Tag: Speeches

  • Liam Fox – 2002 Speech to Conservative Spring Forum

    Liam Fox – 2002 Speech to Conservative Spring Forum

    The speech made by Liam Fox, the then Shadow Secretary of State for Health, at Conservative Spring Forum on 23 March 2002.

    Hardly a day goes by without further evidence coming to light indicating that, under Labour, the NHS is failing. Dirty hospitals with high infection rates for patients. Cancelled operations leading to rising waiting lists. A care home crisis resulting in bed blocking, with frustration for patients and demoralization for medical staff.

    Yet, despite this bleak picture under a Labour government that promised so much, the public remains ambivalent about the NHS. At the same time as rising intellectual criticism about the quality of the service, there remains a strong emotional attachment to the institution itself. There is therefore both a demand for change but a suspicion that change may threaten the aspects most prized by the public, such as a service free at the point of use for those who need it.

    Complicating the picture is the fact that some of the harshest criticism of the NHS comes from those who were previously its fiercest defenders. Often, the combination of their own unhappy experiences and an increased awareness of better healthcare overseas has persuaded them that the NHS is not the only model capable of producing the quality and security of access they seek.

    It has been a serious handicap in the health debate in the UK that the terms “healthcare” and “the NHS” have for too long been politically synonymous. Only recently have events conspired to promote change, for example a Labour Government being forced to have British patients treated on the continent because of the explicit failures of the NHS. This backdrop provides a rare opportunity to open up a better quality discourse. That debate needs to begin with a clear understanding about the origins of a peculiarly British approach.

    The National Health Service was a product of the 1940s – that is of a collectivist era. Central planning was high fashion, as was the notion that state control was the best way to achieve change. This is unsurprising. The War had seen a massive increase in state regulation, which had been tolerated in the interests of victory. Austerity and rationing were necessary and accepted concepts.

    Now, 60 years later, we find ourselves in an era of affluence which the founding fathers of the NHS would not recognize. In 2002, austerity is no longer fashionable or necessary. Yet much of the British public have been willing to tolerate just such austerity in the field of healthcare. It is almost as if inadequate provision has been accepted as a classic case of Britain “muddling through”, with the Dunkirk spirit its guiding force.

    Increasingly, the patience of patients is wearing thin. There is a growing demand for the standard of healthcare befitting the World’s fourth richest country. We are no longer a nation emerging from the ravages of a War that almost drove us to extinction. It is no longer acceptable for the public to be constrained within an NHS that does most things quite well most of the time. What is needed, and increasingly demanded, is a system that does many more things very well all the time.

    Politically, Labour has been the party most wedded to the politics of the 1940s. But even they have been forced to abandon most of their discredited ideological positions from that era.

    On the economic front, they have retreated before reality. They no longer have Cabinet Ministers whose sole responsibility is Food or Prices. The major nationalizations have been overturned. Trades union reforms and labour market liberalization have brought prosperity and individual emancipation in the economic sphere.

    In the social sphere, however, individuals are still much more at the mercy of the state. Labour fought tooth and nail against Margaret Thatcher giving council house tenants the right to buy their own homes. In education, too many children pay the price for Labour’s obsessive centralisation, while in health, Labour deny people the right to choice and diversity taken for granted in so many other countries.

    Labour supporters cling to the NHS like a comfort blanket, because, in every other facet of policy, they feel that the Labour Party has abandoned its roots. The NHS is the last remaining manifestation of the Attlee government, of the era when Labour believed they had all the answers. But the NHS was never even the Utopia Labour like to portray. Within a few years, they were retreating from their New Jerusalem, with charges for spectacles and prescriptions, thus creating the service which Tony Blair describes as “largely” free at the point of use.

    The NHS, as an institution and not merely as the expression of a set of ideals, has thus acquired a totemic identity in the eyes of Labour politicians which has little to do with healthcare. Its continued existence in its present form owes more to the complex psychological needs of a Labour Party which is no longer a socialist party in a world where socialism no longer has a place.

    The NHS has now become the fig leaf for New Labour’s vapid core. Indeed, it is just about the only thing that allows Labour activists to live with their consciences, their Party having thrown virtually every other Labour nostrum over the side of HMS Blair in search of the rhetoric to please the focus groups. Politically, the NHS is now the ventilator on the Labour Party’s own life-support machine.

    And the joint victims in this tragedy are the patients, denied the care they need, and the medical professionals, unable to provide what they have been trained to do. The NHS, under Labour’s model, pursues equality of access at the expense of excellence, and seems almost to accept mediocrity as a manifestation of social values dating from “the golden collectivist era” of the post-War world.

    So, the first problem which Labour are landed with is that the NHS is over-centralized and over-politicized.

    For Bevan, this maxim was in full accord with the ethos of the day, and entirely deliberate. He thought it vital that he should be able to hear the crash of every bedpan from his office in Whitehall. This was why he rejected the proposal from the original Beveridge Report that the existing system of mixed healthcare provision should be retained, and instead nationalised virtually the entire system overnight.

    Successive Labour Health Secretaries have followed the script for the NHS which Bevan wrote in 1948, all determined to run the Health Service from behind their Whitehall desks.

    And, despite its focus group-friendly lexicon, New Labour’s grip on the healthcare system has been similarly vice-like. Time and again, they have brought clinical and political considerations into direct conflict. Ministers have swept aside concepts of clinical priority in favour of their own insatiable PR agenda. Professional freedom is suffocated, and ethics take a back-seat, as clinicians and managers are pressurised into making the political health of the Government, rather than the health of their patients, their main consideration.

    Examples of what this means for the patient are legion. There can be no clearer illustration than Labour’s hugely discredited waiting list initiative.

    This policy has been roundly condemned in most quarters for encouraging clinical distortion, as a result of which patients with more serious conditions actually wait longer while simple, less urgent cases are dealt with more quickly to bring numbers down. It has been pointed out, quite rightly, that this abandonment of the principle of treatment being undertaken on the basis of need has undermined the entire ethical and moral principles which the NHS was supposed to embody.

    It is entirely consistent with the narcissistic nature of New Labour that they are more concerned with how things appear than how they really are.

    Waiting lists are controlled by restricting the numbers of patients who get to see their Consultant (it is only then that their official waiting time starts). Thus there is a huge rise in the waiting list for the waiting list. Patients are still waiting in pain and fear in increasing numbers. But Ministers can claim to have met their targets.

    Systematic and widespread fiddling of the figures takes place. Consultant to consultant referrals are not counted. Patients who refuse a specific date or refuse to answer letters become “administratively” removed irrespective of their real problems.

    Only recently, a GP friend told me that he had just returned from holiday only to find that his daughter had been taken off a waiting list because, while they were away, the health authority sent a letter saying, “If you don’t write back within seven days, your name will be taken off the list.” Now she has to go back to the end of the queue. What sort of system is that?

    In another hospital, the maxillofacial surgeons were forced to add patients to the waiting list and give a date of 23 December for treatment, knowing that no patient would volunteer to go in for facial surgery so close to Christmas. Those patients were therefore taken off the waiting list.

    In March last year, the British Medical Association described the situation where ‘Artificial targets imposed on an overstretched service cannot be met without resorting to ingenious massaging of the figures. It does not fool, nor does it help, patients’.

    But it is the reaction of the Blair Government to exposure by the National Audit Office of fiddled waiting list figures that is most instructive.

    As you would expect, the Prime Minister tried to understate the issue, telling the House of Commons that:

    “It is important to put this matter in perspective. Over a period of four to five years, 6,000 people were misallocated on the lists.”–[Official Report, 19 December 2001; Vol. 377, c. 281.]

    Only 6,000! They are not mere statistics; they are real people, sick people. This outrage is, in my view, one of the greatest stains on this Government’s record and it is a direct result of the mindset of New Labour.

    One of the hallmarks of Labour’s stewardship of the NHS has been their clear intent to ensure that as many party political poodles as possible are in positions of NHS authority. Against the entire ethos of public service, Labour have ensured that appointments are made not on the basis of what individuals can bring to the administration of health care, but the loyalty they will bring to their party political masters.

    When Dame Rennie Fritchie was confronted with the evidence, she concluded that there were, indeed, an unacceptably high proportion of appointments made to Labour Party supporters. In the wake of this, the so-called Independent Appointments Commission was introduced. What difference has this made? In response to recent Parliamentary Questions, the Government has revealed that the proportion of Labour Party appointees has actually increased! In fact, this is little wonder. Although the Appointments Commission itself is supposedly independent, it is appointed by the Secretary of State.

    When Labour came to power in 1997, they promised to put more money into the health service by cutting administration. In practice, quite the reverse has happened. We now have the situation where, for the first time in the NHS, the number of administrators is actually greater than the number of beds. We have the absurd situation of having 1.15 administrators for every NHS. Under Labour the number of beds has fallen by 16,000 and the number of administrators has increased by 27,000.

    This problem is made worse by the fact that the increase in administration has largely been accounted for by people whose role is to make the system still more centralised. In other words, we have reached a position in which the NHS as a whole is over-bureaucratised, but individual Trusts might well be under-managed. The main reason for this is the constant interference, in the form of Ministerial circulars, and the resulting obsession with targets in the system.

