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  • Lord Freud – 2011 Speech on Reforming Welfare

    lordfreud

    Below is the text of the speech made by Lord Freud in Edinburgh, Scotland, on 6th December 2011.

    My session this morning is on the welfare revolution.

    And it really is a revolution. There is an awful lot going on at the moment.

    The Work Programme is up and running, helping long term unemployed people find sustainable work.

    The Sickness Absence Review was published a couple of weeks ago and we are working hard on the Government’s response.

    Disabled people’s benefits are being reformed to make them fairer, more accurate and easier to tailor to individual need.

    But today, I don’t want to talk about any of that.

    Today, I want to focus on what’s at the heart of the welfare revolution – the Universal Credit – which we plan to introduce from October 2013.

    This is a new income replacement benefit that will support people both in and out of work.

    It will replace the complex array of benefits currently paid to people with little or no income with just one payment.

    It will be simpler to claim, easier to understand and administer and more effective and responsive than its predecessors.

    We are working on a real time information system that will mean we are able to find out how much people are earning and readjust their Universal Credit payment accordingly. This is better for people whose earnings fluctuate and will help to reduce fraud.

    Most importantly of all people will know what they are entitled to.

    We will withdraw Universal Credit at a steady rate as people start to earn more money.

    This means if someone takes a job or increases the hours they work they will be able to work out exactly how it will affect their benefits – and see for themselves that they will be better off in work.

    Today’s welfare system is a complicated mixture of benefits that have been added together, piled one on the other in a piecemeal way, as successive governments have sought to address different needs.

    It hasn’t been improved so much as extended and stretched beyond any relevance to its original intention.

    And what we’ve ended up with is unintended consequences, rules so complex that the civil servants administering them struggle to understand them and people trapped in welfare dependency are unable to find a way out of the system and get back on their feet.

    This is not what Beveridge intended.

    The introduction of Universal Credit will remove the rules and regulations that prevent people from getting back into work quickly.

    It will take the welfare state back to first principles.

    We want a welfare system that provides financial support for those unable to work – that goes without saying.

    But for those who can work we want a system that encourages a return to employment as quickly as possible.

    That’s how welfare support should work.

    But today’s system barely works at all.

    Let me take you through some of the vagaries of the current system.

    The current Jobseeker’s Allowance system means you need to work 16 hours or more to come off benefit and see a real increase in your income.

    However, for those remaining on benefit and working less than 16 hours, anything they earn over £5 if they are a single person, slightly more if they are a lone parent or disabled, will result in their benefit being reduced pound for pound.

    This means someone over 25 can’t work for even one full hour per week at minimum wage without seeing an instantaneous fall in benefits.

    If someone does find work for more than 16 hours per week but it is low paid they may be entitled to tax credits.

    But they’d need to end their benefit claim and submit a new claim for tax credits.

    The benefits system and the tax credit system don’t interact with each other.

    So people trying to leave benefits find their benefit income stops instantly but there can be a long wait before tax credit payments start.

    This gap in household income can be catastrophic for family finances.

    It encourages people either to retreat back into the benefits system or worse, never try to leave.

    Universal Credit deals with this issue.

    The tax credit and benefit systems are brought together so there’s no need to move between different systems.

    When someone does take a job the Universal Credit payment is tapered off at a steady rate so there’s no sudden loss of benefits.

    There’s no catastrophic drop of income.

    And there’s no 16 hour cliff edge, the Universal Credit will relate to the actual amount someone earns not disappear at an arbitrary number of hours.

    The 16 hour rule has also had an impact on childcare support.

    Under the old rules working parents could not claim help with registered childcare unless they worked more than 16 hours per week.

    For lone parents in particular this made it particularly difficult to start to move into work.

    Universal Credit deals with this issue.

    We want to remove these barriers so parents can begin a gradual return to work.

    Therefore, under Universal Credit, support for the costs of childcare will be available to all lone parents and couples, where both members are in work, regardless of the number of hours they work.

    It will mean that for the first time around 80,000 extra families will be eligible to receive support through childcare.

    Similarly, the rigidity of the present system makes any form of flexible working, whilst reliant on state support virtually impossible.

    The current system is too clunky and slow to respond to changes in hours and incomes.

    This means unemployed people have been unable to take work unless the employer can guarantee a minimum number of hours.

    This rules out large numbers of agency jobs or casual work. It has made our unemployed population less flexible than the migrant workers who are filling those vacancies.

    It is part of the reason why the number of people on out of work benefits remains around the five million mark.

    Universal Credit deals with this issue.

    Payments will be based on real time earnings.

    So, people can work varying hours and still be confident of a minimum level of income.

    The current system infantilises people.

    It takes budgeting powers away from people by paying their rent and some of their bills for them.

    Benefits are paid weekly or fortnightly, whilst most employees receive a monthly salary.

    Benefits are paid to individuals where as most families manage their budget as a household.

    This means the whole experience of claiming benefits has become completely removed from the experience of receiving a wage.

    This encourages dependency because people literally do not know how they will cope without the support of the state.

    Under Universal Credit the default position will be a single, monthly, household payment, wherever possible.

    This means benefit claimants will have to manage their own finances – their full finances – so when they do find work it’s easier to leave the safety of the welfare system.

    We will provide budgeting support for those who need it. This is a real opportunity to really change people’s lives by giving them the tools they need to take control of their finances.

    That’s what the welfare revolution is all about – that’s the final goal – to bring an end to long-term benefit dependency and begin a cultural transformation.

    Now I do have one more thing I want to talk to you about today – Support for Mortgage Interest payments.

    These are payments made towards the interest on benefit claimants’ eligible home loans.

    We think these payments should only be short term, to help people out when they fall upon hard times, so they don’t lose their homes.

    The current system of SMI payments does not encourage people to get on top of their own finances.

    It is also not sustainable. Even with today’s low interest rates it costs government £400million a year.

    We want to recover some of the SMI money so we can reinvest it in helping more people.

    For new claimants we are looking at options for recouping that money either when a house is sold or by levying a charge on the property for long term claims.

    Today we have published a call for evidence seeking views on a number of options for retrieving some of these funds. We are also reviewing other aspects of our help for home owners.

    The call for evidence closes in February next year and we are keen to hear your views.

    All I have done today is mention a few small areas where our welfare reforms are going to change things for the better.

    And these examples are replicated again and again as we bring coherence to a system that has been inadequate for too long.

    But these reforms aren’t about designing a nice, sensible system.

    They are about people.

    They are about freeing people to get back into work.

    Our welfare reforms are about transforming lives.

    And that’s why they are worthy of the term welfare revolution.

  • Lord Freud – 2011 Speech on Entry Level Employment

    lordfreud

    Below is the text of the speech made by Lord Freud in London on 5th July 2011.

    The stark message from today’s report is that we simply have too many unskilled people, not enough intermediate skilled people, and increasingly need very highly skilled people.

    For a country coming out of recession this is a wake up call.

    We are seeing slow and steady recovery, and the type and range of skills we will need to maintain growth is changing.

    But this is not just about having skills for their own sake.

    We know that people who leave school with no qualifications are over three times more likely to be out of work than people with a degree.

    And there are wider benefits to having skilled people in work.

    Some researchers estimate that a one percentage point reduction in the proportion of working age people with no qualifications would provide a net social benefit of between £32 and £87 million from reduced property crime in Britain.

    But, as this report makes clear, skills training must be related to the reality of employment.

    I was disturbed to read the findings of Professor Alison Wolf’s study into vocational qualifications published just a few months ago.

    She found that among 16 and 17 year olds between a quarter and a third are in, or moving in and out of, vocational provision which offers no clear progression into employment.

    We’ve developed vocational training that does not lead to a vocation.

    We are teaching skills that are neither use nor ornament whilst at the same time employers are crying out for better skilled candidates.

    This is madness.

    We must ensure the skills system is geared towards the needs of employers.

    But having the right skills is just one part of the picture.

    As this report has found, for entry level jobs, having the right attitude to work is just as important, if not more so, than even basic skills.

    Whilst the scope of today’s report is much wider than young people – looking, as it does, at all potential entry level candidates – it made me think of the Wolf report and our failure to properly equip the young with the skills they need in the real world.

    I think, as a society, we have let young people down by not preparing them for life beyond education.

    But worse than that, we have stood by as they have been sold a lie.

    We have allowed reality television to make them an empty promise of overnight success.

    Saturday night talent shows make ten second celebrities of ordinary people.

    This is not harmless viewing; implicit in this programming is the notion that you can get something for nothing.

    That if you wait around long enough your true talents will be discovered and fame and fortune will be yours.

    It is time for these reality shows to get a reality check.

    The rise of the cheap, temporary celebrity has eroded people’s responsibility to support themselves.

    We have a triple whammy of failure for young people in Britain today.

    The education system does not prepare them for the world of work.

    The benefits system encourages inactivity.

    And celebrity culture tells them it’s all going to be fine, that their moment in the sun is just an audition away.

    It is small wonder that we have well over a million** **16-24 year olds who are not in full-time education or employment.

    The real challenge of the CSJ’s report is how to restore employability in the unemployed.

    The report quotes one employer who summarised employability using the acronym PRIDE:

    – Professionalism

    – Reliability

    – Interest

    – Determination

    – Enthusiasm

    How do we restore the principles of PRIDE in our young people and more generally in the long term unemployed?

    We in Government hold some, but by no means all, of the levers for change.

    As the CSJ report rightly points out family, peer groups and wider society also have an enormous impact on aspirations and expectations.

    This is as much about culture change as it is about Government reforms in education or welfare.

    Government is tackling these issues head on.

    We have accepted Professor Wolf’s recommendations to improve the system of vocational education for 14-19 year olds.

    And we are committed to raising the age of participation in education or training to 18 by 2015.

    We are also committed to integrating employment and skills – making the real world of work the focus for skills training.

    We will improve basic skills like literacy and numeracy by providing a full subsidy for basic skills training in England for everyone aged over 19 years old, regardless of benefit status.

    We will also fully fund training for people on active benefits to address skills gaps, working with individuals and employers to ensure training is tailored to their needs.

    And all training will be accredited meaning over time credits from completed courses will add up to full formal qualifications.

    We are empowering Jobcentre Plus to work more closely with local employers, colleges and private providers to help ensure that flexible and responsive provision is delivered to meet the needs of employers and communities.

    One of the most important aspects of this is work is ensuring they understand the local labour market and are able to respond accordingly.

    Frontline services are being encouraged to operate much more strategically and have been granted the power to tailor support to the individual at the right time for them, rather than at specific points in time.

    Additionally, Jobcentre Plus is now able to use data about current and emerging vacancies to identify future skills needs.

