goal upon which government’s sights should be focused – and it should be reflected in the measures by which we judge our success.

    Every quarter we pore over the GDP data – rightly so, because growth is the precondition for raising living standards for the majority.

    But as Gavin and his team have argued, while growth may be a necessary condition, it is not sufficient for raising living standards for all.

    And an exclusive focus on GDP can blind us to what is happening to ordinary families, and the divisions and inequalities in our economy.

    Unlike GDP, data on median household income and on how the bottom quarter and decile is faring, is published only annually, and with a lag of more than a year.

    This was a point raised by the LSE Growth Commission earlier this year, which argued that:

    “Prosperity is strengthened when everyone has the capacity to participate effectively in the economy and the benefits of growth are widely shared”

    and recommended:

    “reforming the way we measure and monitor changes in material wellbeing and its distribution, including regularly publishing median household income alongside the latest data on GDP.”

    And I know the Resolution Foundation are planning to carry out some preparatory work on this, looking at whether this can be done from the existing data.

    This simple change could have a powerful and profound effect, informing public debate and focusing policymaking – putting pressure on government to find ways of ensuring that we are growing in a way that benefits ordinary households and leaves no one behind.

    So I will be writing to Andrew Dilnot, the Head of the Statistics Authority, to ask if he will look at the feasibility of preparing statistics on real household incomes – the median and wider distribution – more frequently and promptly so that we can better monitor them alongside the GDP numbers.

    In conclusion, let me return to my starting point.

    The cost of living is a real problem for too many families and the economy is not working for the majority of working people.

    Deep problems in the way our economy has been developing – or, more accurately, not developing – over the past few years are resulting in stagnant real wages and increasing insecurity for the majority, and persistent low pay and outright exploitation for far too many.

    Fixing these problems is in everyone’s interest – essential both to relieving immediate financial pressures, and securing a better future for our country.

    None of this is on the current Government’s agenda.

    It is central to Labour’s.

    We have begun to set out policies to tackle the squeeze on living standards, the spread of insecurity, and, my particular focus today, low pay.

    It’s an approach based upon bottom up solutions – but where government does not shy from playing its part.

    It’s an approach in which the mutual benefits of solving these problems are recognised and shared – but where we are ready to challenge those who are not upholding their own responsibilities.

    It’s an approach where we join together and work together to build an economy that allows us to grow and prosper together, as One Nation.

    We have already begun the journey – and I am very excited about where it could take us.

    The next election will be a living standards election. Thank you.

  • Rachel Reeves – 2012 Speech to Labour Party Conference

    Below is the text of the speech made by Rachel Reeves, the Shadow Chief Secretary to the Treasury, to the Labour Party conference on 2nd October 2012.

    When Ed Miliband calls for an economy that works for working people, some people ask what that means in practical terms.

    Well now we’re going to talk about a very concrete example: the campaign for a Living Wage – that’s been built by trade unions, community groups, our own Labour Students who have been fighting for it alongside staff in universities in colleges, and increasingly taken up by far-sighted employers – gives us a great example of the kind of change we want to see and the kind of difference it can make to people’s lives.

    The argument for a living wage is moral and economic.

    It’s based on the belief that work should bring the dignity of a decent wage – enough to keep a family out of poverty and debt.

    And as we’ll hear this morning, it can mean stronger business models, based on better skilled, better motivated, more productive employees.

    Those employers that have implemented the policy, including an increasing number in the private sector, report that the extra money put into the pockets of their employees is more than made up for by the savings they make as a result of improved recruitment and retention and the benefits to their business of the boost it gives to staff morale and engagement.

    But if that’s what we really believe, then we should be looking to put it into practice wherever we can.

    That’s why Ed Miliband and I wanted to do whatever we could to support those Labour councils who wanted to make this commitment to their employees and communities.

    It’s a bold ambition, and a very big ask for councils who have are bearing the brunt of budget cuts and unprecedented pressure on services, resulting from the recession, rising deprivation, and an ageing population.

    You might be forgiven for thinking that a Living Wage was a nice idea for another day, but not a practical proposition at a time like this.

    But you’d be wrong.

    Earlier this year, Labour councils in Lewisham and Islington became the first accredited Living Wage authorities in the country.

    And today, it gives me immense pride to announce that, thanks to the commitment and creativity of Labour councillors, as well as the work of trade unions like UNISON, the GMB and Unite, and community organisations like Citizens UK and the Living Wage Foundation, the following councils are now on their way to becoming accredited Living Wage Employers:

    Camden;

    Birmingham;

    Preston;

    Oxford;

    Lambeth;

    Southwark;

    Hounslow;

    And Cardiff.

    In total, around the country, we can now point to over 12 Labour councils, from Glasgow to Hackney, showing that a fairer economy isn’t just a noble idea, it’s something we can start building right here, right now.

    Even in opposition, even in times as tough as these.

    And I know of many other councils up and down the country who are now looking at whether this is something they can deliver.

    So to tell us a bit more about how it can be done, I’m delighted to be able to introduce:

    Fran Massey, a UNISON member who works at Manchester College;

    Steve Bullock, Mayor of Lewisham, the first council to become an accredited Living Wage employer;

    And Alan Buckle, Deputy Chairman of KPMG International, one of the first private sector employers to take up the call for the Living Wage.

  • Rachel Reeves – 2012 Speech to the Resolution Foundation

    Below is the text of the speech made by Rachel Reeves, the Shadow Chief Secretary to the Treasury, to the Resolution Foundation Conference on 28th June 2012.

    How a Labour government would raise living standards for those on low to middle incomes in the decade ahead

    I want to thank the Resolution Foundation for inviting me here today, and to thank Gavin and his brilliant team for all the work they have been doing to put the issue of living standards for low and middle income families so firmly on the political agenda.