    Under New Labour, if it moves it must have a target. The predictable result of this has been the emergence of target-orientated behaviour amongst hospital managers, whose job primarily is to meet centrally-set targets, irrespective of what this means for the running of their hospitals or the impact on the patients.

    We have seen the ridiculous situation where patients have been kept in ambulances outside Accident and Emergency Departments because their waiting time does not officially begin until they are clocked in to the A and E Department itself. This enables hospitals to meet their Accident and Emergency waiting time targets. But it makes no difference to the patients themselves. Likewise, when hospital trolleys have their wheels taken off, they technically become a bed – so, by the most bizarre manipulation of their own equipment, hospitals are again able to reach the Government’s targets with no benefit whatsoever to the patients.

    Perhaps most distressing of all is the concept of redesignation of parts of hospitals. Outsiders simply cannot comprehend that corridors could be redesignated as wards, with the result that, technically, patients are not waiting in corridors. Such cynical and essentially dishonest behaviour brings shame on those who have demeaned their own professional status by doing such things and denies patients the level of care and dignity they have a right to expect.

    There can be few organisations that will rival the NHS for sheer ability to waste resources. Almost unbelievably, the Head of Controls Assurance at the NHS, Stewart Emslie, identified £9 billion of waste in the NHS in 2001 – almost 20% of the entire budget. Amongst the items of waste that he mentioned were £2 billion as a result of bed blocking, between £1-3 billion of fraud and theft, over £1 billion wasted by hospital acquired infections, £300-600 million on medication errors, £300-600 million on wasteful prescribing, £400 million on clinical negligence and £100 million on avoidable management costs.

    It is inconceivable that any Chief Executive Officer of a major company would be able to hang on to his job, given such gross and unacceptable diversion of vital resources. Yet this is a system into which, with characteristic failure to understand the root problems, Labour is simply proposing to pour further huge sums of taxpayers’ money.

    The Prime Minister told us on the BBC’s recent NHS Day that more taxpayer’s money will have to be pumped into the Health Service. He is ignoring all the evidence if he believes that this alone will be the answer to the system’s problems. Labour has already spent considerably more in real terms, but to no effect.

    A Surrey consultant, Peter Williamson, recently told Hospital Doctor:

    ‘The Government claims it is putting great sums of money into the system – but this money is seldom seen by the people inside the service’.

    Experts at the King’s Fund have highlighted how the Government’s extra funding has had little impact on activity levels. They said:

    ‘The implication is that any reduction in the waiting list in the last three years has been achieved not through treating extra patients, but through fewer people being placed on to the waiting list each year. The figures show that there has been a fall in the rate of increase in NHS activity, despite a large increase in funding for the NHS.’

    Things are so bad that, despite a 30% increase in real terms in the level of health spending over the last three years, there was actually a fall last year in the level of NHS activity.

    We do not need to look far to see that spending alone is not the answer. Wales and Northern Ireland are already above the Institute of Fiscal Studies target of 8.9% GDP and Scotland is above the Government target of 8%.

    Yet in all parts of the UK the health service is failing, even in Northern Ireland, where spending is commensurate with France. Although Wales and Northern Ireland have higher spending than England, they also have longer waiting lists.

    From a significantly higher baseline, expenditure in Scotland is rising, but things are still getting worse. For example, over the period from 1999 to 2001, there has been a marked increase in the number of people waiting for treatment, patients are waiting longer for treatment and fewer patients are being seen. And over the last year, the number and rate of nurse vacancies has also risen.

    Despite higher spending in Scotland, a third more people die of heart disease and 40% more people die of lung cancer. It is clear from across the UK that the problems of the NHS monolith cannot be solved by simply throwing in more taxpayer’s money.

    “No more for the NHS until it gets better” the Chancellor told the Sun. Did we miss something? What event has occurred to justify the billions extra about to be spent? For, rest assured, billions more will be spent while mere tinkering goes on.

    Despite endless upheaval, very little will change in the NHS. The New Labour oxymoron of “earned autonomy” means “you can do what you want but only if it’s what we tell you”. The latest legislation gives many new powers to Whitehall to control activity in the NHS. For example, the Secretary of State will set all the budgets of the new Primary Care Trusts, and can withhold funds if they fail to meet his performance criteria.

    Talk of commissioning powers and the emergence of strategic health authorities makes many wonder if Labour are simply recreating the internal market they abolished in 1997, having wasted five years and countless amounts of money in the meantime.

    Labour’s relationship with the private sector is equally dysfunctional. They have alternated between support for a monopoly provider, a full partnership and a short-term expedient. The position, of course, depends on the audience, not the analysis. What is clear, however, is that the policy will have nothing to do with choice.

    Of all the failings in Labour’s approach to health, perhaps the greatest is their failure to understand the value of individual choice.

    From the moment a patient first experiences symptoms, their route through the healthcare system will be plotted by someone else, taking no account of any preferences he or she might have. And at all stages along that route, the patient will be within a system which is State-owned and State-run.

    The fundamental and inevitable failings of such a centralised and politicised State monopoly system manifest themselves from the very outset.

    The patient’s first point of contact is with their GP. They have little, if any, choice over who this is, they will belong to a “list” and the Government will regulate and restrict the number of GPs in any one area.

    If their condition warrants it, the GP refers the patient to a consultant. Needless to say, they don’t have any choice over which hospital the consultant works at, let alone that consultant’s identity. Their time of treatment will be dictated to them, and with increasing frequency may be cancelled. If they fail to observe all the rules set they will go to the back of the queue.

    What century is this? Why is it that the consumerist culture is entirely absent from our State healthcare system? The assumption seems to be that patients exist to service the system, rather than vice versa.

    Without giving greater control to individual patients over their own medical and surgical treatment, there will never be a liberation from the unacceptable position of the State holding the whip hand.

    As in so many other areas, the problems faced by our public services can be traced back directly to the very ethos of New Labour. Like the Clinton Administration, its project is about coming to government and staying in government, not about what to do when it is in Government. Policy consequently is replaced by endless reports and reviews. It is little wonder that a senior United States official was quoted recently as saying that Tony Blair seems more concerned about finessing a problem than dealing with it. How very perceptive.

    Any given problem is exacerbated by the fact that the Government has no core beliefs at all. One minute they will call for a monopoly NHS, another a public/private partnership or even full-blown private sector involvement. What they say depends entirely on the audience.

    This is a Government of intellectual incoherence, inconsistency and incompetence, in which the Prime Minister becomes ever more detached. And in doing so, he appears to grow increasingly contemptuous of his party – it seems to exist only to glorify the cult of his personality, spawning a Ministerial culture of blame, spin and re-announcement. When things go wrong, they are happy to blame the professionals, their predecessors in government, the Third Way – anyone but themselves. If that fails, they set new targets, shift deadlines and commission new reports. They stand for nothing, but will say anything.

    The public have instinctively trusted Labour on health, but their hopes are being, and will continue to be, shattered. The NHS is not delivering what it should. Despite a huge increase in resources, the NHS actually saw the number of patients treated last year fall. Waiting lists are rising. The crisis in care homes threatens to turn care in the community to neglect in the community. The number of cancelled operations is soaring. Hospital acquired infections are at record levels. Morale continues to plummet in the caring professions.

    Labour’s response is to pour in more taxpayer’s money and tinker at the edges of the NHS. Sadly, they will not succeed. The NHS is a collectivist model in a consumerist world. It is over-centralised. It is over-politicised. It is over-bureaucratised, yet under-managed. It is obsessed with targets, but failing to meet clinical need. It is wasteful; and spending and outcomes have increasingly become disconnected. Only the dedication of its staff keeps it afloat. Labour will fail because they will not accept these things.

    Without a historic depoliticisation and decentralisation, coupled with increased choice for patients, Britain will be consigned to second-rate healthcare.

    A solution will require a Conservative prescription. Tony Blair was right on one thing ” Britain deserves better”. Five years on, it is clear that this cannot come from Labour.

    I once likened the approach of the NHS to asking Dickensian peasants to queue up for their gruel, and to say thank you because there was nothing else on offer. Like Oliver Twist patients want more. It is what they deserve. But not just more of the same.

  • Eric Pickles – 2002 Speech to Conservative Spring Forum

    Eric Pickles – 2002 Speech to Conservative Spring Forum

    The speech made by Eric Pickles to Conservative Spring Forum on 24 March 2002.

    Stephen Byers is a misunderstood man.

    Some think that stands for whatever is perceived to be fashionable in left wing politics, that he has betrayed his Marxist past. This is to misunderstand the man completely. I have known him a good many years and I can say he is utterly consistent in his devotion to Marxism.

    Of course it is not Karl Marx his principles are based on. It is Groucho Marx.

    Specifically Groucho’s attitude to ethics: ‘These are my principles. If you don’t like them I’ve got some others.’

    That is why Mr Byers can move from 80’s rabble-rouser, to 90’s smoothy-moderniser, from millennium-man advocate of the third way, to pronouncing the death of the third way, with the ease and the speed that the Department of Transport change their press officers.
    As Secretary of State, if your idea of long term planning is to survive the censure motion after next, it is little wonder that the Government’s transport policy is so directionless.