    District managers will then work with local training providers to develop short courses designed to meet those needs.

    In addition, from August this year we will give Jobcentre Plus advisers the power to require some benefit claimants to attend training if they are clearly missing specific skills which would help them to get a job.

    We have increased the funding for apprenticeships to over £1.4bn this year, enough to train 360,000 apprentices, delivering real opportunities to progress across a range of industries.

    Apprenticeships are an excellent way of building capacity for the future and ensuring young people in particular are able to move into fulfilling and sustainable careers.

    For long term unemployed people welfare reforms will provide a much more responsive benefits system and personalised back to work support.

    Universal Credit will deliver a real time tax and benefits system, making it much easier for unemployed people to take short term, flexible jobs like those offered at entry level.

    At the same time the new Work Programme will provide tailored support for people finding it difficult to find work.

    This support is being delivered by private providers who are paid by results.

    The emphasis is on sustainable employment with providers earning more money the longer they support someone to stay in work – up to £13,700 over two years in some of the hardest to help cases.

    We have not dictated to providers how they should provide support so that they are free to use whatever methods they know work and to develop innovative new ways to improve existing methods of support.

    However, we know from this report and our own experience that often providers choose to develop effective relationships with employers so that they are able to more accurately match the right candidate to the right job.

    And the emphasis on sustainable employment means that providers will be incentivised to offer some form of in-work support.

    This could reduce the risk to employers of hiring some of the harder to help, long term unemployed as there will be some level of consistent support available to the new employee.

    There are a number of further steps Government is taking to tackle this issue.

    For example, over the summer we hope to launch the new sector based work academies.

    These are sector specific packages of training and work experience with a guaranteed interview at the end.

    They are focused in sectors that have high volumes of vacancies – often at entry level – and included accredited qualifications.

    Government is providing practical solutions, we are pulling all the levers we can but it must be a combined effort.

    We need employers to work with us to ensure training actually provides the skills they need.

    We need training providers and employers to work closely to design and deliver training and work experience packages.

    We need educational reform so young people are able to gain qualifications that are worth something to both students and potential employers.

    But most of all we need to restore PRIDE in our young people and long term unemployed, that’s about societal change and is a task we all share.

  • Lord Freud – 2010 Speech to Institute of Revenues Rating and Valuation

    lordfreud

    Below is the text of the speech made by Lord Freud to the Institute of Revenues Rating and Valuation in London on 28th September 2010.

    Introduction

    Thank you for inviting me along to talk to you today.

    And I must say – your timing is excellent.

    The Government is currently putting a great deal of effort into initiatives that should have a positive impact on the kind of work that IRRV members do every day.

    Specifically – our new ideas about how we tackle fraud and error across the benefits system.

    But before I get into the detail, I just wanted to put some of our thinking in this area into context.

    Creaking system

    The Coalition was founded on the fundamental principles of freedom, fairness and responsibility.

    Those principles have prompted some really radical thinking right across government – and nowhere more so than on welfare.

    The 21st Century Welfare Paper we published in July sets out a whole new approach to welfare.

    The reforms will:

    – help people who could work to make the journey back into employment through the new Work Programme

    – make sure work pays – even for the poorest – with our options for Universal Credit and a simple taper system for withdrawing benefits

    – move us toward a far less complex, more dynamic benefit system will make it easier for people to calculate how much better off they will be in work

    – and just as importantly, the welfare reforms will create a simpler system that will slash administration costs, as well as reducing the opportunities for fraud and error.

    Complexity

    Running this creaking system currently costs the taxpayer about £3.5 billion per year across DWP, while fraud and error costs another £5 billion, including the tax credits system.

    Moving toward a simpler welfare system will help us deliver support far more efficiently.

    And with HMRC making progress on their consultation to use real-time data under PAYE II, we have a tremendous opportunity to really attack the numbers on fraud and error.

    Differentiate

    Some of you may be sitting there thinking, “I have heard all this before”. But this is a real step-change in our whole approach to welfare and it is crucial that we make the most of this opportunity – especially at a time when the Government is facing up to the challenge of a massive fiscal deficit.

    However, I also think it is important to differentiate exactly who we – as a government – have in our sights.

    First off, this is certainly not about targeting the poor.

    Quite the contrary.

    As this Government recently made clear, we are determined to clamp down across the whole spectrum of fraud – whether that is tax evasion at the top end, VAT fraud, benefit fraud or anything else.

    Given the pressure on the public purse, we simply have to make every penny count – and that includes going after the cheats at every level.

    For DWP, it means targeting the criminals and gangs who actively set out to defraud the system, as well as the individuals who deliberately deceive us to get money they are not entitled to.

    It is not about punishing those who are simply baffled by the vast complexity of the system and get it wrong.

    This is an important distinction, because through our plans for Universal Credits, we are doing our utmost to create a simpler, fairer welfare system that is easier for people to use.

    And the really good news is that a system that is easier to navigate will not only save time and administration costs – it will also make it far easier to differentiate error from fraud.

    Today, this is often a grey area, given the genuine complexity that exists in the system.

    But as our welfare reforms take hold, this grey area will shrink dramatically.

    Through a simpler Universal Credit system, the gap between fraud and error becomes very sharply defined indeed.

    At that point, if it is not a clear error, it will be classified as fraud. It is that simple.

    We will clamp down hard on anyone who makes an active choice to defraud the system:

    – criminal gangs

    – identity fraudsters

    – or people who make a conscious choice not to alert us to a change of circumstances for extended periods, because under a simpler system we will have far higher expectations that people tell us the truth.

    Strategy

    For anyone in these groups, we simply must have effective enforcement, because benefit fraud is not a victimless crime – in effect, they are stealing money from the poor and vulnerable who need it most.

    Which brings me to the next part of my speech today – how we are setting out a wider strategy to tackle benefit fraud.

    From my visits around DWP, I have witnessed first-hand the dedication and professionalism of our staff – from those who process benefits right through to the investigators chasing down the fraudsters.

    I know these same high standards are shared by our local authority colleagues. But one thing we know for sure is that criminals are always testing the system for weaknesses and coming up with new scams.

    That means that we have a responsibility to keep stepping up our game too.

    That is why we are working with partners inside and outside government to make sure we stay one step ahead of the criminals.

    In DWP, we have split the challenge across 5 fronts:

    – prevention

    – detection

    – correction

    – punishment

    – and deterrence

    There are specific plans being developed to tackle each of these areas and I’ll touch on a few of these today.

    Five Strategic Areas

    On Prevention, for example, I want to see closer cooperation with the private sector and credit reference agencies to harness the best data analysis possible.

    I also want us to take advantage of new technology to get accurate, real-time data analysis at the point of claim. This will make it far easier to spot the tell-tale patterns of fraud.

    Or as one expert recently referred to it – tracking the “muddy footprints” of the professional fraudster.

    I believe it is only a matter of time before we get really effective at targeting the criminals and gangs who perpetrate major scams.

    Making better use of tools and techniques such as these will also help us tackle identity fraud – something that I have a close personal interest in, having been targeted myself recently.

    On the second strategic priority – Detection- I want to make sure that Government bodies such as DWP, HMRC, and Local Authorities maintain their long track record of effective cooperation.

    Not just sharing data more effectively, but reinforcing our joint investigative capabilities as well.

    On Correction, I want to make sure that we get back what we’re owed – in particular by making sure we’re making full use of all the tools available so that we can target the assets of the criminal gangs.

    That brings me on to the subject of Punishment. This is another area where we are planning to pile on the pressure:

    – by introducing wide-ranging penalties for low-value fraud

    – by securing swifter and tougher punishments so that cheating is just not worth the risk

    – and setting out strong, punitive sanctions for organised criminals – and that includes:

    – wholesale asset stripping under the Proceeds of Crime Act

    – banning these people from accessing any benefits at all for as long as we can

    – and in the case of international gangs, making sure that we use our full powers to deport the guilty parties.

    Finally, Deterrence. Here, I want to make sure that criminals get the message that Benefit Fraud is a crime that just doesn’t pay.

    We will advertise that fact with a clear message that says:

    – we will find you

    – we will seize criminal assets

    – we will make sure that there is no place to hide.

    International

    That message extends to international gangs as well.

    Other countries face the same scams targeting their welfare systems, so we will work closely with our international partners to develop practical counter-measures and effective cross-border enforcement.

    In the meantime, I am determined that we continue to reinforce our defences against fraud so that the UK comes a long, long way down the list of countries targeted by organised gangs.

    Conclusion

    You can expect to hear more about some of plans to boost our defences in the very near future when our new Fraud Strategy is published.

    In the meantime, I hope that I have made the point loud and clear that we are absolutely determined to clamp down on the fraudsters, the serial cheats and the criminal gangs.

    No-one should underestimate our determination to take on the criminals.

    And no-one should think for a moment it is going to get any easier to get away with it:

    – with a simpler welfare system, we will drive better value for the taxpayer

    – with less complexity, we will be able to find the fraudsters far more easily

    – and with a comprehensive and coherent fraud and error strategy in place, we have all the tools we need to make sure that we keep the criminals on the back foot.

    It’s an exciting time for us.

    And as we develop these ideas in the future, I hope that you will work with central government and other agencies to make sure that we keep making life a lot less comfortable for the cheats in future.

    Thank you.

  • Cecil Franks – 1983 Maiden Speech in the House of Commons

    Below is the text of the maiden speech made by Cecil Franks in the House of Commons on 31st October 1983.

    I thank you, Mr. Deputy Speaker, for calling me to speak in this debate and in so doing giving me the opportunity of making my maiden speech on a subject which is of vital importance to my constituency. It is a privilege also to be called to speak after such a distinguished parliamentarian a s the right hon. Member for Blaenau Gwent (Mr. Foot), even though our views will differ widely.

    Barrow and Furness is a new constituency comprising the whole of the former constituency of Barrow-in-Furness, together with the Low Furness region of the former constituency of Morecambe and Lonsdale.

    Barrow-in-Furness was represented for 17 years by the right hon. Albert Booth who served the constituency and his constituents with great distinction, achieving high Government office as a member of the Cabinet. He is a man of great integrity and principle, and I am happy to have this opportunity of paying him tribute.

    The Low Furness area was represented from 1979 by my hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd). He, too, was assiduous in his concern for his constituents, by whom he was and is held in high regard and esteem, and I wish to place on record my personal appreciation of the guidance and assistance that I have received from him since I became a Member of this House.