    When Ed Miliband first started talking about the “squeezed middle”, many in the political and media establishment professed confusion. But it didn’t take long before the phrase began to appear in newspaper headlines, with the Oxford English Dictionary pronouncing Ed’s coinage their new “word of the year” in 2011.

    Why has this phrase gained such currency in such a short space of time? It’s because household incomes and living standards are under pressure in a way that is historically unprecedented and this is being felt particularly sharply by those around the middle and bottom half of the income distribution.

    As a constituency MP, and in my role as Shadow Chief Secretary, I see the way this slow, remorseless squeeze is wearing people down.

    Ed Miliband has called it “a quiet crisis that is unfolding, day-by-day, in kitchens and living rooms in every town, village and city up and down this country”.

    It’s the worry about keeping up with the rent or the mortgage, or keeping on top of bills or credit card debt, or the worry that you won’t be able to properly provide for your children.

    This doesn’t just put strain on people’s self respect and immediate relationships. It is corrosive of a broader sense of social solidarity and shared responsibility, especially when people hear of other groups in society who seem to be able to rise above it all, untouched by the tough times the majority are living through.

    This is why Ed Miliband has dedicated the Labour Party to the task of building a different kind of economy for Britain: an economy that works for everyone, not just a few at the top.

    As we’ve just seen some of the trends have been in evidence for as much as thirty years.

    The deep causes of the cost of living crisis are complex, but the key factors include a hollowing out or polarisation of the labour market, driven by a combination of technological and institutional change, and the operation of increasingly globalised market forces reducing the availability of reasonably paid, semi-skilled manual or clerical work and leaving too many workers trapped in low-skilled, low-paid, often casualised segments of the labour market.

    Coming on top of these trends, the global financial crisis and recession have taken a heavy toll on the earnings and employment rates of British workers.

    We can debate where the responsibility for that crisis lay and I certainly think it’s right that we in the Labour Party take our share for failing to challenge the fashion for “light touch” regulation that other countries (and parties) espoused. But there’s also no doubt that Labour did much in government to protect hard-pressed families from its harshest effects.

    The tragedy we are seeing today is that the legacy of that crisis, and the long running trends I have touched on are being compounded and exacerbated by the mistakes and the choices of the Conservative-led government.

    Families with children are, on average £450 a year worse off as a result of last year’s VAT rise and, according to the Institute for Fiscal Studies, another £511 worse off this year because of further cuts, freezes and restrictions to benefits and tax credits.

    But this morning I want to highlight something that is arguably even more important:

    the effect the government’s decisions are having on the state of the economy and what that means for people on low and middle incomes – now and for the future.

    As Ed Balls warned, and has now been confirmed, abandoning the balanced plan for deficit reduction that the Labour government had put in place, by raising taxes and cutting spending too far and too fast, has choked off the recovery and taken the economy back into recession.

    The unemployment figures tell one part of the story, but in many ways understate the full effect of the economy’s weakened state on people’s living standards.

    For one thing, the headline figures for employment and unemployment conceal deeper weaknesses in the labour market. Analysis of the data reveals a growth in part time and temporary work, with the latest figures showing 600,000 people who want permanent positions but can’t get them, and 1.4 million working part time who want to be working full time.

    And for those who are in full time work, and indeed, for many who work extremely long hours, sometimes with two or more jobs, the blunt reality is that the wages they earn are not nearly enough to cover the costs of a decent standard of living.

    Unemployment, underemployment, and stagnant or falling wages are weighing heavily on the incomes of most households today.

    Indeed, new analysis that I commissioned from the House of Commons Library shows that the deterioration of the economic outlook since George Osborne’s Spending Review in November 2010 has led the Office of Budget Responsibility to revise down projections for real household disposable income:

    – by £800 per household last year;

    – £1,100 per household this year;

    – £1,700 next year;

    – and another £1,800 and £1,700 for 2014 and 2015.

    That’s the real disposable income of the average UK household £1,700 lower in 2015 than the Chancellor expected when he first set out his plans, and a permanent loss to households over the life of this parliament of £7,100.

    Economic weakness and the double dip recession are taking a heavy toll on living standards. Even these figures are based on the OBR’s March forecasts that don’t fully reflect the depth of the double dip recession that we have now entered.

    And the truth is – every month our economy stagnates, every month of lost growth is another hit to the incomes and living standards of ordinary households not just now but for years into the future.

    The longer this goes on, the harder it will be to turn the situation around. The Conservative MP Nick Boles gave a thoughtful speech earlier this year, the argument of which I’m sure he’ll develop when he comes to the Resolution Foundation next month, in which he pointed out that the key to sustainable wage growth for British workers is rising productivity for the hours they work.

    Critical to this is investment in new technologies and innovative work processes. As he said then:

    “without a sustained increase in business investment, Britain can kiss goodbye to any increase in labour productivity”.

    He is right on this.

    But today, confidence in our economy is so low, businesses are holding back investment, and banks are cautious about lending to firms. The OBR’s projections for the Chancellor’s hoped for renaissance in business investment has been repeatedly postponed and pushed back and the recent worsening of the economic outlook is likely to have set back prospects even further.

    An 8 per cent increase in investment was promised for 2011, but it actually fell by 2 per cent. A further 10 per cent increase had been projected for this year, but less than 1 per cent growth is now forecast. And the role of investment in driving growth for future years has been significantly written down.

    Every investment delayed or deferred is a permanent setback to the ability of UK plc to raise productivity and raise competitiveness in the years ahead.

    There is also compelling evidence that the economic slowdown and recession are eroding the productivity and future earnings potential of the UK workforce.

    There are now worrying signs that investment in skills is under pressure. With the latest data from the UK Commission for Employment and Skills showing that the proportion of employers providing no training for their staff jumped from 32 per cent in 2009 to 41 per cent in 2011.

    And the “scarring” effects of joblessness translate directly into lower lifetime earnings and living standards. Analysis undertaken for the ACEVO Commission on Youth Unemployment chaired by David Miliband showed that people who experience unemployment in their younger years are not only more likely to suffer spells of unemployment in later life but also, even in work, suffer an average wage penalty of more than 15%.