    I was recently asked what enthusiasm I had for the Government’s ten-year transport plan. I replied that I was so enthusiastic I was seriously thinking of ways I could enter year three onwards for the Whitbread prize for fiction.

    Labour had the opportunity to consolidate the gains made from the privatisation of Railtrack under the Conservatives. We reversed the long-standing decline in passenger numbers, investment poured in and our railways had a better safety record. Instead Byers blew it with a botched renationalisation. That will cost the travelling public dear.

    Remember a third of the promised railway investment is meant to come from private sector funding. It is frankly ridiculous for the Government to argue that that the private sector investment has not been affected following their decision to confiscate a company from its legal owners.

    Any lingering doubts remaining over future relations between private finance and Government were dispelled by the letter to the Chancellor written by over twenty top fund managers saying that Labour’s handling of Railtrack has damaged relations between the Government and the City, increased the cost to the taxpayer of public private partnerships and discouraged people from saving.

    In other words on every length of road, stretch of track, new hospital or school building – anything that needs private finance there will be a Byers premium. We will all pay more to get less

    Anybody who cares about our Railways will tell you what we need to do to make life better: get Railtrack out of administration, stop dithering over the approval of rail franchise renewal, because if you don’t there will be no new trains after 2004. Do that and we can deal with the number one problem facing our railways a lack of capacity to meet any significant increase in demand.

    Transport is full of acronyms: SPV’s, Infroco’s, NATS and, of course, PPP. Rarely does the acronym meet the reality. This is true with the PPP for the Tube. Forget Public-Private Partnership, in London PPP stands for Poor Prospects for Passengers.

    Poor prospects of seeing a new train in ten years. There are only 12 new trains in service on Tube by 2008.

    Poor prospects for projects due to start ten years into the thirty year project, with the Government offering no stability for funding.
    Poor prospects for the taxpayer: despite promises we still don’t know whether the PPP is value for money, and we still don’t know when things go wrong who will pick up the tab.

    Poor prospects for overcrowding: the PPP will make no significant improvement.

    If over Easter you decide to visit London and decide to join Londoners on a sweaty, smelly overstuffed tube carriage, ten years from now were you to repeat the journey chances are it will be the same. Chances are it is likely to be the same carriage; the only difference will be the carriage will be ten years older.

    We will inherit a terrible mess on the London Underground. To make life better we will seek to develop a series of quality contracts with Transport for London on: punctuality, reliability, cleanliness and safety (personal and public). We will ensure a no strike agreement operates on the tube. The closing down of the network has no place in the resolving of industrial and sometimes petty disputes in modern Britain.

    We are now rapidly approaching an important milestone to judge this Labour Government, laid down by no less a person than the gentle and serene Deputy Prime Minister.

    After the 1997 general election, John Prescott said, ‘I will have failed if in five years time there are not … far fewer journeys by car. It’s a tall order but I urge you to hold me to it.’

    Since 1997 traffic on all roads has consistently increased. Estimated traffic levels rose by 3% between the fourth quarter of 2000 and the same quarter of 2001 alone – according to official DTLR figures.

    We will be looking for volunteers to break this news to Mr Prescott. A fast car and an ability to duck will be an asset

    Labour and their “me too” lackeys the Liberal Democrats see the car driver as the enemy. Someone to be despised pilloried and above all taxed.

    Fuel tax is still the highest in Europe. At the last count the average UK retail price of diesel was over 20 pence per litre more expensive than any other EU country. It is worth re-emphasising that the pre-tax price of both fuels was among the cheapest in Europe, but the total amount of tax per litre was the highest of these countries

    New taxes are introduced on company cars, but ministerial cars are of course exempt. Nothing must disturb the air conditioned splendour of the New Labour elite, free from the care of the day to day bustle the rest of us face.

    Recently in a debate, I asked a Minister when was the last time he travelled on the tube during peak time and whether he enjoyed it? The question was so unexpected in its impertinence that I got the shocked response that he ” could not remember.” That would be a sad admission from any Minister, but from the Minister of Transport it was shameful.

    Much needed relief roads lie abandoned. Motorways that would take traffic away from chocked towns are neglected. The number of miles of motorway opened each year has significantly declined under the Labour Government. In 1997, the last year Conservatives were in government, Britain’s motorway network increased by 42.3 miles. In 2001, it increased by a paltry 6.1 miles.

    Talk to any of New Labour’s advocates of congestion charging after a few polite pleasantries about inter-model shift from car to public transport and they go onto the real agenda. For the truth is this: if there was even a modest shift away from the car towards buses or trains, our public transport system could not cope. There is not sufficient capacity.

    No, what Labour’s transport gurus want is a reduction of journeys, principally by people on low incomes. According to them poor people can’t have cars.

    To make life better on our roads there needs to be a bigger dose of reality and recognition that the car and the lorry are a help, and not a hindrance, to an integrated transport policy. Indeed they are vital to many people in rural areas, many elderly, disabled and parents with young children.

    Over the coming months we will look at getting the best out of our road space. At getting the best out of better lane management, better repair management, better use of technology. We will look at innovative ways of providing public transport with some of the flexibility that private transport has.

    We understand that people will not leave their car at home until personal safety is improve on buses and trains, pupils will not return to school transport until better supervision and safety provided.

    Above all we understand that we have to integrate our transport policy into the way people live their life, rather than how some cloistered transport boffin thinks they should. Our policy will be firmly grounded in reality, with a determination to repair the damage inflicted by Byers and to make our transport system better.

  • Oliver Letwin – 2002 Speech to Conservative Spring Forum

    Oliver Letwin – 2002 Speech to Conservative Spring Forum

    The speech made by Oliver Letwin to Conservative Spring Forum on 24 March 2002.

    Almost every day our newspapers and televisions carry stories of horrific crimes.

    Almost every day we hear the anguished voices of these victims of crime asking what is to be done.

    The failure to tackle crime has given rise to pessimism and despair.

    I understand that pessimism but I do not share it.

    Sometimes in life you are privileged to witness astonishing achievements. Two weeks ago I had that privilege.

    I visited a city. I met individuals who were determined to transform the life of that city by drastically cutting crime. I visited a police force whose morale was second to none.

    A city whose Mayor and Commissioner of Police had the political vision – against the prevailing consensus at the time – to put the police on every street and to ensure that they became custodians of their neighbourhoods.
    A city which has given the streets back to its citizens by dealing with every manifestation of disorder, whether it be simple graffiti, youth offending or drugs.

    That city was New York.

    New York used to be like many parts of our cities.

    Places where street crime, social disorder and violence has become the norm rather than the exception. Places where criminals are not often brought to justice. Places where the police are demoralised because of interference from politicians and bureaucrats.

    It was not always like this in Britain. Violent crimes were not unknown in 1956 when I was born. But they were not so frequent that the papers had a fresh tale of terror for every edition. It was not the case that children carried knives or that drug deals were done in the playground. Women were not dragged from their vehicles by carjackers. No one even knew what carjacking was. Indeed there was little fear of theft of any kind. When a man who later became my neighbour on the Wandsworth Road in London left money for the butcher and the baker in a drawstring bag hanging from a latch, it was not stolen and he didn’t expect it to be stolen.

    Something has changed in our society over my lifetime. When I was born, there were 68,000 police officers and less than 500,000 crimes a year. Now there are 127,000 police officers and 5 million crimes a year.

    There are those that assure us that the tide has now turned and use the survey statistics to make their case. But most people in this country do not believe the survey statistics. Most people think street crime is rising. And the statistics for reported crime suggest they are right. The Home Office itself tells us that:

    · The number of young people committing serious crimes, including murder and grievous bodily harm, has almost doubled in last seven years.
    · Gun crime has trebled in London during the past year and is soaring in other British cities.
    · Crimes involving knives have also trebled in London in the past year and they too are increasing in other British cities.

    These figures tell us something that is true about the everyday lives of millions of people: that life-shattering violence is not unthinkable, that violence has become the common currency of crime and that the fear of crime lies around every corner.

    But the public aren’t just afraid. They are angry and they have every right to be so.

    Government has many duties and the first of these is to protect the public.

    My opposite number, the Home Secretary – to do him justice – does understand that we no longer feel protected. But what is he doing in response?

    He is trying to take power to control every police force in Britain from a desk in Whitehall.

    Presumably, he imagines that efficiency will be improved by the Home Office – the Home Office, which has given us an Immigration and Nationality Department that can’t process applications faster than the average snail; an asylum system that is, by his own admission – in a state of chaos; and a youth justice system with appallingly high re-offending rates.

    He threatens to sack the Commissioner of the Metropolitan Police, and engages upon a damaging, divisive and demoralising conflict with the police service. Five thousand police officers arrive to protest outside Parliament and, for the first time in living memory, policemen begin to ask for the right to strike.

    I might have suggested to him that this is a time to pick a fight with the criminals, not with the police. But I don’t need to – because he has noticed this for himself.