    The town of Barrow-in-Furness lies at the end of the peninsula of south-west Cumbria. It is a shipbuilding town whose prosperity depends entirely on the viability and success of its major employer, Vickers Shipbuilding and Engineering Ltd.—a constituent part of British Shipbuilders. The design and building of submarines, both conventional and nuclear powered, has been largely concentrated by British Shipbuilders at the Vickers shipyards, where over 8,000 people are employed in design and construction. In addition, there is a successful engineering section primarily involved in the design and manufacture of armaments, employing a further 4,500 people. With profits last year of £19 million, the company is the most successful within British Shipbuilders and has a management and workforce confident in themselves.

    Whilst I have no wish to introduce a note of controversy in a maiden speech, I should be failing in my duty to my constituents if I omitted to make the point that with 12,500 people employed in the company, the vast majority of whom live within the constituency, several thousand of my constituents would have faced inevitable job loss and redundancy if the electorate had preferred the defence policies of the Opposition to those of the Government.

    Great efforts have been made to widen the industrial base and three local employers of note should be mentioned. British Gas has constructed a terminal at Rampside, where gas from the Morecambe bay field is received, treated and then fed into the national grid.

    British Nuclear Fuels Limited has a large capital investment in its terminal at Ramsden docks where irradiated nuclear fuel is imported from Japan, transported by rail up the west Cumbrian coast to Windscale and Sellafield, reprocessed and exported back to Japan. After the export of oil, the operations of British Nuclear Fuels Ltd. are one of the largest, if not the largest, single sources of export earnings, something which is perhaps not widely known.

    Also located in Barrow, is the paper tissue mill of Bowater Scott, which, with four mills in production, is the largest manufacturer of paper tissue in the United Kingdom and, together with a similar sized company in West Germany, the largest in the world outside the United States.

    Four miles north of Barrow lies the small town of Dalton-in-Furness, whose residents have waited for many years and with great patience, for the construction of the Dalton-in-Furness bypass on the A590, which carries the heavy traffic to and from Barrow. I fear that their patience will not endure much longer.

    Beyond Dalton-in-Furness, sweeping up the peninsula, is the Low Furness region, as picturesque a part of the Lake District as any, with its rolling farmland and gentle hills, and its attractive villages and beautiful coast overlooking Morecambe bay.

    The natural centre of the area is the market town of Ulverston, charming and dignified and a centre of tourism in its own right. In addition to the market, there is a regular and lively cattle market serving the whole of south Cumbria. There is also a small but successful light industrial estate.

    Two other points of interest are that Ulverston is the birthplace of Stanley Laurel of Laurel and Hardy fame, and also that it is the home of Hartley’s Brewery, from whence comes a well-known and popular local beer. It is fair comment to say that for many years much pleasure has been given to a great number of people by the happy combination of Laurel and Hartley.

    Turning to the subject of the debate, let me say clearly and without equivocation that I endorse entirely the Government’s approach and policy on the deployment of cruise missiles. I find it incomprehensible that there are those who argue that strength will come from a voluntary and self-inflicted weakness. I find it equally incomprehensible—and reprehensible—that there are those who seem to find their natural allies not with the democracies of the West but with the tyrannies and dictatorships of those who are our enemies in thought and deed; and that there are those who oppose, as a matter of course, each and every act that the Western democracies take to safeguard and defend themselves.

    The defence of the realm is the prime duty of the state. The deployment of cruise missiles will counter the imbalance that threatens our security. This threat is not of our making or of our choosing, and those who criticise and condemn should direct their words and energies to our enemies and not to our allies.

    We are part of the western Alliance, and the British people, in decisive terms, have spoken for this to continue and to be strengthened. In two world wars, our allies have played a critical part in the defence of our freedom and independence, and our future freedom and independence lie in the preservation of a strong and united partnership with our NATO allies. This is the path that we must follow; there is no other.

    I crave your indulgence, Mr. Deputy Speaker, and that of the House, to widen somewhat the scope of my remarks and to make reference to two allied aspects of defence of particular importance to my constituency—the Trident programme and the development of Sea Dragon.

    Trident is a parallel part of our nuclear defence strategy. The Trident submarine is being designed and will be constructed at the shipyards of Barrow. The policy issues have been fully debated in the House and suffice it for me to say on that that the Trident programme has my full support. But where others have spoken on aspects of policy, my concern goes further, because the employment of 4,000 constituents is, and will be, dependent on Trident for the next decade and beyond. Barrow has placed its trust in the Government’s commitment to Trident and that trust, in turn must be fully honoured.

    Sea Dragon is also designed and built in Barrow. It is a close-in weapon system, the last-resort defence to Exocet and similar missiles when Sea Dart and Sea Wolf have failed to take out the threat. British-designed and built, it is currently in competition with two similar but inferior systems designed abroad. The export potential is tremendous and I urge that an early decision be made in favour of Sea Dragon. In passing, may I also mention that a decision is awaited on the conventional submarine, SSK 2400, where export orders are also anticipated.

    As I said earlier, where others may speak on defence on matters of policy and principle, my concern goes beyond because the House will appreciate that the whole prosperity and economy of my constituency is dependent on a firm defence commitment. Barrow and Furness has a Member of Parliament who believes in defence, and in defence in modern terms. I will not fail my constituency and I am resolute in my belief that the Government will not fail the country. Strength, not surrender, must be our single-minded objective, for there is no credible or acceptable alternative.

  • Padraig Flynn – 1997 Speech to TUC Conference

    Below is the text of the speech made by Padraig Flynn, the then European Commissioner for Employment and Social Affairs, to the 1997 TUC Conference.

    President, members of the General Council and distinguished delegates, first of all I should say how delighted I am to be back with you today, to share your enthusiasm for building a new employment and social agenda in Europe and in the United Kingdom.

    Before I move on to the business of the day, I want to mention just for a moment the European Year Against Racism. I want to congratulate the many workers, in both the public and private sector, who have made this year so substantive across the United Kingdom. I want to congratulate the trade union Movement in the United Kingdom for using the year as a focus for the long‑term task of ensuring that social justice, equality and the celebration of diversity are the daily fare of working life. Europe, in solidarity, applauds you.

    The first time I had the privilege of addressing this Congress was, as the President said, some four years ago, just a few months after I took responsibility for employment and social affairs in the European Commission and just a few months before we produced ‑‑ at the behest of all of the governments of the Union ‑‑ a White Paper on Growth, Competitiveness and Employment. That document and its core message of solidarity found strong allies in the trade union Movement across Europe. Its balanced approach ‑‑ making growth, competitiveness and employment complementary and sustainable ‑‑ remains central to Commission thinking. It underpins our continuing collaboration with the Member States of the Union.

    Much has happened in relation to the European Union’s economic and social policies since that Congress of 1993, but not enough in my view, nor I suspect in yours. The rate of unemployment across Europe remains unacceptably high.

    If we are to tackle this problem effectively we must put things in perspective. Europe is failing to create enough jobs. Fair question: why? Some voices are still blaming this on our competitive performance. They say we cannot compete either with low wage economies or with more efficient developed economies like the United States and Japan. Why, you ask? Because our costs are too high? Why are they too high? Because we have over‑developed social policies, which we cannot afford, they say. The question is: what does Europe do about it? Europe compounds the difficulties, we are told, by proposing even more costly social policies.

    That view has little foundation in fact. The European Union economy has underperformed for much of the past two decades in terms of growth and job creation but not because of lack of competitiveness. Europe is competitive on any criteria that makes economic sense. We pay our way in the world with a trade surplus of over one per cent of GDP. We have low stable inflation, 2 per cent, creating a positive and predictable environment for business. We have a steady 2 per cent a year growth in productivity, two to three times faster than the United States, steadily narrowing the real income gap between us. We have declining unit labour costs, and the highest levels of profitability for 35 years.

    These are the facts, not fantasy. They show the true state of Europe’s economic fundamentals. So to suggest that Europe is not competitive and then to blame it on Europe’s social model is, in all its forms, simply misleading. Europe’s social model is not a drag on our competitiveness. Public social spending in Europe is a productive factor, creating stronger economic performance. It is not a cost; it is an investment for both the short and the longer term. It is not an unaffordable luxury. It is simply the European way of coping with change and with paying for services that citizens of all advanced industrialised countries demand.

    Our problem is not that our economies are weak, or our budgets unbalanced through excessive social spending. Our problem is that our competitive success reflected in trade, and in productivity, has not been matched by effective economic policy management. Our persistent unemployment is not the consequence of overdeveloped social policies, although many could be usefully reformed. It is the result of underdeveloped and fragmented economic policies, as well as poor investment in human resources.

    The very success of the Single Market has highlighted the growing problems arising from having economic policies based on the old concept of fragmented national markets, rather than on the reality of the Single European Market. This is reflected in the different fates of Europe and the United States, during and after the major recessions of the seventies and early nineties. In the United States the policy guidelines and instruments of countervailing action exist. The central monetary authority, the Federal Reserve, is obliged to pursue both full employment and price stability. The FED has used its interest rate policy very effectively in both respects. Europe has lacked such a framework. All we have had has been a loose commitment to economic policy coordination and fourteen separate currencies.

    And the result? While the United States recovered rapidly after each recession, Europe did not. Without the means to manage common action European recovery has been slow. Each recession has left a legacy of high and increasingly structural unemployment. The paradox is, of course, that some commentators never cease lecturing us about how we should learn from the United States with its flexible labour markets.

    On the contrary, we learn much more from the United States in terms of economic policy management than in terms of labour market and social policy design. The former has enabled the United States to maintain a high level of employment. The latter has led to costly social problems ‑‑ the working poor, crime rates and imprisonment ‑‑ that we in Europe have more successfully avoided. Now Europe has the opportunity to escape its own policy traps, to emulate the positive aspects of United States employment performance, while maintaining the inherent strength of the European social model.

    The recent Amsterdam summit ‑‑ wrongly played down or written off by many ‑‑ was indeed a watershed in this process. The new European Treaty has put employment centre stage alongside the other criterion of success ‑‑ price stability. This created the opportunity to transform the long‑run growth in performance potential of the European economy. Two phrases from the Treaty tell it all. Firstly, it says, “Member States… shall regard employment as a matter of common concern and shall coordinate their action.” Secondly, “The objective of a high level of employment shall be taken into consideration in the formulation and implementation of Community policies and activities.”

    The identification of employment as “a matter of common concern” reflects awareness of the interdependence of Member States. If one Member State resorts to competitive devaluation, distorting subsidies to industry or a downgrading of working standards, that adversely affects job prospects in all of the other Member States. There has to be an end to monetary dumping, fiscal dumping and especially an end to social dumping.

    The aim of the Treaty is not just to stop bad behaviour; it goes further. It aims to promote a positive‑sum game in economic and social policy from which we can all benefit. Amsterdam, with Maastricht, gives us the tools and the positive policy guidelines that we need to ensure the long‑run growth and development of employment in the European economies.