    So the 407,000 young women now unemployed will, a decade from now, be earning on average £1,700 a year less as a result of being unemployed today. And the 607,000 young men now unemployed will, on average, be earning £3,300 less.

    These effects worsen the longer someone is unemployed. Work by Paul Gregg at the University of Bath and Emma Tominey at the University of York suggest that the 264,000 young people who have now been out of work for more than a year are, on average, likely to spend another two years either unemployed or economically inactive between the ages of 28 and 33, and the men will, by age 42, be suffering a wage penalty of more than £7,000.

    So it’s pretty clear that the first thing we need to do to improve the living standards of these people over the next decade, and beyond is to get them into work as a matter of urgency.

    So the economic slowdown and recession this government’s policies have resulted in doesn’t just create extra costs and hardship today it’s also doing permanent damage to our productive capacity and long term growth potential.

    Because the longer businesses postpone investment, losing their edge in competitive global markets; and the longer people are unemployed or underemployed, missing opportunities to gain experience or develop new skills, the less productive and competitive our economy will be in future and the lower our trend rate of growth making it even harder to maintain or improve incomes and living standards.

    So George Osborne’s years of lost growth mean lost opportunities to improve our ability to pay our way in the world that we will never recover. Britain’s businesses, working families and young people will be paying the price of this government’s economic errors for years and decades to come. And the longer we go on like this, the heavier that price will be.

    As the failure of the government’s economic plan becomes clear with the years of austerity and uncertainty stretching on into the future and no sign of light at the end of the tunnel people are asking if we just have to accept all this or if there is an alternative.

    And that poses a real challenge to Labour. We need to show that there is much more that could be done by an active government that is in touch with what life is like for ordinary people and determined to find a fair way through the tough times we are living through.

    There are three broad areas I want to highlight where government could be doing more:

    – first, urgent action to get our economy out of recession

    – second, a fairer approach to deficit reduction

    – and third, long term reform and rebalancing of our economy.

    First: an absolute precondition for real improvement in living standards for most families is economic growth. It’s right, as the Resolution Foundation, has stressed, that growth is not sufficient but no one can be in any doubt that it is necessary.

    That’s why we have been urging the government to take action to restore business and consumer confidence, stimulate investment, and tackle the crisis of joblessness and underemployment which, as we’ve seen, will extract a heavy and rising toll on living standards in Britain for decades to come as well as making it harder to get the deficit down and our public finances onto a sustainable path.

    Second, as Ed Miliband and Ed Balls have both stressed: although we need a growing economy to deliver the rising tax revenues and falling unemployment that will help us get the deficit down, tough decisions on tax, spending and pay cannot be avoided.

    When money is tight, our values and priorities matter all the more and we have been clear that a Labour government would be asking those who can to bear a heavier burden which would allow us to do more to protect the living standards of those on low and modest incomes.

    For example: We have said we would repeat the tax on large bank bonuses, to fund a major youth jobs programme. We would hold back pay rises for public servants on the highest salaries, so we can guarantee increases for those on the lowest pay. And we would crack down on tax avoidance, and reverse tax give-aways to the richest one per cent of the population, so that we can better protect those who are most feeling the squeeze by, for example, reversing the withdrawal of Working Tax Credit from couples with children unable to meet the government’s new higher working hours threshold to make work pay and support working families.

    Defending the tax credit system from the government’s onslaught is important, because if you listen to the Tories, you might get the impression that the tax credits were a costly and complex folly.

    But you get a very different picture if you listen to independent, objective observers such as Professor Lane Kenworthy, an international expert on income trends who cites tax credits as the key reason that the UK’s record on low- to-middle incomes has been better than most comparable countries in recent years; or Jane Waldfogel of Columbia University, who has held up Labour’s anti-poverty drive as an example for other countries to learn from.

    There are also areas of spending where the impact on employment, earnings, and by that token, economic growth and the public finances can be even more directly demonstrated.

    As part of Labour’s new commission on childcare I am working with Stephen Twigg, Yvette Cooper, and Liam Byrne to look at how we can build on the successes of Sure Start and childcare to get more help to parents who want to work, which the Resolution Foundation has identified as a critical frontier in the drive to defend household incomes.

    And with Liz Kendall I am looking at how we can deliver the radical reform of social care funding we need – so that people can look forward to a dignified life in old age, without fear of spiralling costs or a funding lottery – but also because, as I know from my work as Shadow Pensions minister, and from my own family, improving the availability and affordability of good care services could be a huge help for those who struggle to remain in work when they find themselves first in line to look after older family members.

    Finally, tax credits and support for families have been critical to reducing poverty and rewarding work over recent years. But a Labour government could achieve far greater leverage over social and economic outcomes at much lower cost to the taxpayer if it found ways of addressing what Jacob Hacker has called the “predistribution” of income and opportunity: rebalancing and restructuring our economy to improve the availability of good jobs paying a decent wage as well as regulating and reforming markets to contain the costs that families face.

    That way we don’t have to just rely on redistributing the proceeds of growth to compensate for the outcome of market forces but also look to tackle these dynamics at source with structural reforms that get our economy working in a way that benefits everyone, not just a few at the top.

    This is an enormous challenge, but it is opening up exciting new frontiers for policy development.

    For example, a bold government ready to challenge powerful providers could do much to cut the cost of living that families face:

    – ensuring energy providers offer cheaper and fairer tariffs;

    – preventing rail companies from exploiting loopholes in fare regulation;

    – improving the availability of affordable housing, for first time buyers but also in the rental sector; and

    – empowering savers and regulators to root out excessive fees charged by banks and pension providers.

    We must also do everything we can to improve opportunities for workers.

    So as well as giving businesses the confidence to invest, we need an active government strategy to encourage investment in high value sectors and high quality jobs.