    We know he has noticed, because he and the Prime Minister have held a ‘summit’. This last week. Very impressive. An initiative. Very impressive. So, of course, were the last 29 initiatives taken by Mr Blunkett since he became Home Secretary.

    Let’s hope this one will be different from the rest. Let’s hope this one will actually work.

    But I fear that the chances are slim. Why? Because Mr. Blunkett is the Newton of modern criminal justice policy. Newton told us that, for every action, there is an equal and opposite reaction.

    In Mr. Blunkett’s case, it can truly be said that, for each initiative, there is an equal and opposite initiative.

    So the day after the summit, focusing on street crime, what did the Home Secretary do? He announced that he was not able to find prison places for the people whom the police were going to arrest and the courts were going to convict.

    And he told us he had discovered a brilliant device for solving the problem. He was going to let a large additional number of existing prisoners out early on electronic tags.

    What was the message to potential criminals? Just be sure that, if you intend to engage in crime, you wait until my prisons are full. Then I guarantee you’ll be in and out in a trice!

    But perhaps we shouldn’t worry too much. Because, a few days before the summit, the Home Secretary had already made sure that not too many people would be arrested.

    What was his brilliant wheeze that week? What was that week’s ‘initiative’? It was to require every police officer to issue a report every time someone is stopped on the street.

    How will that cut bureaucracy and make the police more effective at fighting street crime? I have to admit, I don’t know. Alas, Mr. Blunkett’s junior Minister, Mr. Denham, didn’t know either when I asked him in the House of Commons.

    Thousands of police officers don’t know either.

    But I can tell you who does know. The boys in the gangs know. They know they are not likely to be stopped, because the police officer stopping them will have to spend most of the morning handing out notices to every member of the gang.

    So my message to the Home Secretary is this. “David, calm down, slow down. Your heart is in the right place. But you can’t cure street crime in this country with a thousand incoherent and conflicting initiatives. You can’t cure it by alienating the police or trying to control this all from a desk in Whitehall. Time is running out. We have a crisis of street crime on our hands. To tackle it, we need a coherent programme, calmly developed, and carefully implemented.”

    Now, you will ask me: “what is our programme?” And that is why I have been beginning to develop a coherent programme for Conservative policy on crime over the last few months.

    Back in January I delivered a speech called Beyond the Causes of Crime. It sets the agenda for everything the Conservative Party hopes to achieve on the issue of law and order.

    When the Prime Minister spoke about being tough on crime and tough on the causes of crime, he too was hoping to set an agenda, and in many ways he succeeded. But the time has come to start looking beyond the causes of crime. We think it is better to find out what causes the opposite of crime – in other words those patterns of decent, friendly, civilised behaviour that make for what I call the neighbourly society.

    We believe that the neighbourly society is the most important defence we have against crime. A neighbourly society is built upon strong and supportive relationships within families, between neighbours and throughout the wider community. A united, concerned and vigilant community not only guards against the attacks of the established criminal, but also turns young people away from the path of crime.

    But what chance does the neighbourly society have when the young learn that thuggery goes unpunished while good people live in fear? How can we expect communities to form and flourish when the streets are overrun by vandals and drug dealers? We need to understand crime and community as two opposing forces. Crime has weapons at its disposal above all, violence and the threat of violence. In the face of such a threat the peaceful community can only retreat, ceding more ground to the criminal, exposing young people to values wholly opposed to those of the neighbourly society. Thus neighbourhoods decay; the young are corrupted; people who can, get out; and people who can’t, live blighted lives. All this, because decent people are afraid.

    Crime isn’t just about the headline offences of rape and murder, or even the more common offences of mugging and burglary.

    It is about the everyday crimes, conveniently filed away under the term ‘social disorder’: graffiti, vandalism, petty theft, fly tipping, drug dealing, intimidation, bullying, racial abuse, the corrupting influence of gangs, and the underlying, but entirely viable, threat of violence against anyone who stands up to the wreckers.

    Yes, of course, people do fear the headline crimes, but in many neighbourhoods there is another kind of fear, closer to despair, born of the knowledge that we must limit our lives or become victims anyway; that the street is owned by the criminal, not by the citizen; that vandals can do what they will, even if everyone knows who they are; that thugs may torment their neighbours with only retaliation guaranteeing a decisive police response; that the gang is a stronger influence on our children than the school; that in the frontline against fear no one is on our side; that we are right to be afraid.

    I have spoken of the struggle between crime and community. It is a struggle that the community is losing and the evidence of defeat can be seen most starkly in Britain’s poorest neighbourhoods. There is something desperately wrong with our society when the people we put in the front line against fear are those least able to stand up to the thugs – the poor, the very old and the very young. They need some one to fight for them, not just holding the line against fear, but taking back the ground lost to the forces of disorder.

    Who will take on this role? We believe it must be the police.

    What we want is the kind of policing that takes back the streets from the muggers and the drug dealers and makes them safe for the decent, law-abiding people of this country. I call this neighbourhood policing and it is the foundation on which we will rebuild the neighbourly society.

    This is not just a dream. It can be done. And the reason I can be so sure is because it has been done. Not in this country, of course. But in America, where city after city has declared war on social disorder of all kinds.

    Two weeks ago, when I was in New York as the guest of the NYPD, what did I see? I saw policemen walking the streets. I saw patrol cars, which patrol small areas on a continuous, 24-hour basis. I saw the teams available to move in behind the beat-cops and the patrols to tackle crime on the street. I saw how week-by-week, street-by-street mapping of crime makes transparent where and when crime is being committed, and forces policemen at all levels – right up to Chief Constable level – to produce timely, effective strategies for dealing with street crime. I saw how the Police Department and other agencies tackle quality of life issues as well as crime. I saw a criminal justice system that is based on a sense of urgency.

    Does it work? The figures speak for themselves. Over 9 years, murder in New York has been reduced by 80%; robbery, burglary and car theft by over 70%; theft by just under 50% and rape by just under 40%. Across these crimes as a whole, the reduction is 60% since the new methods were introduced.

    You are now five times more likely to be the victim of crime in London than in New York, and twice as likely to be robbed or mugged. New York is now a noticeably safer and more pleasant place to live in than London.

    Why isn’t our government bringing about the same transformation over here? Because, true to form, they want to do the whole thing themselves. Instead of leading from the front, David Blunkett wants to run every police force in the land from his desk. It won’t work. Reform isn’t about micro-management by politicians, bureaucrats and spin-doctors, it’s about setting public service professionals free to do the job they were always meant to do. The tragedy of New Labour is that they cannot grasp this truth.

    Neighbourhood policing is critical. But it is not enough. We believe that the criminal justice system needs to change. The Commissioner of the Metropolitan Police was right. There is not much point in catching criminals, if it takes months to conduct trials and if they are bailed back onto the streets to commit more crime during those months. We need to find means of instilling a sense of urgency into our criminal justice system.

    Our prisons are another problem. 58 per cent of all prisoners are caught re-offending within two years of release. For prisoners under the age of 21, the record is much worse. 75 per cent of all young offenders sentenced to custodial sentences are caught re-offending within two years.

    These figures are simply unacceptable in a civilised society. How can we accept that a young person, once a criminal, is always a criminal? How can we accept that level of failure? How will we ever have safe streets and a neighbourly society if we continue to accept it?

    In the next few months, Conservatives will be bringing forward radical proposals for reform of the youth justice system – proposals designed to take young criminals off the conveyor belt to crime.

    But we also need radical proposals to prevent young people getting onto the conveyor belt in the first place.

    To do that, we have to have effective neighbourhood policing – and a fast, effective court system. We have to break up the gangs when they are committing crime, and we have to prove to young people that crime can and will be stopped in its tracks. We have to clean up the neighbourhoods in which graffiti, fly-tipping and vandalism have reduced the quality of life to a level where crime seems natural.

    But these things are not sufficient. We also have to build upon the work that Michael Howard began when he was Home Secretary. We have to make a reality of co-operation between the police, the schools, the local authorities, the Drug Advisory Service and other agencies, to spot the youngsters at most risk of becoming criminals, and to intervene effectively before they get onto the conveyor belt to crime.

    Nor will the state be able to do everything that needs doing.

    A great part of the heat of the day will have to be borne by volunteers, by charities, by what Douglas Hurd called ‘active citizens’. Conservatives believe in active citizenship. Many people in this hall are the active citizens, the volunteers, the people who support the charities that are preventing young people from joining the conveyor belt to crime.

    In the next few months, as we come forward with specific policy proposals on neighbourhood policing and reform of the criminal justice system, we will also bring forward specific policies on the voluntary sector, to widen and deepen voluntary effort – to lead our young people away from the conveyor belt to crime.

    Our work in this Parliament has barely begun. We have much to learn, and much to study. We are conscious of the magnitude of the task.

    But I make this pledge to you today. We will go on thinking and go on working. By the time that we come to the next election, we will go into that election with a coherent, developed, long-term programme to fight street crime in this country, and to rescue our streets for the decent citizens of this country.

    Only with such a programme can we hope to achieve a neighbourly society in Britain. Only with such a programme can we hope to achieve a Conservative Government in Britain. It is our ambition and our intention, to achieve both of these goals.