    There are two political consequences that emerge. The first is that EMU can no longer be seen as some kind of optional extra. It is the necessary counterpart to the increasingly integrated European economy in which national, economic policies lose much of their force if exercised alone. The second is that monetary union alone is not enough. Our objective must be a full economic and monetary union, with an effective and positive cooperation and coordination of national policies and objectives, including employment, as well as appropriate monetary policy.

    Economic policy failures have been the root cause of Europe’s unemployment. Too often, though, unemployment has turned into long‑term unemployment because of the weaknesses in our social protection and labour market systems.

    Too little emphasis on employability policies and too much weight given to unemployment insurance and other income maintenance schemes have weakened our capacity to adjust. We need to modernise, not only our economic policies but also our labour market policies, including our social protection systems.

    But let me be quite clear about one thing: reform and modernisation does not the mean wholesale deregulation. Contrary to the rhetoric, deregulated labour markets do not produce higher levels of employment than well regulated ones. What they do tend to do is to reduce standards; they widen the spread of incomes between richer and poorer members of the workforce; they reduce overall levels of productivity‑enhancing investment in people and capital.

    Well regulated labour markets are as essential to long‑run economic success as well regulated product or financial markets. They enable entrepreneurs to create jobs, just as much as they enable workers to equip themselves for changing skills demands. They also help to create what I believe is an essential pre‑ condition for economic and social well‑being: a skilled, flexible, secure and mobile European workforce.

    To achieve this, the regulatory framework cannot remain static in a changing world. We must reconcile the flexibility which firms need with the security which workers require. This is the key to bringing our success as productive economies and societies into the new century, and into the new shape of working life.

    In the new, more fluid labour market the need for security will not diminish, but its purpose, its form, needs to change in order to serve and to help create a more dynamic labour market and a more dynamic economy. An important part of this must be a new and a stronger focus in social protection systems on employability and access to skills. Social protection must actively equip people to work as well as provide basic support.

    Just as important, labour law and the collective arrangements governing future working patterns must offer recognition to new forms of working conditions and contractual arrangements. The arrangements must factor in human resource investment as an integral part of the mutual contract.

    The incorporation of the new, reinforced protocol into the Treaty as a chapter of social policy was a major political achievement. More importantly still, the endorsement and the opting in by the United Kingdom was very significant and it has strengthened European social policy. I warmly welcome that step taken by the United Kingdom Government. It has put the United Kingdom back at centre stage in the development of a truly European social policy, a place they should always have been in.

    However, some people have warned that as a result I would be travelling here to Brighton today and that I would be coming by boat ‑‑ coming by boat and towing behind me a huge raft of European legislation as a result of the Social Chapter. What a misunderstanding ‑‑ and I am being kind in the words I use here ‑‑ as to what European social policy is all about and what the Social Protocol does and does not do. A Common Market needs common minimum standards, if all workers are to benefit from the economic benefits which the Market brings about, and to prevent social dumping.

    Most of the relatively few laws that have been adopted in the last 30 years have covered health and safety matters, have covered freedom of movement of workers, have covered working conditions and have covered equal opportunities. Can anyone here suggest or argue that these laws are not justified or that they should be removed? I think not.

    The Social Protocol is not, I repeat, a legislative agenda and it has no presumption in favour of legislation. The Social Protocol is a development of the means we have at our disposal to protect the minimum rights of workers. It is important, now that the United Kingdom has signed up, that it provides a single coherent policy approach. It also creates direct input by the social partners to the policies which directly affect them and which is the basis for a new legislative approach in which you ‑‑ yes, you ‑‑ the trades unions and the employers become the key legislators.

    The European social dialogue is becoming a real and effective partnership. I look forward to supporting you in the realisation of the full potential of this new mechanism in the future.

    The Protocol does not call for a whole new raft of legislation. There is no conspiracy or hidden agenda. Instead there is a clear mechanism for examining what steps are necessary and, if necessary, how to proceed.

    Next year I will be discussing a new European Social Programme. It will not be a stand‑alone approach to social issues: it will present a strategic, integrated, mutually reinforcing set of social policy guidelines aimed at supporting the wider modernisation of Europe. As with everything else that we are doing, its main preoccupation will be improving the prospects for employment.

    Let us be clear: people matter and workers matter. In my book, flexibility does not mean insecurity. Workers who feel insecure feel threatened and that is not the way to motivate people to produce more, to accept change and to think “future”. Workers want to be part of and consulted on the way forward for a new Europe. We all know the demands of technology and up‑skilling. Workers will co‑operate, but they must be treated fairly. I do not think that that is an impossible contract in the year 1997.

    I state it in clear and unambiguous terms: if legislation is necessary and needed, I will not hesitate to propose and promote the appropriate legislation.

    Action on all fronts ‑‑ economic, employment and social ‑‑ will be the subject of the Jobs Summit in November this year called by the Luxembourg Presidency.

    I finish today with my proposals for employment policies. In the midst of all the complex issues to discuss, we see four main lines of action that Member States must deliver on:

    First is entrepreneurship, to create a new culture, a new climate and spirit to stimulate the creation of more and better jobs. In other words, we need a strong sense of business development in a growing and strengthening European economy.

    Secondly is employability of job seekers. We need to tackle the skills gap by modernising education and training systems and strengthening the links with the workplace so that all can seize the new employment opportunities ‑‑ a real springboard for new jobs.

    Thirdly is equal opportunities for all at work, to modernise our societies to a new order where men and women can work on equal terms and with equal responsibilities to develop the long‑term growth capacity of our economies.

    Fourthly is adaptability of enterprises and of the workforce to respond to changing market conditions, ensuring that no group is left behind, and facilitating the restructuring of industries and workplaces in a way that is acceptable to both workers and employers.

    In addition, we want to see governments set clear and measurable targets for tackling the priority issues of youth unemployment, long‑term unemployment and equality between women and men.

    We see these actions as part of an integrated and comprehensive economic and social strategy. They must be pursued together within the framework of supportive macro‑economic policies; they must be backed by institutional reforms, making the national labour market institutions and social protection systems more employment‑friendly.

    Under each of these headings, guidelines are being prepared which reflect these basic objectives. They form part of a broader framework for cooperation on employment that the Amsterdam Treaty and the European Council Resolution put in place. They provide the basis for developing the concrete actions on which the Council has insisted.

    Never has there been a more propitious moment to put one’s views and proposals clearly on the table. We seek a consistent framework to measure performance.

    Today, as we prepare for the Jobs Summit, we can clearly see that employment and social policies are top of the European agenda. The new employment provisions in the Amsterdam Treaty give Europe a real opportunity to make low growth and persistent unemployment a thing of the past. They provide the political and operational means by which we can address our deficiencies and failings through an effective conjunction of national and union‑wide policies.

    Within this framework, European social policy stands as an integral part of the process of modernisation in Europe.

    I understand that invitations are the order of the week. In the run‑up to this Jobs Summit and in the period beyond, my invitation to you is to join us in managing the process of change.

    The common concern on the scale of unemployment in Europe and the deterioration in job standards has now been joined by a common understanding of the causes and the remedies that we can bring to bear. The ground is laid for a good future. Let us turn Europe around for the better and let us get on and complete the job. I invite you to be part of it with me.

  • Paul Fisher – 2014 Speech on Inflation and Interest Rates

    Below is the text of the speech made by Paul Fisher, a member of the Monetary Policy Committee, in London on 23rd January 2014.

    This morning I would like to discuss some of the important issues currently influencing the setting of monetary and financial policy by the Bank of England. Those policies may have a direct bearing on pension funds; most obviously you might think via the yields on financial assets but perhaps more importantly via the stability of the real economy.

    Developments in inflation 

    First of all I want to note the importance the Monetary Policy Committee (MPC) attaches to CPI inflation being close to its target of 2%. Indeed it is currently at exactly its target of two point zero per cent for the first time since April 2006! (Although it did drop below 2% for a time in 2007 and 2009). Although we can’t expect inflation to be exactly 2.0% very often (just four times since it was announced as the target variable in December 2003), inflation has been above target for most of the past six years. Both the extent of the overshoot and its persistence were greater than the MPC initially expected. The pain of that experience of high inflation over the past few years should remind us all why the UK attaches so much importance to keeping inflationary pressure under control and why we have an inflation target.

    Inflation is costly in all sorts of ways. It can destroy real incomes, for example by acting as a hidden tax, and destroy wealth through a misallocation of resources. Those on fixed nominal incomes or who depend on savings income may be badly affected whereas it can inflate away the debts of others. And it generates a variety of other economic costs and distortions as changes in the general level of prices start to dominate the information contained in relative or ‘real’ prices. Many of these costs are pernicious by being implicit; for example in businesses having to change price lists, or consumers having to spend more time looking for real value.

    The MPC could have set a tighter monetary policy to try and limit the rise in inflation. Why didn’t we? First, because we were pretty sure that the factors driving inflation higher were going to cause changes in the price level rather than being consistent with, say, excess demand generating persistently higher inflation. We expected inflation to fall back, once those changes had passed through. And, second, to prevent even a temporary rise in inflation consequent to those price level shifts, the MPC would have had to try to depress the economy even further, by consciously pushing down on output, employment and nominal wage growth – so real wage growth would have been weaker, not stronger – at a time when the economy was already very weak. So, despite the costs of the inflation which were experienced, the costs of the policy needed to counteract it would have been even greater in this specific circumstance of one-off shocks and left the UK economy in a much worse position now.

    I want to stress that these calculations would not lead to the same conclusion were inflation being driven by pressure arising from excess demand or if inflation had led to expectations of above-target inflation in the medium-term. In those circumstances, where inflation would be more persistent and hence much more costly, the benefits of bringing inflation back to target would outweigh the short-run costs of doing so. The recognition of these different short-run trade-offs, depending on the forces driving inflation, lie right behind the specification of the Remit we have been given by the Government.

    The fact that inflation has now returned to target confirms to me that we were broadly correct in our underlying assessment that the factors pushing up on inflation would be temporary, although the near-term path for inflation hasn’t always been what we expected. It is very difficult to anticipate the precise trajectory of prices and we have certainly learned more about the dynamics of inflation during this difficult period: the effects of the 25% depreciation in the sterling effective exchange rate between mid-2007 and early 2009 were larger and longer-lasting than we anticipated for example. But tightening policy in response would have been a major mistake: a tighter policy then and we could now be facing the threat of deflation and depression, rather than inflation around target and the prospect of real recovery.