    I am working with Ed Balls and Chuka Umunna to identify the levers we could use: from a more strategic use of government procurement powers to promote apprenticeships and incentivise innovation; to examining the role that a British Investment Bank could play in increasing the flow of finance into productivity-raising infrastructure, or small businesses with high growth potential.

    But raising living standards isn’t just about the high productivity traded sectors such as high tech manufacturing or business services. It’s also about raising standards and investment in high employment sectors like retail or social care.

    In the German retail sector, for example, 8 in 10 employees have completed vocational qualifications lasting two-to-three years, and are therefore more likely to progress to managerial careers. In the UK only three in ten have comparable qualifications.

    Also in Germany, care workers are trained to a level comparable to that of general nurses, whereas in the UK only one-third of care workers and two thirds of senior care workers hold NVQ level 2 qualifications.

    It may be neither feasible nor desirable to recreate the semi-skilled, routine jobs that have been displaced by technology or trade. But we must make it our mission to turn the lower-status, low-paid jobs that for too many have taken their place into jobs that properly valued, better paid, and offer a real chance of career progression and personal development.

    Finally we need to take steps to ensure that the proceeds of rising productivity are broadly shared. The work of the Resolution Foundation shows that we can’t take it for granted that the gains will trickle down and that productivity and pay can and have been decoupled for large parts of the workforce if wages aren’t set in a way that is responsible, accountable, and equitable.

    The fact that one in four British workers are paid less than the living wage and workers at the median have seen their wages stagnate or fall has as much to do with their power as their productivity.

    The public sector can take a lead in this, setting an example for the rest of the economy.

    As Shadow Chief Secretary, I will be pressing the government to follow through on Will Hutton’s recommendations for monitoring and managing high pay in the public sector; including the publication of ratios between top, middle and bottom pay in every department.

    And I am working with Ed Miliband to encourage and support more Labour councils to become living wage employers and use their procurement power to promote the same standard among their private contractors.

    Lewisham and Islington councils have already become accredited Living Wage employers and we hope that more will soon be able to join them.

    A Labour government could also build on the success of the National Minimum Wage by introducing stronger checks on excessive remuneration at the top, such as binding shareholder votes and employee representation on remuneration committees; and looking at how we can bring greater transparency, and a stronger voice for employees to bear at every level of the pay scale.

    But we know we have a long way to go, and we know we don’t yet have all the answers. That’s why the work of the Resolution Foundation, and its Commission on Living Standards, is so valuable.

    What’s most important at this stage is that we shift the parameters of political debate so that that the challenges facing households on low-to-middle incomes are at the forefront of politicians’ and policymakers minds.

    Since I entered politics, I have often been struck by how skewed our public conversation can be, and how people doing ordinary jobs for modest incomes are bound to feel ignored when we talk so much about university education, but so little about those who never get to university. When restricting child benefit for higher rate taxpayers creates more of a media storm than cutting tax credits for millions of workers paid below the average. And even when fairness and inequality is the issue, there’s far more moral concern about how much companies are paying their top executives than whether they doing enough to improve pay for those at the middle or the bottom of the scale.

    The Resolution Foundation is beginning to change this. And it’s for the Labour Party to take up the cause. The greatest danger of all is of people losing hope and giving up on the idea that any government can do anything to make things better.

    Labour’s job is to give people reason to believe again that we are in touch with their lives, in tune with their hopes and fears, and relentlessly focussed on doing everything we can, from the moment we win power and even from opposition, to get immediate relief to hard-pressed households now facing unprecedented challenges and put the economy on the path to a fairer future.

  • John Redwood – 2007 Speech to the Bruges Group

    The below speech was made by John Redwood at a fringe meeting during the Conservative Party Conference in October 2007.

    The constitutional treaty is part of a process to try and create a United Federal States of Europe. Indeed, it would not be that federal because there would be an enormous amount of central power coming from the Brussels machine. We as democrats object to it because the power is not properly democratically accountable. It is exercised mainly by unelected senior executives (who on the continent are regarded as if they were elected politicians), the Commissioners, and of course a lot of it is done through the process of the court itself, constantly driving decisions in favour of more and more federal power.

    Ladies and gentlemen, this is a mighty cause that we must unite to fight. This is a vital cause if we want to keep our democracy in Britain, or if we want to recapture parts of our democracy that have already been lost, needlessly frittered away by an insouciant government that tells us one thing and does another.

    This is a mighty test of British democracy itself. It goes to the very heart of the breaking of the bond of trust between a main political party and the people who elected it. The government promised and the government has failed to deliver. It goes to the very issue of whether you can believe politicians and political parties in general when you have so many senior politicians in this country seeking to tell you the fanciful, that this is not the constitution, that this is a very watered down version of the constitution, that there is nothing serious going on, that you will be able to carry on governing your own country in the usual democratic way after all these powers have been surrendered.

    This is a government which is now dicing with the most important powers of the state of all. It is playing nonchalantly with the right of parliament and government in this country to decide if and when our forces should be committed to battle, what our foreign policy stance should be on the major problem areas of the world, how people should be charged with serious criminal offences and how they should be treated if they are found guilty of those criminal offences.

    These are the very essence of state power. We here don’t think those powers have always been well used and sensibly used by this government, but what we want is to continue to live in a system where we can challenge the way the government of the day makes decisions over war and peace and criminal justice and foreign affairs, and where we are in the right to persuade the British people and come to power to do something differently.

    What we wish to avoid is the British people ending up in a position where, because they don’t trust their politicians enough, and because some of their politicians so badly mislead them, we end up with those vital decisions taken way away from these shores by people we cannot elect, and more importantly, by people we cannot drum out of office when they do the wrong thing.

    The one power that all parliamentarians seriously fear is the power of the British electorate to dismiss us when we get it wrong and when we misbehave and when we let you down.