  • Michael Howard – 2002 Speech at the Centre for Policy Studies

    Michael Howard – 2002 Speech at the Centre for Policy Studies

    The speech made by Michael Howard, the then Shadow Chancellor of the Exchequer, on 12 April 2002.

    May I begin by expressing my gratitude to the Centre for Policy Studies for allowing me to give this, the second of a series of speeches on the framework of economic policy, at the Centre. The Centre has, of course, a long and distinguished history of offering a forum to Conservative economic policy makers. I am honoured to be following in that tradition this morning.

    Last month, I made the first of this series of speeches at the Institute of Public Policy Research which is, if not exactly a sister organisation of the CPS, then perhaps a cousin across the water.

    In that speech I made three points. First, that the current Government’s approach to monetary policy is an evolution of the policy that the Conservatives began to put in place in the 1990’s and not, as the Government maintains, a decisive break with the past. Secondly, that the transfer of responsibility for setting interest rates to the Monetary Policy Committee of the Bank of England has been a successful further stage in that policy, for which the Chancellor deserves credit. And thirdly, that that evolution must be maintained by implementing even greater objectivity and accountability in framing monetary policy.

    My main message was that, in monetary policy at least, there is now a very considerable degree of economic consensus. That consensus, and the stability and continuity which spring from it in economic affairs, is greatly to the advantage of our economy and is a matter for celebration.

    Today I want to talk about the framework for fiscal policy. Here too there are some points of consensus and here too that is to be welcomed. Unfortunately, however, the scope for consensus is somewhat more limited in this area for reasons which I hope to make clear in the course of this speech.

    In terms of short-term economic management, of course, monetary policy is a much more appropriate tool than fiscal policy. Fiscal policy, however, has a very important and powerful influence on the economy’s medium and long-term performance. And it must be conducted in a manner that supports the work of the central bank in running monetary policy directed at achieving an inflation target.

    This leads to one clear and rather obvious difference between the framework for monetary policy and the framework for fiscal policy. While the task of short-term economic management based on monetary policy is now broadly apolitical and the responsibility of the Bank of England’s Monetary Policy Committee, the conduct of fiscal policy remains clearly the political responsibility of the Chancellor of the Exchequer.

    But first, I perhaps ought to make clear that there is one area of fiscal policy which I shall not cover at any length or in any detail this morning. I have already set out my firm belief in the proposition that, other things being equal, low tax economies are best. They are, in general, the most dynamic economies, the most innovative economies and the economies which do most to enhance the material welfare of the people who live and work in those economies. Other things are not, however, always equal. There are from time to time moments in a nation’s economic history when other things have to take priority. As I have also said before the present crisis which we face in our public services is, I believe, one such moment. This does not mean that, as a nation, we should pour endless amounts of taxation into the bottomless pits of unreformed public services. It does mean that the public services must be put first and that the provision of the resources which are necessary in order to meet the current crisis may have to take priority over tax cuts.

    But today I intend to concentrate on the Government’s approach to the framework for fiscal policy and some of the key principles which Governments should apply in this area.

    THE PRINCIPLES OF FISCAL MANAGEMENT

    The current Government has set out five principles of fiscal management – transparency, stability, responsibility, fairness and efficiency.

    It implies that these principles are somehow new. And it makes yet more fundamental claims. In the recent Treasury book, “Reforming Britain’s Economic and Financial Policy”, which no doubt you have all read and which some of you may realise has now become my nightly bedside reading, the authors Ed Balls and Gus O’Donnell, assert that ‘a consensus has emerged in support of sound public finances as the principle medium-term objective of fiscal policy.’ Such a consensus, they claim, ‘grew out of the experience of the 1970’s and 1980’s which saw a relaxation of fiscal discipline.’

    Not for the first time in their volume, they claim too much. The very phrase, ‘sound public finances’ could have been lifted from virtually any of the speeches of Margaret Thatcher or any of her Chancellors. To the extent that there is now consensus around the need for sound public finances, that consensus hardly arose because of Labour’s actions. Indeed, even now, there seems in Government circles to be little recognition of the trade-off between high tax levels and economic competitiveness.

    But the principles are nevertheless welcome. And I am happy to endorse them.

    THE RULES OF FISCAL POLICY

    The principles, however, only take you so far. There is clearly room for huge differences of judgement in the way in which the principles are applied and it is in partial recognition of this that Gordon Brown has attempted to convey at least the impression of rigour by the introduction of his two fiscal rules. The first rule is that the Government will only borrow to finance net capital spending. This is the so-called ‘golden rule.’ The second – the ‘sustainable investment rule’ – is that, over the economic cycle, the ratio of net public sector debt to GDP should be set at a stable and prudent level, defined by the Chancellor as 40% of GDP.

    The Chancellor has, of course, made great play of these rules. When announcing them to Parliament in June 1998, he claimed that they would go a long way to ending ‘once and for all’ boom and bust, a claim with which manufacturers and others might currently take issue. This would, in turn, he said, enhance stability and long-term investment in public services, thus enabling the country to achieve its potential.

    The casual observer might therefore be left with the impression that these rules are rather powerful. In fact the gloss from the Treasury is such that Gordon Brown is often presented either as a modern day version of Gladstone or as the 21st Century reincarnation of Philip Snowden.

    But the principles behind these rules are not new. They build on the approach taken by the Government’s Conservative predecessors. Ken Clarke’s Red Book in November 1996 stated: ‘Fiscal policy’s role is to maintain sound public finances. The Government’s fiscal objective is to bring the PSBR back towards balance over the medium term, and in particular to ensure that when the economy is on trend the public sector borrows no more than is required to finance its net capital spending’ (parag 2.09). Not only was the PSBR projected to fall to close to balance in 1999-2000, with a surplus thereafter, but net public sector debt was forecast to fall below 40 per cent of GDP in 2001-2.

    The sustainable investment rule, which constrains public debt, has a particularly interesting pedigree. As early as 1976, Tim Congdon proposed, as part of a wider programme, a maximum ratio of public debt to GDP. He pointed out that a large deficit, which implied a rising ratio of debt to GDP, would result either in the crowding out of private sector investment or inflation. His analysis was incorporated into policy making in the 1980’s.

    It is indeed gratifying that the present Chancellor has recognised the fact that an excessive budget deficit might risk excessive debt interest and, consequently, unnecessary taxation. But belated recognition is one thing. Fresh discovery is another. This approach did not start in 1997.

    THE FLEXIBILITY OF THE RULES

    Nor are these rules the all-encompassing ‘final word’ on fiscal policy that Government rhetoric would imply. The Institute of Fiscal Studies, for example, has said the rules are not ‘sacrosanct.’ It refers to them as ‘probably best regarded as sensible rules of thumb, but they are no more than that.’ I rather agree with this view.

    At first sight, for example, there is some logic in terms of intergenerational fairness behind the golden rule. It seems equitable that each generation should pay fully for the spending that benefits them but should not have to pay for the spending that will benefit other generations. But even here, the rule is not perfect. Some spending that does not produce a durable physical asset nevertheless yields benefits to future generations – such as the defence spending during the last War, as Marc Robinson has pointed out in a paper for the IFS. Furthermore there may also be cases where future generations have to pick up the bill in a way that is acceptable under the golden rule – for example in respect of civil service pension liabilities.

    But there are yet bigger problems when we look at the rules in more detail.

    For example, the golden rule allows the ratio to be defined over the ‘economic cycle.’ This cycle is very difficult to define and as such gives the Chancellor considerable creative scope in assessing whether the rule has been met.

    When I recently asked the Chancellor, in a written Parliamentary Question, for clarity on this matter, he referred me to the Red Book. This is what the relevant passage of the Red Book says:

    ‘Given the closeness of output to trend throughout 1997 to 1999,possible measurement errors and the prospect of further data revisions, it remains difficult to conclude for certain that the UK economy has completed a full, albeit short and shallow, economic cycle between the first half of 1997 and mid-1999. For the purposes of the Budget and the assessment of performance against the fiscal rules, the provisional judgement remains that a cycle may have been completed by mid-1999 when the current cycle is assumed to begin’ (Budget 2001, March 2001, para 2.36).

    I am not sure that that makes it very much clearer what the Chancellor means but I hope you understand what I mean.

    How is anyone supposed to hold the Chancellor to his test of the golden rule – supposedly cast iron, water-tight, a lynchpin of his entire approach – when it is so difficult to determine, at least until well after it has been completed, when the cycle to which it refers has started or ended?

    And of course, the golden rule only constrains borrowing in relation to what is defined as current spending. This means that Governments can spend substantial amounts of money while keeping the golden rule. As the IFS have pointed out: `In the late 1960s and early 1970s, the golden rule was met. This was not because public sector net borrowing was particularly low, but because public investment at the time was high’ (Briefing Note, January 2001, p. 3).

    OUR APPROACH TO THE RULES – SCRUTINY AND TRANSPARENCY

    So what approach should an incoming Government take to these rules?