    The MPC’s policy has been to keep short-term interest rates low, by setting Bank Rate at 0.5%, and to stimulate the economy through asset purchases and latterly through forward guidance. Although asset purchases work through several channels, I want to spend a little time on their contribution to depressing longer-term interest rates. Low interest rates – at all maturities – have been necessary to help stimulate spending and so help set the conditions for a recovery in the economy. But for many investors, such a policy generates low financial returns which are difficult to cope with. Pension funds, for example, need relatively long-term, low credit risk investments – such as gilts – and those have been generating lower than normal returns for some years. In fact, the search for yield has tended to depress all financial returns. But I want to reflect on the relationship between rates of return and the real economy. As a general proposition, one cannot expect to earn high risk-adjusted real returns from financial investments if the underlying real economy is not growing. For example, it is business profitability which drives equity dividends and prices.

    The real ‘risk-free’ interest rate is also associated with real growth. Slow economic growth and low financial yields have been a feature of most of the developed world in recent years because of the global nature of the recessionary forces at work. Once a recovery in the UK economy has been firmly established then one would naturally expect real financial returns to be higher, and the real policy rate (i.e. Bank Rate minus expected inflation) can start to normalise.

    We can express this thought in a different way. Would it have helped financial investors to have had higher nominal interest rates over the past few years? If that had meant a deeper recession, deflation and an even longer-lasting malaise in the economy, then very few UK-based medium-term investors would have been better off as demand and activity would have dropped off further, credit risk crystallised and a range of credit investments went bad. Those with longer term investment horizons – such as everyone in this room should have – will appreciate that the best outcome for UK monetary policy is for it to be set at the right level to lay the foundations for a stable economy.

    In that regard, we should bear in mind that the economy will always be subject to unforeseen shocks which tend to push it away from stability for a period of time. The job of the MPC is to react to those shocks by bringing inflation back to target and, subject to that primary objective, in a manner which helps sustain output and employment.

    As well as inflation back around target, we have also seen a resurgence in growth over the past year. It was difficult to explain the suddenness of the change in sentiment which accompanied the recovery during 2013 but growth in itself should not be regarded as surprising. It is the near stagnation from 2010-12 which was harder to understand. We have been stimulating the economy with historically extreme levels of monetary policy for a long time and a variety of headwinds (including the problems in the euro area, a tightening of credit conditions, the drag on activity from fiscal consolidation, and a squeeze in household real incomes resulting from the fall in productivity and higher energy and commodity prices) have all contributed to limit the effect of that stimulus. What seems to have happened in 2013 is that at least some of those headwinds were perceived to have diminished, allowing the policy stimulus to come through and the resulting growth has generated the renewed consumer and business confidence which reinforces demand.

    We are very conscious that the headwinds have not gone away: much of Europe and some other parts of the world continue to struggle for sustained growth; fiscal consolidation in the UK (and elsewhere) is likely to continue for a while to come; and the financial sector still needs some rebuilding. Indeed, the official production and construction data released earlier this month were rather disappointing, reminding us that strong growth from here on is by no means guaranteed. But to varying degrees perhaps the very worst of the storms may be behind us. Just a tailing off in some of their negative impacts may have been sufficient to allow the economy to start growing again.

    Interest rates and forward guidance 

    So why aren’t we moving to tighten policy straight away, why did we issue forward guidance around monetary policy? The answer is in the levels of output and employment, not their growth rates. After nearly 6 years since the start of the crisis, the level of output in the economy is still 2% below its peak in 2008. A conservative extrapolation of the pre-crisis trend would suggest that UK output is some 15-20% below where it would have been expected to be by this time in the absence of the crisis. It seems unlikely that we will recover much of that gap and in any case the calculation is getting less precise and less relevant.

    Eventually, economic historians may work out what happened to potential output and we should establish a new reference point. As things stand today, it is difficult to know precisely where the new sustainable growth path of the economy lies (especially as data for the past few years are still likely to undergo significant revision by the ONS). But with unemployment still elevated, and diminishing signs of inflationary pressure in both goods and labour markets, we can be reasonably confident that the economy needs to grow strongly for some time to come, to regain a stable and sustainable medium-term trajectory.

    The challenge for the MPC is to assess when inflationary pressures will be building and thus when we need to start withdrawing stimulus, so that once we have eliminated slack in the economy, monetary policy is consistent with stable, sustainable growth and hence stable inflation around the target (subject of course to the other forces acting on the economy at the time). That’s an extremely optimistic expectation of what policy can achieve, so let me put it slightly differently. The realistic challenge for the MPC is to avoid a big mistake either by choking off the recovery too soon, leaving the economy in a quagmire, or by allowing inflationary pressures to build excessively, requiring a sharp tightening in interest rates (and the potential for another recession) to bring inflation back under control.

    Forward guidance is a policy framework designed, amongst other things, to help avoid big mistakes. We can encourage and probe growth in the economy by committing not to tighten policy until the economy has used up more of its spare capacity. On one view the policy is simple – we must give the economy plenty of time to establish the recovery before we start to raise interest rates or unwind asset purchases. At another level, some critical judgements are going to be needed because the timing is inevitably uncertain. Given those uncertainties, forward guidance delivers a framework within which the MPC can explore the scope for economic expansion without putting price and financial stability at risk. That guidance should help to give confidence to businesses and households and help to support demand growth. By reducing uncertainty about our reaction function, guidance should also have helped to counteract the pressure in financial markets to price in the chance of a rapid increase in Bank Rate.

    We chose unemployment as the threshold indicator not because it was ideal – far from it – but because other indicators were all less attractive. Of course, no sooner had we announced a policy linked to the unemployment rate than it began to fall unusually precipitously. But what is there not to like about sharply falling unemployment? After all, getting the economy back to a medium-term path quickly, allowing policy to normalise, would be a good thing? Right?

    Well, falling unemployment is undoubtedly a good thing for the individuals who are back in work and on many other social counts. It could only be a purveyor of the dismal science who found rapidly falling unemployment disappointing! Yet, in order to see rising living standards on average, it is crucial to see rising output per head (i.e. rising productivity) – which ultimately drives real national income per head and hence how well off we are as a country. So we need to see rising employment accompanied by even faster growth in output.

    The implied productivity performance of the UK economy has, in fact, remained poor – according to the official statistics, output simply doesn’t appear to be growing fast enough to support the employment growth recorded as well as generate the rapidly rising real incomes one would like to see. Something has to give. I hope that it will be that output grows faster – either through upwards revisions to recent growth rates or faster growth in future. If, on the other hand, the UK economy uses up all its spare capacity, without having had a substantial rise in real national income, then we should all be disappointed.

    The weakness in productivity growth has been well documented, but a convincing explanation remains elusive. There are many plausible explanations of factors which could have contributed to the weakness, but each explains only a small part of the whole puzzle. I don’t have time to get into that debate today, but we do offer a variety of candidate explanations in recent Inflation Reports.

    One better feature of the current situation is that price pressures seem to be subsiding, not growing. Despite good rates of employment growth, there is no sign of nominal wages over-reacting to general tightness in the labour market. Other price pressures also appear to be easing somewhat. Month by month there have been a series of small downside surprises in the inflation rate as oil prices have been relatively stable; the effects of administered and officially regulated prices now seem to be a bit less than previously expected; inflation expectations remain well anchored and the exchange rate has been rising which may help keep a lid on imported costs for a while (but importantly, at the cost of less balanced growth which is a separate problem). Taking the inflationary news together, it would appear that we have a favourable situation in which to explore how much more capacity the economy has, before inflationary pressures begin to build.

    Another positive factor supporting our probing strategy is the emergence of macro-prudential policy. Monetary policy has a difficult challenge ahead, as I have outlined. It will help enormously if financial policies can help deal with, or at least mitigate the risks from, some of the imbalances that are arising in the economy while the MPC aims to restore medium-term stability in the economy as a whole. The housing market is an example of where monetary and macro-prudential policies can helpfully interact and the November 2013 Financial Stability Report sets out some of the policy measures that are underway or could be called on if necessary.

     

    Funding for Lending Scheme 

    One decision that has been implemented is in relation to the Funding for Lending Scheme (the FLS). The FLS contributed to a substantial fall in bank funding costs after it was launched in July 2012. This fed through to a significant improvement in household credit conditions. Rates on new household lending have fallen markedly since mid-2012, with falls of more than 100 basis points in some representative mortgage rates. Both gross secured lending and repayments have picked up strongly. And the number of approvals for house purchase has risen significantly, indicating higher mortgage lending in future. The Scheme has probably been one of the driving influences behind the resurgence of business and consumer confidence – although there are many other factors behind the sort of swing we have seen.

    Partly because of its own success, there is no longer a need for the FLS to provide broad support to household lending. It is not the case that net lending for mortgages by UK banks is, as yet, excessive. Indeed, the annual rate of growth in the stock of secured lending to individuals was under 1% in November 2013. But sharply rising house prices are a potential source of instability and we should not risk adding policy oil to that particular fire. Credit conditions for smaller businesses have also improved, but to a lesser extent, and lending to businesses overall remains muted. The FLS extension will therefore provide continued substantial support for lending to businesses, with incentives in the scheme skewed heavily towards lending to small and medium-sized enterprises (SMEs). As the MPC noted in the minutes of its December 2013 meeting, the changes to the FLS provided support to the MPC’s policy guidance by reducing the risk of triggering the financial stability knockout.

     

    Conclusion 

    Yesterday, the Labour Force Survey headline unemployment rate for the three months to November was published at 7.1%, after another large fall. But even if the 7% unemployment rate threshold were to be reached in the near future, I see no immediate need for a tightening of policy. The MPC has been clear all along, that upon reaching the 7% threshold we will have to consider what the medium-term pressures on the economy are and make an appropriate judgement about the direction and pace of policy, and any further guidance that we may choose to issue in future. It is probably best to think about that in the context of our medium-term inflation projections published in the Inflation Report.

    Overall, the macroeconomic outlook is much more comfortable than it was – but we still have much to do and much to concern us. There is no room for complacency. Can the UK keep growing at the sort of rate consistent with recovery if our key European export markets remain so sluggish? How much more adjustment is needed in the financial sector and in the fiscal position? Have households sufficiently rebuilt their balance sheets to be able to withstand a normalisation of policy? Many of these considerations argue against being hasty in tightening monetary policy. But the inflation target remains our primary objective and we will have to be careful not to allow pressures to build up from excess demand. It would be a relief, probably for both you as investors and for us as policy makers, to get back to more normal policy conditions, but my own judgement is that we are still some way off the point where it is appropriate to start raising Bank Rate and that when it is time, it would be appropriate to do so only gradually.

  • Alex Fergusson – 2003 Speech at Conservative Spring Conference

    Below is the text of the speech made by Alex Fergusson at the 2003 Spring Conference on 7th March 2003.