    I am a democrat to my core. I believe in that power. I believe I should be accountable to all my electors, and on national issues to the wider nation. I want that power the people have over their elected representatives to be strengthened, and I want the power my elected representatives have over the laws and the administration of this country also to be strengthened so the accountability can mean something. The more the power is transferred to the unelected and the unaccountable, the more people will scorn and despise government, the more that bond of trust will be irreparably broken, the more your democracy will be taken away from you.

    Ladies and gentlemen, it is vital we unite and fight. It is vital we use any general election forthcoming to make this one of the big issues of the day. It is vital we do not miss our opportunity. We fought them and won to save our pound. Now we need to fight them and win to save our country.

  • Nick Ramsay – 2008 Speech on Local Government in Wales

    Below is the text of a speech made by Nick Ramsay on 29th January 2008. The speech is in Welsh and English below.

    IN ENGLISH:

    I am pleased to be able contribute to this important debate. Today, we have reached the end of the long road that we have travelled over recent months, during which we have had many debates and discussions, not only on the local government settlement, but on the other aspects of funding that various services will receive in this year and coming years. During that debate, we have thrashed out many reasons why we felt that local government should receive a much higher share of the budget.

    I thank the Minister for involving me in meetings and in the Chamber in his thinking about where we were going. I am also pleased that he consulted the WLGA, but I do not think that he has taken on board my concerns or those of the WLGA, which only recently described the Assembly’s final budget as ‘tinkering at the edges’.

    We welcome the extra funding and the fact that Conwy, Powys and similar authorities will not receive as low an increase in their revenue settlement grant as they were initially going to receive. However, let us be frank; it was unbelievable that Powys and Conwy ever faced increases of 1 per cent.

    The rise to 2 per cent for those authorities is a marked increase, but it is still far short of what they will need to provide statutory services and to meet the responsibilities placed upon them.

    We are looking at an RSG increase of 2.4 per cent. I hear what the Minister says about that being 3.3 per cent if you include all of the other elements. However, you know as well as I do that the key figure is the RSG, and it has not increased in line with inflation as it should have.

    Listening to the Minister, I am reminded of what the Minister for Finance and Public Service Delivery said in last week’s debate about what local government is receiving being equitable, given the overall amount from Westminster and given what authorities across the border are receiving. I take issue with both of those assertions.

    The fact remains that the Assembly budget has almost doubled over the past decade, while the increase on the local government side is far smaller. I do not think that he has provided an answer to that. As for the argument that our local authorities receive far better funding than authorities over the border, I can provide him with a list of 10 authorities across the border that receive more per head of population. Therefore, I look forward to the Minister answering some of those points.

    Look at what local authorities are being expected to deliver: provisions in the Childcare Act 2006 and the Climate Change and Sustainable Energy Act 2006, rights of way improvement plans, and flood defences. Local authorities must deal with these issues over the coming years, but the money is not being provided to enable them to do that.

    Yes, more money has been made available, and I am not going to be a total killjoy; we are pleased about that and the fact that local authorities are not going to receive the dismal settlement originally proposed. Let us be realistic, and let us listen to the WLGA.

    On your point about council tax, we welcome, as does the council tax payer I am sure, the fact that we will not see huge increases, as was first feared. However, if you are going to cap council tax increases you must accept that it is almost like a deadly game of dominoes, because the need for capping is as the result of the settlement that you gave to local authorities in the first place.

    Let us make no bones about that. I have probably been incorrect when I said during the last few debates on this issue that local authorities in Wales will have to choose between how much they give to local services, and what they do with council tax. It is clear to me now that you are saying to local authorities that the axe will have to fall squarely on local services. I cannot see how that can be avoided if you are telling authorities that they can only spend a certain amount, and no more.

    Let us be realistic about this. Yes, we can bandy figures about, and it is interesting to see in the finance report the amount that the Assembly Government has given to support local authorities that are carrying heavy amounts of debt. Such measures are necessary up to a point, but let us make sure that the replacement for the performance incentive grant, the new improvement agreement grant, delivers not only what the performance incentive grant delivered, but more support for efficient councils, and that it rewards efficient councils rather than inefficient ones.

     

    IN WELSH:

    Yr wyf yn falch o allu cyfrannu at y ddadl bwysig hon. Heddiw, yr ydym wedi cyrraedd pen y ffordd hir yr ydym wedi teithio ar ei hyd yn y misoedd diweddar, gan gael sawl dadl a thrafodaeth, nid yn unig ar y setliad i lywodraeth leol, ond ar agweddau eraill y cyllid y bydd amryfal wasanaethau’n ei gael yn y flwyddyn hon a blynyddoedd i ddod.

    Yn ystod y ddadl honno, yr ydym wedi gwyntyllu sawl rheswm pam y teimlem y dylai llywodraeth leol gael cyfran lawer uwch o’r gyllideb.

    Diolchaf i’r Gweinidog am fy nghynnwys mewn cyfarfodydd ac yn y Siambr yn ei feddyliau ynghylch i ble’r oeddem yn mynd. Yr wyf yn falch hefyd ei fod wedi ymgynghori â Chymdeithas Llywodraeth Leol Cymru, ond nid wyf yn meddwl ei fod wedi derbyn fy mhryderon na phryderon y Gymdeithas, a ddisgrifiodd gyllideb derfynol y Cynulliad yn ddiweddar fel ‘chwarae o gwmpas ar yr ymylon’.

    Croesawn y cyllid ychwanegol a’r ffaith na fydd Conwy, Powys ac awdurdodau tebyg yn cael cynnydd mor isel yn eu grant cynnal refeniw ag yr oeddent yn mynd i’w gael yn wreiddiol. Fodd bynnag, gadewch inni siarad yn blaen; yr oedd yn anhygoel fod Powys a Chonwy’n wynebu cynnydd o 1 y cant. Mae’r codiad i 2 y cant i’r awdurdodau hynny’n gynnydd sylweddol, ond mae’n dal ymhell oddi wrth yr hyn y bydd arnynt ei angen i ddarparu gwasanaethau statudol ac i gyflawni’r cyfrifoldebau a osodwyd arnynt.