    The Treasury has itself acknowledged that there is a balance to be struck between ‘a rigid mechanical approach and an approach based on unfettered discretion.’ I agree. And actually achieving this balance – ensuring that the rules are neither unachievable in a recession, nor so loose as to be meaningless – is, I agree, extremely difficult.

    Two conclusions follow.

    First, no Chancellor should seek to load greater authority onto the rules than they will bear. Gordon Brown’s attempt to dress up these rules as a return to some form of exceptionally rigorous Gladstonian fiscal orthodoxy is, I am afraid, wholly bogus.

    Second, the rules need to be buttressed by other measures.

    THE NEED FOR SCRUTINY

    The best means of achieving this is through improved and more objective parliamentary scrutiny.

    I have already proposed improved scrutiny of appointments to the Monetary Policy Committee. What scope is there for improving parliamentary scrutiny in the fiscal area?

    One possibility would be to equip Parliament with an agency that could offer serious analysis of spending, borrowing and taxation in a manner comparable to that achieved by the Congressional Budget Office in the United States. It would mean that all the Treasury decisions could be authoritatively challenged by an objective agency accountable to Parliament.

    Under the present arrangements, the National Audit Office and the Public Accounts Committee enable the legislature to scrutinise the previous actions of the Executive after the event. This work is exceptionally valuable, but Parliament should also be intellectually equipped and capable of properly challenging the Government as it develops its policies. And there is no more central area for this task than fiscal policy: spending, taxing and borrowing.

    THE NEED FOR TRANSPARENCY

    But for scrutiny to be effective a degree of transparency is necessary. Indeed, transparency is the first of the Government’s five principles. If this principle is to be achieved it must be possible for the facts on which debate is based to be capable of being established and, if possible, agreed. But one of the worrying developments since 1997 has been the increase in obfuscation from the Treasury. I am not talking here about the repeated reannouncements of spending proposals – those spinning Balls are easily caught.

    I am talking about something much more insidious.

    As the Financial Times has said: `Unfortunately, in many respects Mr Brown has reduced Budget transparency to a new low. Important tax changes have been omitted from the speech… Statistics have rarely been quoted on a consistent basis. The Budget documentation has been filled with political point-scoring rather than factual analysis. And there has been a continued tendency to classify the collection of revenue as anything other than taxation’ (2 March 2001).

    Let us take a few of these points in turn.

    We have become accustomed to the phenomenon of discovering after a Budget Statement that some very important measure has been buried in some obscure footnote. The extent of the £5 billion a year raid on people’s pension funds was not mentioned in the relevant Budget statement, with a reference instead to `a long needed reform’ (Gordon Brown, col. 306, HC Debs, 2 July 1997). When the Chancellor introduced the new 10p starting rate in his 1999 Budget he neglected to mention that he was abolishing the existing 20p rate. And nor was his stealth tax on entrepreneurs – IR35 – mentioned in his 1999 speech. Instead, he said: ‘I want to recruit, motivate and reward Britain’s risk-takers’ (Gordon Brown, col. 177, HC Debs, 9 March 1999).

    Another example is the far too little known fact that the Government has deliberately excluded the impact of indirect taxes when illustrating the effects of Budget changes on specimen households.

    The public accounts themselves are now more opaque and confusing than for many years. The Budget Red Book has been transformed from a coherent document that lucidly explained economic policy to a discursive document that confuses more than it informs. Meanwhile its length has risen from 160 pages when we left office to 225 pages last year. The Finance Bill likewise has risen from 219 pages to 292 pages.

    It is little wonder that one of the most serious criticisms that can be levelled against the Chancellor is the increasing complexity of the tax system. The Institute of Chartered Accountants, for example, has said that the tax system has ‘spun out of democratic control’ because of complexity, the number of anomalies and the ‘culture of never-ending change.’

    I know that the CPS is looking at this problem of the ever-increasing complexity of the tax system and I very much look forward to your conclusions.

    Clearly this also has implications for two more of the principles which the Government has established for fiscal policy – efficiency and fairness.

    Complexity in the tax system does not lend itself to meeting either meaning of the term `efficient’: the efficient allocation of resources in the economy or the narrow definition in terms of efficient tax collection. Indeed it is a startling fact that the number of Inland Revenue staff has risen from fewer than 50,000 in 1997 to 64,000 now.

    One of the reasons behind this growing complexity is the tendency of the Chancellor to intervene in just about every area where intervention is possible. I accept that there is a proper place for the use of the tax system to encourage particular kinds of behaviour which are regarded as economically and socially desirable. But any such intervention should be used sparingly – both because any tax break for some effectively raises tax rates for others and also because this very process, unless it is firmly controlled, tends to constitute an impediment to transparency.

    Yet as the Economist has said: ‘The signs are, in fact, that in microeconomic policy Mr Brown’s every instinct drives him towards complication and activism….. The Chancellor is meddling because he thinks he knows best…. The Chancellor appears to forget that fiscal complexity feeds on itself; that it creates anomalies that call forth new rules and complications’ (The Economist, 13 March 1999).

    It is also clear that much of the opaqueness which has arisen in recent years is deliberate. The national accounts and public finances should in principle be presented on the basis of internationally agreed accounting conventions. That is why the Chancellor’s decision to score the Working Families Tax Credit as a credit that reduces income tax and the tax burden rather than for what it is, a social security benefit that increases public expenditure, is so reprehensible. His approach to this question is entirely inconsistent with the internally agreed accounting conventions. The Treasury Select Committee has also noted that, under accounting conventions employed by the ONS, the OECD and ESA95, `…WFTC counts as expenditure’ (report on Budget 2000, April 2000).

    Even if the Chancellor’s preference to score the measure as a tax credit rather than a social security benefit were acceptable, he has chosen to treat the WFTC and the old Family Credit benefit, which it replaced, in different ways. In historical data presented by Gordon Brown, Family Credit is scored as a social security benefit and is not netted off against income tax. This of course is the opposite of what he has chosen to do with the Working Families Tax Credit. The result is a higher total tax burden before the introduction of the change and lower one afterwards despite the fact that there has been no change of any kind in the essential approach. That is not transparency, that is deliberate obfuscation.

    Where statistics are not consistent Government documents should highlight this and explain the reason for it. This is particularly important where the Government is choosing to present numbers in a way that departs from the agreed international conventions. And where previously available information has been dropped, it should once again be made available and in an easily accessible form.

    CODE FOR FISCAL RESPONSIBILITY

    The Government has emphasised, in this context, the introduction of the Code for Fiscal Responsibility. Treasury advisers claim that the Code strengthens the openness, transparency and accountability of fiscal policy.

    However, it is clear that the principles in the Code – the fiscal principles I listed earlier – are not being observed. The Code itself, although approved by Parliament and supported by the Finance Act 1998, does not have the force of statute.

    We may need to look at ways to give effect to some of the rhetoric employed at the time of the Finance Act 1998 and ostensibly enshrined in the Code for Fiscal Responsibility.

    I would welcome a public discussion on the lessons that we can learn from our experience since the legislation of 1998, together with the experience of scrutiny that is available for example under the New Zealand Fiscal Responsibility Act and elsewhere.

    This would also help to meet the fifth principle of fiscal management: fairness. It is certainly a principle to which I would subscribe. But it is not a principle which is likely to be met under an opaque and complicated tax structure. And the Government’s general performance in this area leaves a great deal to be desired. The tax burden for the poorest fifth of households rose from 37% to 41% in the first three years of Labour Government – the latest figures which are available. That is hardly the record of a Government with an equitable tax policy.

    SPENDING

    The final point I wish to make about fiscal policy is, in many ways, one of the most important of all.

    Both the fiscal rules of course relate to inputs into the public spending equation. Yet the most important issue is the outcome of that spending – its effectiveness.

    The Chancellor in the foreword to the Treasury book states that there was a need for `better planned public spending’ in 1997, which focused on `the quality of public service provision’. Yet it is hardly credible to claim either that public spending over the last five years was in fact better planned, or that the quality of public service provision has improved as a result.

    There does need to be a rigorous approach to assessing the effectiveness of decisions about public spending and investment. Of course the Government claims that such an approach is already taken. And there is, indeed, Treasury guidance, set out in the `Green Book’, covering the need for cost-benefit analysis of spending decisions.

    Treasury advisers also highlight public service agreements as the means by which attention is focused on outcomes rather than inputs. Yet these have not achieved that goal, not least because many of the targets are not being met.

    An IMF working paper last year looked at these issues. It stated that UK Government authorities implicitly recognised that the golden rule was about how investment is financed, not about the optimum level of that investment. The paper went on to say: `it is particularly important that the details of how a “value for money” criterion will be implemented are clearly set out. But that is not yet the case in the United Kingdom’. It said, in relation to the Government’s requirement that each department publish a Departmental Investment Strategy, that the first strategies (in March 1999) contained little relevant information other than to refer to existing (non-mandatory) guidelines on investment appraisal.

    So it is clear that not enough attention is being given to this vital area, one which is often overlooked in discussion of the fiscal rules.

    CONCLUSION

    I have today focused on the framework for fiscal policy, and have set out some suggestions for how it might be strengthened.