    One of the principle factors which motivated me to put my name forward as a candidate for the first Scottish Parliamentary election of 4 years ago was the absolute certainty that rural Scotland would need every voice it could get to speak in its defence in a Parliament that would, inevitably, focus on the urban agenda of the majority of MSPs. Many people, from all parties and all walks of life in rural Scotland feared the consequences of that agenda. Today, 4 years on, those fears are proven to have been entirely justified and rural Scotland today is more divided and distrusting than it has ever been. No wonder.

    I don’t blame the Labour party. They are, and always have been, an urban party with an urban agenda. They don’t understand the problems of rural Scotland and I have sympathy with that. What saddens me is that they show no signs of even wanting to understand those problems. No, the real tragedy is that, because of Labour’s indifference, they have left the fate of rural Scotland in the hands of their coalition partners, the Liberal Democrats who are the architects of the muddled thinking and the mixed messages which are the real cause of the cynicism and enmity that I encounter all over Scotland whenever the legislative performance of this first Scottish Government is debated.

    Who, other than the Liberal Democrats could give virtually free access to all land – field and hill alike – to anyone who wishes to take it – on the one hand – and tell all farmers, in the biosecurity Code of Practice – that they must keep people away from livestock at all costs on the other?

    Who – other than the Liberal Democrats – could restructure Scotland’s fishing industry by destroying our fishing communities?

    And who – other than the Liberal Democrats could make such a mess of Agricultural Tenancy reform that a Bill which purports to revitalise the tenanted sector (an aim with which we wholeheartedly agree) has already effectively killed it stone dead?

    Over the last four years it often seems that it is the bureaucrats who have taken over the running of rural Scotland. How else do we explain the almost savage authority with which SNH now carries out its remit? How else do we explain the crippling penalties imposed on farmers who make the tiniest of errors in filling out the increasingly complex forms which they are required to complete? How else can we explain the ever increasing influence of so-called charities and partnerships such as RSPB, Environmental Link and the many others whose place in the decision making process seem wholly inappropriate, unduly influential, and highly questionable?

    Rural Scotland must be offered a real alternative, and it won’t be offered one by the SNP. Perhaps that is unfair, at their conference – they will offer an alternative but it’s an alternative that is more likely to resemble the politics of Stalin and Karl Marx than the politics which are needed in rural Scotland today.

    That real alternative won’t come from the SNP it won’t come from the Greens, from the Scottish Socialist Party, the fisherman’s party or even the often rumoured but entirely invisible Country Party. The real alternatives will be offered by the Scottish Conservative Party whose natural understanding of what makes rural Scotland tick has become increasingly obvious over the last four years.

    Accordingly, as soon as we are given the opportunity, we will instigate a total review of the regulatory burden which is suffocating rural Scotland today, with a yardstick of minimising regulations rather than maximising them, and I include outright rejection of the proposed sheep tagging regime and abolition of the 13 day rule. We will overhaul agri-environmental funding, in conjunction with the industry, to identify a more equitable pattern of distribution rather than continuing the current lottery of applications for the Rural Stewardship and Organic Aid Schemes.

    We will trim to a minimum the remit and operations of SNH, while maximising the local knowledge and practical input which should influence all their operations.

    We will reinstate the much-lamented Rural Forum in a more up to date form and explore every possibility for the greater regionalisation of production and marketing of the high quality products for which Scotland is so justly famous.

    We will restore a tenable balance between communities, tenant farmers, access takers and landowners by repealing parts 2 and 3 of the Land Reform Bill and reviewing the Access provisions of Part 1.

    Never let it be said that this party is against community ownership, access to land or tenants buying their farms. We are not – but it should always be done by mutual agreement and co-operation rather than by the confrontational approach which this Government has turned into an art form.

    In short, conference, we will deliver genuine integrated rural development – an overall package which encompasses housing, health service delivery, education, transport and infrastructure priorities alongside the traditional rural industries of farming, forestry, fishing and tourism.

    That is the approach which rural Scotland needs and which only we will offer. I believe that the electorate will endorse it strongly on May 1st and I commend it to you today.

  • Tim Farron – 2011 Speech on Fairer Votes

    timfarron

    Below is the text of a speech made by the Liberal Democrat Party President and Chair of the Liberal Democrat Yes to Fairer Votes Campaign, Tim Farron. The speech was made on Friday 18th March 2011.

    We have a medieval voting system that has failed.

    It’s failed to give most people the MP they voted for, it’s failed to hold MPs to account, it’s failed even to do the one thing it was supposed to be good for – you know, delivering a majority single party government!

    First Past the Post has been past its sell by date for decades. It’s made for a two party system. It sort of still works in the USA, mind you, if they’d had fairer votes in the US 10 years ago, Al Gore would have defeated George W Bush and there’d have been no Iraq war.

    But this broken system is a complete anachronism in the UK where we have multi-party democracy.

    In 1951 Labour and the Tories got 97% of the vote between them.

    In 2010 they couldn’t even muster two thirds of the vote.

    Research has shown that the result of the last election was decided by fewer than 500,000 votes in a handful of constituencies that, by mathematical accident, happened to be marginal.

    That’s out of nearly 40 million eligible voters.

    That means that only one in every 80 voters actually mattered last year.

    That is a disgrace. How is that fair?

    Almost every vote cast at the last election didn’t really count. But the fairer votes referendum offers us the chance for change…and we must grasp it!

    Over the last two years we have had a political crisis. The reputations of MPs have been tarnished. No wonder a third of the population didn’t even vote.

    They didn’t vote because they knew it wouldn’t change things – their MP would get back in and nothing would change. Their life would carry on and their MP would continue to sit in Westminster and continue to pay scant attention to their concerns. Oblivious to life in the real world.

    We looked on in horror at the expenses scandal, tax payers funding MPs’ duck houses, moat cleaning and bell tower restoration…. and don’t let anyone tell you that all that was due to the expenses system.

    It wasn’t.

    No system forces anyone to fiddle their expenses.

    No, the expenses scandal grew out of an outrageous culture of complacency arising from an electoral system that gives MPs safe seats for life, no incentive to earn the support of their constituents and every incentive to go native and to stay completely out of touch with normal people.

    We should be angry about this and we should seize our chance to change it with both hands and seize it now.

    It seems nowadays parties only care about the ‘swing seats’ – the few constituencies that can change the outcome of a general election.

    In my constituency, Westmorland & Lonsdale, turnout was a massive 77%. I’m not going to claim complete credit for that! But at the last election, I was defending a majority of 267, and so the parties and the media paid particular attention.

    And local residents knew their vote could make a difference.

    My job is to continue to behave as though I did have a tiny majority, it would be an insult to my communities if I were to take my foot off the gas now.

    I won by 12,000 last May, but though I say so myself I had to earn it – and I couldn’t live with myself if I didn’t continue in that vane.

    But sadly Westmorland is just one of a few seats at the last election where your vote really could make a difference. I want everyone to feel like voters in Westmorland.

    Everyone deserves that.

    And now we have a chance to change things. We have a momentous opportunity ahead of us on May 5th – the fairer votes referendum.

    Electoral reform is finally within our grasp – for the first time in our lifetimes…. Voting yes on May 5 will send a message to Westminster that things need to change.

    That it’s not business as usual, that politics can and will change for the better.

    I don’t know if you’ve been following the antics of the No campaign, but the old Westminster establishment will say anything to keep business as usual. I think Westminster needs shaking up out of its complacency.

    A candidate applying for a job has to persuade the majority of the panel they are the best person, not just one of the three interviewers!

    AV means that MPs have to persuade the majority of voters they are the best person. Just like the rest of us applying for a job.

    And it’s easy. As easy as 1, 2, 3. The only change for the voter is that instead of just having to mark an X, you can choose candidates in order of preference, 1, 2, 3.

    It makes me suspicious that the No campaign seem to think that it’s good enough to use in electing the Tory Party leader, but not good enough for the rest of us to elect our MPs.

    You see AV is a small change that will make a big difference.

    And if you think its time that politicians listened to you, that they were forced to take notice, that they weren’t molly-coddled by an electoral system that keeps them safe from you and safe from defeat, then voting Yes to fairer votes is your chance to make that happen.

    Voting yes in May is not like voting in any other election.

    Voting yes in May will be the most positive and the most important vote you will ever cast.

    We have the chance to have fairer votes for everyone in Britain for the first time in our lifetimes but, if we lose, for the last time in our lifetimes.

    And we face an opposition just as determined as that which fought against votes for women in the 1920s.

    You see every generation has their harrumphing majors, desperate to prevent progress – we mustn’t give women the vote, it’ll lead to disaster, you can’t trust them, you know? The harrumphing majors of 2011 are in the No camp.

    They are reactionary, ridiculous but very well resourced – funded by the Tories, backed by the BNP, encouraged by the establishment.

    On the YES side we are building a progressive alliance – the Lib Dems, Labour, Greens, Plaid Cymru and even UKIP. But I wouldn’t call UKIP progressive…so let’s just call it a broad church then!

    Earlier this week Labour kicked off their part of the Yes to AV campaign.

    And as party president I welcome Ed Miliband to the campaign – he has decided to take a lead in his party and to fight for fairer votes and to become part of a campaign that extends well beyond politics, a campaign that is about reducing the power and privileges of politicians and putting that power in the hands of the people.

    Ed Miliband rightly said that AV will restore the balance of power in favour of voters.

    So we’ve got the Labour Leadership, the Lib Dems, the Greens, 38 Degrees, the SNP, Plaid Cymru, Joanna Lumley, Honor Blackman, Stephen Fry, Helena Bonham Carter.

    And on the No side? Norman Tebbit, Nick Griffin, David Cameron, and John Prescott.

    So I don’t know about you but that seems to me the worst possible guest list for a celebrity come dine with me episode, let alone a political campaign.

    Maybe they’re having their campaign strategy meetings in Margaret Beckett’s caravan!

    But seriously. If you are fed up with the way Britain is run, if you think politicians take too little notice of you, if you think your MPs should actually have to work hard to earn your vote, if you want your vote to count, and if you reckon that counting to three is something you can just about manage, then vote Yes.

    You have nothing to lose; but the establishment has everything to lose.

    A no vote on May 5, means an establishment rubbing its hands with glee on May 6, no need to change, no need to listen, business as usual.

    All the more reason to leave our anti-democratic voting system behind and choose to give yourself the power to choose.

    Stop allowing politicians to protect themselves from you through their safe seats.

    The British people deserve better, on May 5 they can get what they deserve.

    Yes to less power for politicians.

    Yes to more power for voters.

    Vote yes to fairer votes on May 5.

  • Nigel Farage – 2013 Speech to UKIP Conference

    Below is the text of the speech made by Nigel Farage, the Leader of UKIP, to the Party conference on 19th September 2013.