    Yr ydym yn edrych ar gynnydd o 2.4 y cant yn y grant cynnal y dreth. Clywaf yr hyn a ddywed y Gweinidog sef bod hynny’n 3.3 y cant os cynhwyswch yr holl elfennau eraill. Fodd bynnag, gwyddoch gystal â mi mai’r grant cynnal y dreth yw’r ffigur allweddol, ac nid yw hwnnw wedi cynyddu’n unol â chwyddiant fel y dylasai.

    O wrando ar y Gweinidog, caf fy atgoffa o’r hyn a ddywedodd y Gweinidog dros Gyllid a Chyflenwi Gwasanaethau Cyhoeddus yn nadl yr wythnos diwethaf, sef bod yr hyn y mae llywodraeth leol yn ei gael yn deg, ac ystyried y swm cyffredinol a ddaw o San Steffan ac a chofio’r hyn y mae awdurdodau dros y ffin yn ei gael. Byddwn yn dadlau gyda’r ddau haeriad yna.

    Mae’r ffaith yn aros fod cyllideb y Cynulliad bron wedi dyblu dros y degawd diwethaf, tra mae’r cynnydd i lywodraeth leol yn llai o lawer. Nid wyf yn meddwl ei fod wedi rhoi ateb i hynny. O ran y ddadl bod ein hawdurdodau lleol ni’n cael cyllid llawer gwell nag awdurdodau dros y ffin, gallaf roi rhestr o 10 awdurdod iddo dros y ffin sy’n cael mwy fesul pen o’r boblogaeth. Felly, edrychaf ymlaen at gael ateb gan y Gweinidog ar rai o’r pwyntiau hynny.

    Edrychwch ar yr hyn y disgwylir i awdurdodau lleol ei gyflenwi: darpariaethau yn Neddf Gofal Plant 2006 a Deddf Newid yn yr Hinsawdd ac Ynni Cynaliadwy 2006, cynlluniau gwella hawliau tramwy, a mesurau amddiffyn rhag llifogydd. Rhaid i awdurdodau lleol ddelio â’r materion hyn yn y blynyddoedd a ddaw, ond nid yw’r arian yn cael ei ddarparu i’w galluogi i wneud hynny.

    Oes, mae mwy o arian ar gael, ac nid wyf am fod yn surbwch llwyr; yr ydym yn hapus ynghylch hynny a’r ffaith nad yw awdurdodau lleol yn mynd i gael y setliad symol a gynigiwyd yn wreiddiol. Gadewch inni fod yn realistig, a gadewch inni wrando ar Gymdeithas Llywodraeth Leol Cymru.

    Ynglyn â’ch pwynt am dreth gyngor, croesawn, fel y gwna’r trethdalwr mae’n siwr, y ffaith na welwn godiadau anferth, fel yr ofnwyd ar y dechrau. Fodd bynnag, os ydych yn mynd i osod cap ar godiadau treth gyngor rhaid ichi dderbyn ei fod bron fel gêm ddominos farwol, oherwydd mae’r angen i gapio’n ganlyniad i’r setliad a roesoch i awdurdodau lleol yn y lle cyntaf.

    Gadewch inni ddweud hynny heb flewyn ar dafod. Mae’n debyg y bûm i’n anghywir pan ddywedais yn ystod yr ychydig ddadleuon diwethaf ar y mater hwn y bydd yn rhaid i awdurdodau lleol yng Nghymru ddewis rhwng faint a roddant i wasanaethau lleol, a beth a wnânt gyda’r dreth gyngor.

    Mae’n amlwg i mi’n awr eich bod yn dweud wrth awdurdodau lleol y bydd yn rhaid i’r fwyell ddisgyn yn union ar wasanaethau lleol. Ni allaf weld sut y gellir osgoi hynny os ydych yn dweud wrth awdurdodau mai dim ond hyn a hyn y cânt ei wario, a dim mwy.

    Gadewch inni fod yn realistig ynglyn â hyn. Gallwn, gallwn daflu ffigurau o gwmpas, ac mae’n ddiddorol gweld yn yr adroddiad cyllid y swm y mae Llywodraeth y Cynulliad wedi’i roi i gefnogi awdurdodau lleol sy’n cario dyledion mawr.

    Mae mesurau o’r fath yn angenrheidiol i ryw raddau, ond gadewch inni wneud yn siwr y bydd y grant cytundeb gwella newydd, sy’n disodli’r grant cymell perfformiad, yn cyflawni nid yn unig yr hyn a gyflawnodd y grant cymell perfformiad, ond hefyd yn rhoi mwy o gefnogaeth i gynghorau effeithlon, ac yn gwobrwyo cynghorau effeithlon yn hytrach na rhai aneffeithlon.

  • James Purnell – 2008 Speech to Employers Conference

    jamespurnell

    Below is the text of the speech made by James Purnell, the then Work and Pensions Secretary, to the Employers Conference on 28th January 2008.

    It’s a pleasure to be here to give my first speech as Secretary of State for Work and Pensions. People keep on telling me there’s no such thing as a job for life any more. With four ministerial positions in less than three years, I’m starting to take that personally!

    In this job, you rarely get the opportunity to think reflectively about the nature of your task. It might seem strange therefore that I should offer any reflections at all when my period for reflection has been precisely four days.

    But, in truth, I’ve had welfare policy on the brain for a long time. So to be appointed as a Labour Secretary of State for Work and Pensions is a great privilege.

    My title is more than an honour. It also embodies an ideological break with the past. It is not all that long ago that my predecessor was called the Secretary of State for Social Security.