    The Chancellor’s fiscal rules have an important role to play, but their limitations need to be acknowledged. They need to be buttressed through the introduction of a degree of objective scrutiny and transparency into fiscal policy. There also needs to be a greater focus on the outcome of the spending – rather than just the amount which is spent.

    I will be focusing in future speeches on non-fiscal aspects of the supply-side economy. But it is important at this stage to recognise that the combination of ever higher taxes along with ever worsening public services, a less transparent tax system and employment regulations that make the labour market less flexible will, in the medium-term, depress the economy’s growth rate.

    Beneficial supply-side reforms take a long time before their full effects on an economy are evident. The impact of damaging policies on the supply-side is also only clear after a lag, and the lags involved can be protracted. It is because these lags are so long that we need a properly informed debate about these issues now. The public finances should be accurately and intelligibly presented. And the institutional arrangements for presenting and scrutinising the government’s fiscal polices need to be strengthened.

    Measures of this kind will not guarantee halcyon economic performance forevermore. But they would represent a clear improvement on the arrangements that are presently in place. I hope they can form the basis of informed debate during the rest of this Parliament.

  • Iain Duncan Smith – 2002 Speech in Bradford Launching the Local Election Campaign

    Iain Duncan Smith – 2002 Speech in Bradford Launching the Local Election Campaign

    The speech made by Iain Duncan Smith, the then Leader of the Opposition, on 15 April 2002.

    We know about the national problems of crime, health and education.

    But ultimately all of these are local problems.

    It may be your street that is no longer safe to walk down, your local hospital where an elderly relative was stuck on a trolley for hours in A&E;, your local school where teacher shortages mean your child’s class has been cancelled.

    It’s one thing to read about the state of our public services in the press, it is quite another to be confronted with them on your own doorstep.

    To deal with the day-to-day impact of failing public services, we need to move decision-making closer to the people they affect; the personal level, the family level, the community level.

    If we are to make life better particularly for the most vulnerable in our society, it is at the local level that we will need to deliver lasting improvements. That means restoring local government to its rightful place in the community.

    It means turning local government into community government, where you spend more time pursuing the paramount interests of the residents you serve and less time implementing the wishes of a distant and disdainful centralised bureaucracy.

    Trust the people

    I would be the first to acknowledge that previous Conservative Governments have at times over-centralised but I believe that this Government has centralised more than any other.

    We cannot afford to repeat that mistake if we are to deliver genuine improvements in our public services and to our quality of life.

    We have to be prepared to believe in local government as a principal strand of Party policy.

    We have to trust the people.

    Trust the public servants and small businessmen, instead of tying them up in red tape.

    Trust people with their own money, instead of clobbering them with ever higher council tax bills.

    Trust people to get on with their own lives instead of running their community from Whitehall.

    Trust local people to build communities.

    Trust the local councillors who represent those communities.

    Conservatives delivering better communities

    And the basis of that trust will lie in the results that Conservative Councils are already achieving.

    For all the red tape, Conservative councils are innovating in the best interests of their community and providing inspiring examples of how to enrich the local quality of life.

    Here in Bradford, Conservatives have shifted the emphasis on new development from building on greenfields to redeveloping brownfield sites.

    The Council stopped plans to turn school playing fields into a housing estate, and it is now bringing in millions of pounds of new investment by transferring council housing to not-for-profit landlords in the voluntary sector.

    Conservatives delivering value for money

    If you are going to trust councillors with more power, you also have to be able to trust them with the peoples’ money.

    Again, it is Conservative councils who are leading the way.

    This year, an average household in a Conservative council will pay £135 a year less on a Band D council tax bill than a Labour council and £159 a year than in a LibDem council.

    Labour and Liberal Democrat councils have the highest council taxes in England – a reflection of years of financial mismanagement. Fourteen of the councils with the top twenty highest council taxes in England are Labour-controlled. None are Conservative.

    But Conservative councils are not just delivering lower council taxes, but delivering better value for money for every penny raised. They collect more council tax and more council rents.

    They have fewer empty council houses and cleaner streets.

    The best rates of recycling are in Conservative controlled authorities.

    The worst schools are in Labour and Liberal Democrat councils.

    And it is those who rely on local services, the vulnerable, who are affected the most by the quality of the services they receive.

    The number of homeless has risen by 12,000 since 1997-98 and the numbers of people in temporary Bed & Breakfast accommodation has trebled. More available affordable housing is crucial to these people.

    It is Conservative councils have less empty council housing, and re-let vacant housing more quickly.

    And it is the social services departments of Conservative councils who are among the most innovative in protecting the vulnerable and giving the disadvantaged a better chance in life.

    Neighbourhood policing

    But if there is one thing that hits the vulnerable hardest, it is surely crime.

    In Britain today there is an imbalance of fear. People fear crime and disorder far more than our criminals fear authority.

    Crime is afflicting every neighbourhood, and we need to fight back.

    But we will not do so while policing is run from Whitehall with nothing but targets and more red tape, forcing our constables to retreat from the streets.

    We need a different approach.

    Officers need to know their neighbourhoods.

    And neighbourhood yobs need to know their police officers.

    That is what they have done in New York. The NYPD are no more than two minutes away from any crime that is reported.

    As a result they massively reduced robbery, burglary, car and violent crime.

    So we will deliver neighbourhood policing.

    Why am I so confident that we will do this?

    Because Conservative councils are already delivering it.

    Conservative-run Bexley in London have put extra money into youth services, to increase social and recreational activities for young people, and backed that up with an integrated council-police team, based at a local police station, to tackle youth disorder.

    Conservative Kent County Council have pioneered a community wardens scheme, supporting the police and providing a reassuring presence in rural areas.

    This is a genuine innovation aimed at making communities safer, something which this Labour Government has failed to do, and other Conservative councils such as Kensington and Chelsea are introducing similar ideas.

    Our councils didn’t wait for a central directive. They understood that their community wanted greater security, and they responded.

    Conclusion

    Delivery. That is the key to reviving public interest in local politics.

    Turnout in local elections has fallen to alarmingly low levels, down from 45% in London and other areas in the late 80s and early 90s to barely a quarter today.

    The Government’s solution is to suggest text messaging voting and other e-strategies to boost turnout. This misses the point.

    The problem is not that voting is too difficult, but that abstaining is too easy. Put simply, not enough is at stake.

    Where local residents can see a direct link between the way they vote and the quality of services they get, they are more likely to exercise their right to vote.

    And the truth is, it does matter how you vote in local elections, because Conservative councils can make your life better.

    We know that local residents’ daily lives are marred by problems like crime, vandalism, lack of discipline in our schools and a failing transport system.

    But Conservative councillors are working to tackle these problems.

    Conservative councils are delivering practical improvements to our streets and our public services, in rural, urban and suburban communities.

    We have a strong record of delivery; we have a strong vision of genuine community government.

    Let’s get out there and give more people the chance to enjoy the benefits of a Conservative council delivering for the local community.

  • Theresa May – 2002 Speech at the Town and Country Planning Association Conference

    Theresa May – 2002 Speech at the Town and Country Planning Association Conference

    The speech made by Theresa May on 1 May 2002.

    It is a pleasure to be with you today at this conference looking at the implications of the Government’s Planning Green Paper with of course particular reference to the structure of plans proposed and within that to the life or death of structure plans.

    In his foreword to the Planning Green Paper the Secretary of State, Stephen Byers said

    “..Some fifty years after it was first put in place the planning system is showing its age. What was once an innovative emphasis on consultation has now become a set of inflexible, legalistic and bureaucratic procedures. A system that was intended to promote development now blocks it. Business complains that the speed of decision is undermining productivity and competitiveness. People feel that they are not sufficiently involved in decisions that affect their lives…….We need a better, simpler, faster, more accessible system that serves both business and the community.”

    Similarly in the written answer announcing the Green Paper the Secretary of State said “The present planning system is too complicated, too slow and engages insufficiently with local communities. We need to make it more efficient and more accessible so that it better serves everybody with an interest in the growth and development of their community.”

    For once ladies and gentlemen, I can say that I agree with much of what Stephen Byers said.

    I believe that we have a basic problem in that too many people do not have confidence in the planning system. There are a number of reasons for that. Of course there’s the problem of those who feel that the system has prevented them from doing what they wanted to do, be it extend their house or build a major development.

    But for many individuals and communities there is a feeling that somehow the system doesn’t take account of their views or, often, of local needs. And we all know the complaints from business of the delay in decision taking, the inconsistency of approach and the uncertainty of the system. And that’s even before talking about the T5 inquiry.

    So the Government was right in that some change was needed. We need to have a planning system in which people have confidence.

    But beyond that I have real reservations about what the Government is proposing.

    And in particular I take issue with them in their view that the Green Paper delivers, simplification of the system, involvement of local communities and meets businesses needs.

    But perhaps an even more fundamental question is whether the system needs the degree of change that the Government is proposing.

    Obviously I have spent some time since the Green Paper was published talking to and hearing from people involved in the planning system – planners, consultants, developers and local groups. The general verdict on the Green Paper is that it is like the curate’s egg, good in parts.