    Well, here we are. After twenty years. What an audience. Look at you. All that work. All those leaflets. Up at dawn. I know well those streets you have trodden. But you have done magnificently. And how it’s paid off.

    We are changing the face of British politics.

    Jane Collins second in Rotherham parliamentary by-election last year. 16 per cent up, second place, you have no idea what that did to them in Westminster! And in Downing Street it was even worse. Even better, I mean.

    Richard Elvin, in the North East came second in Middlesbrough’s parliamentary by-election and second in South Shields. They weigh the Labour vote in South Shields but they obviously use Imperial measures because Richard took UKIP from 0 to 25 per cent in three weeks.

    Diane James, second in Eastleigh’s parliamentary by-election. Over 11,000 votes – 24 per cent up. Close, so close. Next time, Diane.

    That’s the change.

    I said then we were overtaking the Lib Dems to become the third party in British politics.

    We’ve thirty thousand members and growing fast.

    Certainly by the time of the general election we’ll be the third highest-membership party in Britain.

    Every other party is fighting their decline.

    We’re delighted, they’re appalled; the commentators are amazed.

    In eight months’ time there are the European elections and the Council elections.

    UKIP will be standing in both sets, fielding thousands of candidates.

    I’m taking nothing for granted but I think we’re going to do well in the European elections. My ambition, my conviction is that we can come first and cause an earthquake.

    But I also believe that the Council elections may turn out to be more important.

    We made a breakthrough this year and we now have 227 council seats.

    I wouldn’t presume to make predictions about what May will bring. But we do want more – hundreds more.

    It’s possible. I think we can all feel it.

    On the doorstep we tell voters that UKIP councillors aren’t constrained by Labour or Conservative affiliations. They are un-whipped. Free to represent the interests of the community. To fight for the right for local people to have referendums on key local issues such as fracking and the building of wind farms.

    And what support we find out there. What eclectic support. Look at you!

    You did it. We did it. Everyone in this hall.

    When I heard MPs had voted against a strike on Syria. When I heard the Tories were voting for a referendum, I thought it again – we may not have MPs but we’re changing the face of British politics.

    Politicians in Parliament are listening not to their party whips but to their voters.

    It’s a change that’s been gathering force for twenty years.

    Part hope, part fear, part disillusionment, part engagement.

    When we launched our party just 17 per cent of British people agreed we should withdraw from the European Union.

    Today, that figure is 67 per cent.

    The British Social Attitudes Survey shows how much Britain has been moving UKIP’s way.

    On many different areas of our national life.

    On welfare – that benefits should be there for need, not as a lifestyle choice.

    On education – that grammar schools are a great engine of social mobility.

    And yes, on the European Union.

    Yes, on immigration.

    It’s the biggest single issue facing this country. It affects the economy. The NHS. Schools. Public services. The deficit.

    But the establishment has been closing down the immigration debate for 20 years.

    UKIP has opened it up. We need to. From the 1st of January next year the stakes are rising dramatically.

    Let’s have that debate! Openly. We need to talk about it!

    We are a nation that has always been open minded about immigration. But more people came to this country in one year, 2010 than came in the thousand years before it.

    I’m not against immigration. Far from it. Migrants have qualities we all admire. Looking for a better life. They want to get on. I like that. We admire that.

    So I’m speaking here as much as for the settled ethnic minorities as for those who have been here forever.

    Half a million new arrivals a year!

    It’s just not sustainable.

    Anyone who looks at it honestly knows it’s not sustainable.

    UKIP talks about it honestly. Directly. We’ve had a lot of stick for it.  Normal, decent people have been bullied out of the debate.

    Maybe that’s why none of the London commentariat has noticed what’s going on out there in Telford, and Aylesbury, and Kettering, and Buxton and Harrogate. It’s a long way from London. But all over the country, I’m getting audiences of five hundred or six hundred a night to talk about this.

    This debate has been filling theatres. And not with party members. On a show of hands 80 per cent are non-members.

    But they’re interested. They’re engaged. They’re concerned.

    These people aren’t disconnected from politics.  They’re disconnected from politicians.

    And UKIP is the only party that isn’t afraid to talk to them about it.

    So who are we? Who is the typical UKIP voter? I’ll tell you something about the typical UKIP voter – the typical UKIP voter doesn’t exist.

    When I look at the audiences in those theatres there is a range of British society from all parts of the spectrum. Workers, employers, self-employed. Big businessmen, corner shop owners. Well off, comfortably off, struggling. Young as well as old.  Not ideologues. Some left, some right, mostly in the middle. Some activists, some haven’t voted for twenty years.

    One thing many have in common: they are fed up to the back teeth with the cardboard cut-out careerists in Westminster.

    The spot-the-difference politicians.

    Desperate to fight the middle ground, but can’t even find it.

    Focus groupies.

    The triangulators.

    The dog whistlers.

    The politicians who daren’t say what they really mean.

    And that’s why UKIP attracts this eclectic support.

    Because when we believe something – we don’t go “are you thinking what we’re thinking”. We say it out loud.

    That’s why UKIP is the most independent-minded body of men and women who have ever come together in the name of British politics.

    Which presents occasional difficulties.

    We have some people with overactive Facebook accounts. And we have some who make public pronouncements that I would not always choose myself.

    Indeed I had the most blistering row with Godfrey Bloom in a Strasbourg restaurant the other day. He wants to fight for his beliefs and I was saying that we need to stick to the big messages. I don’t always agree on policy with Stuart Wheeler either.

    But, the essence of our recent success is our ability to push the boundaries of debate and with that, the national debate on many issues.

    If the choice is between our being browbeaten through political correctness to stay within the current received wisdoms or to be a party of free debate then be in no doubt we must be the party of radical alternatives and free speech.

    There is however one important qualification…

    We oppose racism. We oppose extremism. We oppose sectarianism of the left or right.

    We are the only party that bans the BNP from membership.

    I’ve got a card here which says what UKIP is, and in the first line, it says as strongly and clearly as it can be said, UKIP opposes racism.

    UKIP is a free-thinking, egalitarian party opposed to racism, sectarianism and extremism.

    UKIP is dedicated to liberty, opportunity, equality under the law and the aspirations of the British people.

    We will always act in the interests of Britain. Especially on immigration, employment, energy supply and fisheries.

    We know that only by leaving the union can we regain control of our borders, our parliament, democracy and our ability to trade freely with the fastest-growing economies in the world.

    And £55 million a day, incidentally, we get that back as well.

    A referendum to allow the country to decide this matter will create the greatest opportunity for national renewal in our lifetime.

    That’s us.

    Optimistic. Open to the world. The opposite of insular. Out there trading with countries that have growth rates of six, seven, ten per cent a year. Not hemmed in by the European Union – but open to the Commonwealth. Not headed by my old pal Herman Achille van Rompuy but by the Queen. Our real friends in the Commonwealth.

    Because the fact is we just don’t belong in the European Union.

    Britain is different.

    Our geography puts us apart. Our history puts us apart. Our institutions produced by that history put us apart. We think differently. We behave differently.

    I’m not giving you the Love, Actually version of what makes Britain different.

    The roots go back seven, eight, nine hundred years with the Common Law. Civil rights. Habeas corpus. The presumption of innocence. The right to a trial by jury. On the continent – confession is the mother of all evidence.

    Four years ago, Andrew Symeou was charged with manslaughter on statements extracted by the police and later withdrawn – taken on the European Arrest Warrant, held for 10 months in the most appalling conditions, detained in Greece for four years and then walked free when the prosecutor pulled the case. The European Arrest Warrant is an abomination to those of us who care about freedom and justice.

    And in some sense it was ever thus.

    The idea of free speech was a reality in England when Europe was run by princes with tyrannical powers.

    Throughout Europe, England was known as the land of liberty.

    Here you had the possibility of dissent. Of free thinking. Independent minds and actions. That’s us. UKIP belongs in the mainstream of British political life throughout the centuries.

    I always believed since 1999 that Britain was a square peg in the round hole I’ve come to realize something bigger than that. The union is not just contrary to our interests but contrary to the interests of Europe itself.

    The Commission has hijacked the institutions of Europe by adopting a flag, an anthem, a president, and through their mad euro project they have driven tens of millions into poverty.

    Their climate change obsession has destroyed industry across Europe, and their refusal to listen to the people will lead to the very extreme nationalisms the project was supposed to stop.

    We are the true Europeans. We want to live and work and breathe and trade in a Europe of democratic nations.

    But in the last ten or fifteen years this country has seen astonishing change. There has been a phenomenal collapse in national self-confidence.

    When we signed up to government from the Continent, most Britons didn’t know what they were letting themselves in for.

    Our laws have come from Brussels – and what laws. What directives. What a list of instructions. How this shall be done. How that shall be regulated. Process and compliance and inspection and regulation are taking over from production and leadership and enterprise.

    Financial services make up 10 per cent of the economy. It’s not just the City of London; it’s Southampton as well. Cardiff. Birmingham. Newcastle. And it’s insurance. Reinsurance. Stocks and shares. Futures. Commodities. Pension funds.

    It is totally irrelevant to this industry whether we have a Labour or a Tory government because their livelihoods are now regulated by a Frenchman who is no friend of ours.

    Parliament is reduced to the level of a large council. No one knows for sure exactly how much of our law comes from Brussels.  Could be 70 or 80 per cent.

    We have given up our concept of civil rights. Magna Carta, 800th anniversary the year after next, at the general election.

    Habeas corpus. Rights of inheritance. And not just for the aristocracy, as time went by.

    Our civil rights grew and kept pace with the times and expanded through the Common Law into the modern world – Europe has supplanted it with their Human Rights charter. While they can hold Andrew Symeou in Greece on trumped-up charges for four years – we can’t deport a rapist and murderer because he has a right to a family life.

    How did they do that to us?

    They lied to us. They had to. We’d never have agreed to it if they told us the truth and asked for our agreement.

    And it’s created a complete charade in our national life.

    All the parties now talk tough on immigration.

    David Cameron said he would bring it down to the tens of thousands.

    There are still half a million people a year coming in.

    Do you know, I really think they haven’t made the connection.

    I was in an immigration debate chaired by Nick Robinson. I started to talk about Europe, the rights of entry and residence that EU citizens have. He stopped me. No, he said, this debate is about immigration it’s not about Europe.

    That’s how deep the disconnect goes.

    Ten thousand a week. Half a million a year. Five million economic migrants in ten years coming to this country.

    Unprecedented. Never happened before.

    The effects are obvious. In every part of our national life.

    The strain these numbers are putting on public services.

    Schools. The shortage of school places in primaries and secondary schools.

    The NHS. The sheer weight of numbers that adds to the other problems of that

    Housing. Demand pushes up prices.

    Wages are driven down by the massive over-supply of unskilled labour.