    What a telling name: security as something handed down; welfare as bureaucratic transfer; people as recipients of funds. The title said nothing about people’s actual lives and ambitions, nothing, in fact, about the best way of securing their welfare.

    The new title, Secretary of State for Work and Pensions, tells a wholly different story. It tells you that work is the best route to personal welfare and well-being : it tells you that if you work hard and contribute then you deserve your retirement to be free from anxiety about money.

    For a long time we lost sight of these common sense truths. If you’d ever said to William Beveridge that work could be divorced from welfare he would have been astonished. Yet, until this government put the two back together again, that was exactly the cul-de-sac we were in.

    For Beveridge, the very notion of welfare was bound up with the idea of independence. That was what was so depressing about the debate that ran, and in some quarters still runs, about welfare dependency.

    The welfare state was conceived as a way to support human flourishing. To foster independence, to give people the support they need, not so that they became dependent but precisely so that they would not.

    To foster that independence will be my main aim. I am fortunate that I inherit a radical policy framework from John Hutton and Peter Hain. I will accelerate those reforms and deepen their reach to build on what has been achieved over the last decade.

    Over those ten years, we’ve shown full employment is achievable on the old definition – those who want work have been able to find work.

    But getting people into work isn’t enough. People also want to get on. That’s why the Prime Minister has made clear we need to improve the skills of our workforce. And that’s where you come in.

    Thank you to all of you for your commitment. Your commitment to helping people into work. Your commitment to helping them raise their skills. Now, we need more employers to offer jobs to those out of work. To invest in apprenticeships. To boost our economy by giving everyone who can the chance to work.

    And as for people who can’t work, for them the maximum independence too – with more support, and control over the care that they receive. I want to work with Alan Johnson to expand the principle of individual budgets, so that people who can’t work still have the dignity of controlling the support that they get.

    Our goal is a welfare state that is a way out of worklessness and a way up the career ladder, but not a way of life.

    And that means tackling inactivity. Our goals are ambitious. 1 million people off incapacity benefit.  300,000 more single parents at work. 1 million more older workers.

    To get there, we will need major reform of inactive benefits.

    Incapacity Benefit is a test case. We do not think of people as incapable. We think of them as being perfectly capable, with the right support. That’s why IB will go, replaced by the Employment and Support Allowance with the emphasis on what a person with a physical or mental health condition can do rather than cannot do.

    The Employment and Support Allowance will recognise that some people face greater barriers to work. But for the rest, we will require them to look for work. We will start with new claimants and with existing claimants under 25.   But our ambition must be to help everyone in this group look for work, with special attention given to those who face problems of mental illness and alcohol or drug abuse.

    To that end, we will follow through on David Freud’s groundbreaking report on reforming the welfare system. That means using the best provider, whether they are from the private, public or voluntary sectors. I want to create an effective and growing market for these services – because we shouldn’t be ideological about who provides the service we should just work out who is best at providing it. I’m glad to announce that David has agreed to come back to advise the department on implementing his ideas.

    We also need to think hard and honestly about our policy for the socially excluded. We don’t fail for lack of spending. But the return on our efforts can be poor. This is where our radicalism is most needed.

    We need to rewrite the terms of the welfare contract. On one side: a decency floor to wage rates, making work pay through in-work benefits, tax credits, a credible ladder of opportunity from low paid jobs to higher skills and better pay.

    Dynamic market societies cause friction and change. A civilized welfare state makes the change as smooth as possible. And it gives societies confidence to welcome globalization rather than turn to protectionism.

    In return those who can work will be obliged to look for work or train for work and if they do not then they will face sanctions. There should be no free riding on the welfare state. It is an insult to people who have contributed.  And it is an insult to the people who deserve help.

    Of course cash transfers will remain part of a modern welfare state. But the Beveridge model lost its way when we began to think of welfare recipients as people who were done to by the state. We began to accept that maybe they needed our support in perpetuity. That mentality is the enemy of social justice and fair life chances for all.

    People who live independent lives tend to flourish. The economist would say they experience an increase in welfare. That is the idea of welfare that, as Secretary of State, I will seek to promote. Social justice through independence, not a socially regressive culture of dependency.

  • James Purnell – 2007 Speech to National Association of Pension Funds Conference

    jamespurnell

    Below is the text of the speech made by James Purnell, the then Minister of State for Pension Reform, to the National Association of Pension Funds conference on 16th January 2007.

    Thank you for giving me the opportunity to address your seminar here today.

    I’d like to start by thanking NAPF for all the advice you have given us in the months leading up to December’s White Paper. Not just because you endorsed many of our key proposals – although that was nice! – but because you put forward some important and helpful proposals that we were able to accept.

    The title of your seminar today begs the question have we got our Personal Account proposals right. We think we have. By giving millions of people an easy way to save, by providing clear incentives through employer contributions and, crucially, by reforming the state and private system to ensure it pays to save; we’re confident that the proposals in the White Paper will help millions more workers save.

    Without these reforms, most people would have been retiring on Pension Credit in 2050. Thanks to our reforms, that proportion will fall from over 75% to around 30%.

    Employees will see their savings matched pound for pound by a combination of contributions from their employer and the Government. Low charges, achieved through economies of scale, will mean that people will see the more of their money going directly into their pension pot rather than being lost in administration.

    This combination of policies will transform incentives to save. As the Pensions Policy Institute have made clear, that means that automatic enrolment into personal accounts will be possible.

    However, the PPI also said there should be good generic advice for those groups that should think about opting out of personal accounts.

    We’ve listened and yesterday, Ed Balls and I announced that work we’ve asked Otto Thoresen – Chief Executive of Aegon UK – to research and design a national generic financial advice service. Otto will be reporting by the end of the year and I am looking forward to developing this project to help meet the information needs of personal accounts.

    The central announcement in the December White Paper was the decision that the National Pension Saving Scheme model represented the best method for delivering personal accounts.

    We chose this model for two reasons: cost and simplicity.