    And from the 1st of January next year, the risks increase massively.

    The seven year period is up and nearly 30 million of the good people of Bulgaria and Romania have open access to our country, our welfare system our jobs market.

    How many will take advantage of that no one knows.

    The Home Office don’t have any idea at all. The previous estimate was 13,000 in total. Migration Watch thinks 50,000 a year. It could be many times that.

    No one knows. It’s no way to run a policy.

    And you can’t blame people wanting to come here.

    I don’t blame them.

    I’d come here myself if I was in their position.

    So would you. Anyone would be tempted.

    In Bulgaria and Romania, average earnings are a fifth of ours.

    The purchasing power of £20 of child benefit a week is five times over there what it is here.

    So consider a family of mum, dad and three children. They’re going to think, let’s send Dad over to get work in Britain. That enterprising and industrious fellow can come here, find a job, and be eligible for child benefit for his three children – even though they aren’t living here.

    £60 a week – with the purchasing power of five times that. Sent back to Romania or Bulgaria. What an incentive. What a draw. What a pull factor, as they call it in immigration circles.

    And while you can’t blame them – is it fair? Is it fair for the people who are already here in this country. Who’ve paid in to the system?

    That migrants can come and immediately start drawing benefits?

    When we, the host country, is strapped for cash, when youth unemployment is at a million, when the NHS is groaning and the deficit is a burden on every family?

    I know it isn’t fair. I know it isn’t right. And I know there isn’t a thing the Government can do about it.

    There is an even darker side to the opening of the door in January. London is already experiencing a Romanian crime wave. There have been an astounding 27,500 arrests in the Metropolitan Police area in the last five years. 92 per cent of ATM crime is committed by Romanians. This gets to the heart of the immigration policy that UKIP wants, we should not welcome foreign criminal gangs and we must deport those who have committed offences. Mr. Cameron, Clegg and Milliband are you listening?

    If they are listening there’s not a thing they can do. They are tied up in the cat’s cradle of EU laws, regulations, directives and treaties.

    The only way this can be dealt with is by leaving the EU.

    Not prolong the agony. But leave, and leave soon. That’s what UKIP has been arguing for twenty years and what an increasing majority of the British people are – with very good reason – coming to believe as well.

    Sixty seven per cent. Research suggests that 67 per cent of Britons now support leaving the Union.

    I’m not sure how carefully everyone has thought this through, so let me say a little about what life outside the Union looks like to me.

    I believe that leaving the Union and reclaiming our destiny will create the most exciting opportunity for national renewal in our lifetime.

    At the most basic level we get back £55 million a day. It adds up. It’s £20 billion a year. We could reduce the deficit. We could reduce corporation tax to 10 per cent. Give us the most competitive and attractive business taxes in the western world.

    We get our money back.

    We get our borders back.

    We get our Parliament back.

    We get our fisheries back.

    We get our own seat in on the bodies that actually run the world.

    We get back the ability to strike free trade deals. We can abolish tariffs on African produce and do more to raise living standards there than any amount of aid.

    There are those who say we can’t go it alone. That our global influence will decline because we are small.

    Those are the true voices of Little England. We speak for Great Britain.

    No longer bound into an ageing and increasingly arthritic trade bloc where growth of 2 and 3 per cent is an ambition.

    Instead, the world. The Commonwealth. Trading with Brazil, Asia, the Commonwealth where growth rates in double figures will bring wealth back to this country.

    No more relying on debt-fuelled booms to get things going. No more growth through credit card excesses. We earn our way to national prosperity by free trade with the world.

    And just to counter the scare stories the status quo put up to frighten people back into line, I’ll tell you what won’t happen.

    Those ten thousand trucks a day coming in from the continent bringing goods into this country. They won’t stop coming.

    The £25 to £35 billion trade surplus the rest of Europe runs with us. That’s not going to stop.

    The idea that the EU will start a trade war with Britain is simply not credible.

    The real reason the EU won’t be able or willing to stop trading with us is that the German car industry won’t allow it. I just can’t see Mrs Merkel explaining to Mercedes that they’re not going to be selling into Britain any more.

    It’s not going to happen.

    Leaving the Union will give us our country back and open a door to the world.

    We are changing the face of British politics and all our arguments are gaining traction. In rhetoric the other parties are attempting to move in to our territory but without the slightest intention of delivering.

    So Mr. Cameron wants a referendum … well we’ve heard it all before with his “cast iron guarantee” and we don’t believe that he is sincere. The use of the word renegotiation is no more than a cynical tactic to kick the issue into the long grass after the next election. I have no doubt that Labour and the Lib Dems will do exactly the same thing. They all promise a referendum at every General Election and renege on their promises.

    But the next election is not, as you would believe reading the newspapers, in 2015. The next election is on May 22nd 2014, the European Elections.

    They offer voters a chance to really express their view without worrying which lot get in to Downing Street.

    The campaign will be dominated by open door immigration to Eastern Europe. If the coalition wants to save their electoral skins they must, before January 1st, tell Brussels that we will not unconditionally open our door to Bulgaria and Romania.

    That is my challenge to them. If they ignore it then we must turn the Euro Elections into the referendum that we have not been given.

    Let’s make May 22nd as our referendum on EU membership, let us send an earthquake through Westminster. Let us stand up and say: Give us our country back!

  • Michael Fallon – 2014 Speech at Eurelectric Dinner

    michaelfallon

    Below is the text of the speech made by Michael Fallon, the Energy Minister, on 2nd June 2014.

    Introduction

    It is a pleasure to be speaking at an event that is focusing on a key challenge facing Europe.

    This is a crucial time for EU energy policy. Recent events have brought into focus the importance for all our citizens of energy security. In gatherings such as this there is often very fashionable talk of the so-called trilemma that posits security, affordability, and decarbonisation at opposite points of the triangle. This is false geometry. Without secure, affordable energy we will not be able to move to a more sustainable, lower carbon energy future.

    A Common approach

    The Rome G7 Energy communique set out with welcome clarity what we need to do as a Union and as countries to strengthen energy security – more home-grown energy, reducing energy demand, diversifying supplies and supply routes, and building the missing internal energy infrastructure and integrated markets so energy in all forms can flow smoothly and freely.

    It is vital that we use this momentum to inform decisions that are needed on our objectives for 2030. By acting now we can give investors the certainty they need to commit the enormous sums of money required to modernise and reinforce the EU’s energy infrastructure over the next decade.

    This evening I want to focus on the priorities the UK sees for the EU –

    First, taking full advantage of the benefits that a single EU market in energy has to offer.

    Second, we need to maximise home grown energy sources and diversify supplies.

    Third, the 2030 package needs to be a driver of competitiveness that benefits consumers and industry and allows member states to determine their own energy mix and to decarbonise at the pace best suited to their economic situation.

    Single market

    A well-functioning and integrated internal energy market in electricity and gas will be a critical part of ensuring security of our energy supplies and in keeping energy costs down.

    By opening up and integrating markets across national boundaries, we can increase competition, access the cheapest energy and reduce the level of back-up generation needed.

    The benefits of a single market are clear and undisputed. So, we must ask what we need to do to achieve them.

    The European Council has already agreed that the internal energy market should be completed by 2014. This is something the UK strongly supports.

    This means full and effective implementation of the Third Package in every Member State. It also means agreeing on key technical rules aimed at removing the remaining barriers to cross-border trade.

    On top of that, Europe need much more investment in interconnection to better link markets.

    If we can seize the opportunity we can deliver a more resilient and competitive energy market.

    Home grown sources

    To deliver these benefits we need diverse sources of energy. We have an abundance of energy resources that it can, and must take advantage of.

    That means that exploiting the full use of all energy technologies, from shale gas to renewables, from nuclear to shale. We should not any longer be ideological about energy.

    Renewables play, and will continue to play, an important role both in the European energy system and here in the UK. Through the Levy Control Framework this government has set out support through to 2020; with many countries making retroactive changes and reducing their subsidies, our move is unparalleled.

    In addition to renewables, new nuclear is critical for the future. The UK has already attracted significant levels of investment into the new nuclear build programme. We reached agreement with EDF on the key terms of a proposed investment contract for the Hinkley Point C nuclear power station. We are now working closely with the European Commission on the Hinkley state aid investigation.

    Given the continuing need for gas, we cannot afford to ignore the potential for domestic less sources. The development of shale gas in Europe could reduce our reliance on imports, could place downward pressure on energy prices and it could support the move away from high carbon fuels.

    So we are very pleased that the Commission responded to calls from the UK and other Member States to adopt a proportionate approach on the regulation of shale. We are conducting a study with Poland on the impact of shale for our countries and the whole EU which I hope will inform the new Commission and the new Parliament on the need to incentivise exploration, rather than bureaucratise.

    Diversify sources

    We will, of course, continue to need to import energy into Europe for the foreseeable future. Diversification of routes and sources of gas supply to the EU is an important element of the EU’s energy security policy. In that context I was delighted to hear – earlier this year – of the Final Investment Decision for the development of the Shah Deniz II gas field in Azerbaijan. This means that the Southern Corridor bringing Caspian Gas via the Trans-Adriatic pipeline to Europe is a significant step closer.

    The Southern Corridor itself will help to improve Europe’s competitiveness, by providing consumers and industry with a new gas import route and supply source, increasing the continent’s energy security, bringing more competition our market.

    2030 Framework

    What we saw in the European Elections was voters reacting against a European Union that they consider to be heading in the wrong direction. We need an approach that recognises far more sharply that Europe should concentrate on what matters, on growth and jobs.

    And it is that message which must be reflected in the framework for 2030 – 2030 must be a driver for competitiveness and resilience that secures investment in a diverse and low carbon technology base.

    Signing up to yet more targets, irrespective of the impact on consumers and business, would be, in our view, deeply irresponsible. That is why we support greenhouse gas emissions reduction target without a binding renewables target.

    As I said, Member States must be free to choose the least cost pathway that they determine as appropriate.

    And in cutting emissions Members states too must retain the flexibility to take action at their own pace – to go no slower and no faster than other European countries if they so wish.

    Conclusion

    In conclusion, I would like to share three thoughts.

    The importance of energy to our way of life means that keeping it secure is not an option- It’s an imperative.

    Secondly, energy is not limited to national borders. Our energy security challenges are best addressed together.

    Thirdly, we can only speculate on and not predict the future. Costs of technologies change, as do national circumstances. We need to be ambitious in our objectives, but we must be flexible in how we meet these.

    So I think this Convention comes at a crucial time. The next few weeks and months will be important in setting the future direction of the EU energy and climate policy; we, the UK, will play a full role to ensure ambitious climate targets, enhanced energy security and above all strenghten EU competitiveness.

    Thank you.