    On cost, our evaluation found that the Commission’s model is likely to be significantly cheaper than the alternatives that were put forward. We are confident that we will be able to achieve the level of charges Turner set out, which could mean savers keeping up to 25% more of their pension pot.

    In your response to the White Paper the NAPF rightly identified that simplicity was going to be key. And for us, it was one of the main reasons for choosing the NPSS model. Under this model consumers will not be forced to make choices about who administers their fund. This is particularly important when you consider our target market will be moderate to low earners – a group who historically have had low levels of financial literacy.

    But our White Paper measures are not simply about the introduction of personal accounts. They are also about protecting and supporting good existing provision.

    Personal accounts are to be focused on a target market – those not currently making adequate provision and without access to a good workplace scehme. In the main, median and low earners, a significant proportion of whom are women. Personal accounts are designed to fill a gap in the existing market, not replace it.

    And we’ve taken measures to mitigate against any ‘mission creep’. There will be no transfers into or out of personal accounts from or to existing pension schemes. There will be an annual limit of the level of contirbutions an individual can put into their account. £10,000 in the first year – to allow individuals currently without access to a good quality occupational pension to save in non-pension products before 2012 and then to move them to personal accounts. We have proposed a limit of £5,000 for subsequent years and have asked for views as to whether this is the right level.

    Many employers today provide excellent occupational pension schemes – and we are determined that alongside the introduction of personal accounts, they should be supported in continuing to do so.

    So we’re taking forward a rolling deregulatory review with the aim of reducing the administration currently associated with occupational schemes. An advisory group has already been set up and last month we appointed two external reviewers – Ed Sweeney and Chris Lewin – to set the direction of the review.

    We know that we can also help by ensuring that the exemption process for high quality schemes is as simple and straightforward as possible – and so we are planning for it to be largely based on existing tests and self-certification.

    I know the NAPF and colleagues in the pensions industry have raised concerns about “levelling down” – fearing that the introduction of personal accounts will usher in a future in which a 3% employer contribution will be the norm for all schemes. So I’d like to make a few points on this issue.

    Firstly, we should not lose sight of the fact that employers are currently free to make no contribution at all if they wish. Indeed, nearly 9 million employees currently work for such an employer. From this perspective the minimum employer contribution could be considered as “levelling-up”, creating a floor below which no employer can fall. This minimum floor will also help those employers who provide a pension today, creating a more level playing field by ensuring that their domestic competitors are at least contributing 3 per cent.

    And secondly, we need to remember that a 3% minimum employer contribution, along with automatic enrolment and personal accounts, will mean that total contributions into pensions will increase significantly. We don’t think that levelling down is inevitable. But it’s worth noting that even in the worst case scenario modelled by the NAPF, in your research report published last month, pension saving would still increase overall. Your analysis shows that in 2012 total pensions contributions could increase by around 60%, from under £20 billion to over £30 billion.

    We think the reality may be more positive. Our research, conducted with over 2,500 private sector employers, about how they might respond to the reforms in 2012 suggested that levelling down would not have the dramatic effect that some are predicting.

    But we do take these concerns seriously. If levelling down is to be minimised, it is important that existing good provision is supported, and that employers continue to view offering a high quality pension as a way of attracting employees. So we welcome the proposals put forward by the NAPF to support existing provision, many of which we have also proposed in the White Paper – a simple exemption test, for example, and an objective for the personal accounts delivery authority around existing provision.

    And we agree with you that more needs to be done to help employees see the value of employer contributions. I was particularly interested in the NAPF’s proposal for a ’Good Workplace Pension‘ quality mark – so that employees can easily recognise a scheme that offers high quality pensions.

    The NAPF envisaged the quality mark would be awarded to employer’s schemes that offered total and employer contributions higher than personal accounts. And that all scheme members would be provided with information about the quality mark, thereby helping them better understand the value of the pension on offer.

    We’re keen to see this happen, although it is the responsibility of the pensions industry to develop further details and ultimately establish a quality mark. But I think this could be a very useful tool in encouraging employers to raise, rather than lower, their standards: The 3% minimum will provide one floor below which no employer can fall. But with a quality mark we would be aiming to set a second floor – a standard to which employers will want to rise.

    And this could be linked to another area we’re exploring: whether there should be waiting periods for companies that make these higher contributions.

    Personal Accounts are only one of a number of significant steps this government has taken in securing the long term future of work based pensions. The Pensions Act 2004 saw the creation of two new independent bodies, The Pensions Regulator and the Pensions Protection Fund.

    Personal accounts will also be an occupational pension, so it is important therefore that we consider how these institutions fit within the Government’s overall pensions policies. In the May White Paper, we therefore proposed an Institutional Review.

    The institutional review will consider how the functions of organisations involved in the regulation and protection of workplace pensions – such as the Pensions Regulator, the Pension Protection Fund and the FSA – fit with our new proposals.

    I’m very pleased to announce today that we have appointed an independent external reviewer to lead the Institutional Review – Paul Thornton. Paul has a wealth of experience in this field. He is currently a Managing Director of Gazelle Corporate Finance. And has previously been a President of Institute of Actuaries and a senior partner at Watson Wyatt.

    As with our White Paper proposals, in taking forward the review, we want to encourage debate amongst the stakeholders involved and build a consensus on the best way forward. Ensuring we have appropriate regulation and protection for all work based pensions – including personal accounts – means we need to think carefully about how the functions of the various institutions involved can best be arranged. The review will commence from today and report – with recommendations – to Ministers by Spring 2007.

    Advice on how to contribute to the Review is available from today on the DWP website.

    I’d like to conclude by thanking you for your positive engagement with us as we have developed the proposals in our White Paper and also make a plea for you to continue with this engagement as we refine and finalise our plans over the coming months. “Getting it right” – to borrow from the title of today’s event – and delivering a robust, enduring and comprehensive pension settlement is something in which we all have a vital interest.