    But perhaps the more overwhelming comment seems to be “does the system really need such fundamental change. After all we’re not so sure it’s the system that’s wrong just the way it is implemented….”

    Perhaps the Government would have done better to pay more attention to the comments made by the CBI last year in their document “Planning for productivity. A ten-point action plan”.

    That document was of course supported by the British Property Federation, the House Builders Federation and the British Chambers of Commerce.

    In their Ten point plan the CBI identified three key areas in which the system “is perceived to fail its users”. They were:-

    · the system is too slow, too often on decisions that matter

    · the process involves too many uncertainties

    · there is too much scope for poor decisions
    They reflected on the inconsistency of performance between local authorities, but their solutions did not depend on a fundamental revamp of the system. Rather they proposed a focus on “consolidating and developing what works well in the system and rationalising where it does not work well”.

    The problem not only for the Government, but also for everyone who uses or is involved on the planning system, is that the general consensus emerging is that the Green Paper does not meet the needs of business, or of local communities.

    And that is certainly our position on the Green Paper.

    The needs of business are not met in the Green Paper.

    The key issue is that, far from simplifying the system, the new structure of plans that is proposed is more complex, more bureaucratic and I suggest will lead to more delay than the current system.

    Because we are going to see national guidance, structure, local and unitary development plans being replaced by:-

    · National policy
    · Regional Spatial Strategy
    · Sub-regional planning strategies
    · County mineral and waste plans
    · Local Development Frameworks
    · Area Action Plans
    · Some Business Development Plans.

    As SPISE, Sane Planning in the South East put it “Will replacing National and regional guidance and a one or two tier Development Plan with National Policy, National Advice, Regional Plans, Sub-regional Strategies, Local development frameworks and Area Action Plans make the system more manageable or more comprehensible? Are these any more likely to be consistent with one another and reviewed more rapidly?”

    I think the answer is a clear no. The new structure will lead to a multiplicity of plans which will not only be more complex for business and individuals to navigate their way around, but will also put yet more pressure on scarce resources at local authority level.

    Far from streamlining the system, the Government is making it more bureaucratic and more complex.

    Central to the new hierarchy of plans of course is the abolition of the county structure plans and with it the role of the county councils in the planning hierarchy.

    As an MP and a former councillor I know the difficulty of persuading people that when they object to a planning application they must object on planning grounds. I think the same test should be applied to the Government’s proposals on the hierarchy of plans. Is the abolition of county structure plans being proposed on good planning grounds?

    I suspect the answer to that is no. Because I believe that the proposal to abolish the role of county councils owes less to the desire to streamline the planning system and more to the Government’s commitment to press ahead with regional government. And on that basis alone it should be given short shrift.

    As I am sure you are all aware, in 1999 under the Government’s modernising planning agenda, the then DETR commissioned a study on “Examination of the operation and effectiveness of the structure planning process”.

    The report concluded that “the statutory structure plan should be retained as the crucial link between enhanced regional planning guidance and local plans”. It also concluded that the structure plans should be redefined to reflect their strategic role and should be concerned with all matters that required integrated treatment at a sub-regional level.

    The Government’s decision to abolish the county structure plans therefore flies in the face of their own research.

    But it also ignores the key role played by county councils in delivering transport, education, waste management and social services.

    Now those reading the Local Government Chronicle might have taken some comfort from the headline in the 11 April issue that “Falconer seeks to reassure counties”.

    But a careful reading of that interview would have given no such reassurance. He said there was a role for counties. Was that because of their involvement in the issues I raised above like transport and waste management? Was it because of the importance of the involvement of elected representatives in the planning process? Was it because without the involvement of the county councils the planning process would ignore local needs and would not achieve the integration so beloved of government?

    No – it was because in his words “they have lots and lots of structural planners”. So the counties will pay for the work but won’t be making the decisions.

    We believe that the county councils should continue to be involved and to be part of the decision making process and of course the counties can provide that sub-regional level of plan.

    We do not support the Government’s proposals on regional government and we will fight to keep the county councils. But it is not only the county councils that will be affected, because it has become clear that the regional assemblies would require not only the abolition of county councils but also the re-configuration of district councils in many areas – at a potential cost of £2bn. I think there are better things the Government could be spending taxpayers’ money on than setting up a new tier of politicians and bureaucrats.

    But it is not just in making the system more complex that the needs of business are not being met. The Green Paper proposes a new stealth tax on business – a development tax – through the proposals to change the current rules on planning gain – Section 106.

    I think most people would agree that Section 106 and the whole planning gain process is not working as well as it should. Many people feel it lacks accountability and that too often local communities are left with planning gain that has little to do with the impact of a development and lots to do with what the council wants to do locally but can’t afford.

    Many would say that greater clarity and consistency would be a benefit. But the Government’s proposed tariff system would leave developers paying a tariff and on top of that possibly having to negotiate planning gain with the local authority.

    How long would it be before the Treasury saw monies raised through the tariff as an excuse to cut authorities’ revenue support grant. Then would we see authorities being deemed to be raising funds through the tariff and having grant cut regardless of whether they were in receipt of funds through the tariff or not.

    Greater clarity is needed, but also surely we need to get back to a system where the gain is clearly linked to the impact of a development.

    I said the Green Paper doesn’t meet the needs of business or local communities. Despite all the statements about local involvement in the Green Paper I believe that the proposals will lead to a reduction in the voice of local communities.

    To an extent we see that in the move on structure plans – removing the role of elected representatives and moving decisions to unelected regional planning bodies.

    But we see it most clearly in the proposals on major infrastructure projects.

    Here the proposals have been driven by experience on Terminal 5. That was not a good experience, but it might be useful to reflect that the delay was not entirely due to the length o f the planning inquiry. The minister took a time in coming to a decision as well!

    We are currently looking at how major infrastructure projects should be dealt with in the planning system, but I am sure of one thing and that is that a proposal that could lead to decisions being whipped through a committee on limited debate of the issues – even as little as an hour and a half – would cut out the voice of local communities and is the wrong way to go.

    There is a similar issue at a lower level in the proposal to delegate 90% of an authority’s planning decisions to officers. Practise of course varies. But the Government is I believe wrong to think that the one size fits all approach will work.

    Practise often varies because the nature of the applications and particularly the balance between individual applications and larger scale developments varies from authority to authority. I spoke recently to an authority which delegates more than 90% of its applications to officers, but which allows any Member to put any application on the development control committee agenda. But I also spoke recently to a council leader who said they were delegating less than 80% but that figure was about right given the sort of applications they received and their impact on the local area.

    This requirement seems to have been born out of an assumption that delegation will automatically speed up the process. There is as far as I am aware no correlation between the two. But it misses the point that the quality of the decision making is also important. Failure to address this issue could lead to yet further alienation for local people and less confidence in the system.

    Flexibility at local level on this issue must be right, so councils can reflect their particular needs and respond to the voice of their local communities.

    The question of officer delegation brings me to one issue that should underpin the Green Paper but which is referred to only briefly. This is the whole issue of the resources allocated to planning departments and the role and remit of planning officers.

    All the Green Paper proposals in the world are no good if the staff and resources are not there to implement them.

    The Green Paper sets out two approaches. The first is that in recognition of their expectation of “real improvements in performance from local government” they are going to set up the Local Planning Advisory Service, working with the Best Value Inspectorate. It seems to me that this is just another example of their obsession with centralisation. It will add to an already over-inflated inspection regime.

    It means more money going into central provision rather than local provision. The Green Paper touches its cap to the issue of resourcing, referring to the forthcoming comprehensive spending review.

    But many planning departments are finding it increasingly difficult to recruit sufficient planners – and not just in terms of numbers but also in terms of experience and expertise.

    I worry when I hear that at least one university is closing its planning school. Local authorities could well find themselves caught between a lack of basic supply and the more lucrative private sector. If the supply of planners reduces then local authorities will find it even more difficult competing with the private sector.

    But this is about more than just numbers. I get the feeling that too much of a planning officer’s job these days can be described as a mechanistic process of assessing applications – which rules does it meet or break – rather than a process of assessing the suitability of an application – too little attention is given, perforce because of numbers, to issues of design quality.

    I guess the key question is are our planners really planning or are they just processing according to rules set down by others?

    If we are to increase confidence in the system then surely there needs to be a re-invigoration of the planning profession as well.

    As a geography graduate who failed to go into planning I may not be best placed to address that question. As a politician dealing with planning issues I believe it is crucial – and you are well placed to consider that question.

    The Green Paper gives the opportunity to address this issue as well as the details of the planning system. Of one thing I am sure. The issue should not be ignored, although it is not simply a matter for Government but for the profession as well.

    Ladies and Gentlemen: I agree with the Government that there is a need to address the problems in our planning system that have led to a lack of confidence in the system for both many individuals and business.

    The Green Paper’s approach of removing the county structure plans yet increasing the hierarchy of plans, thus increasing the complexity of the system and possibly leading to more delay, removing some decision taking from local level and reducing the voice of local communities, and reducing the role of elected councillors does not address that need.

    The aim may have been laudable, but the Green Paper fails to deliver.

  • John Whittingdale – 2002 Speech on the Manufacturing Sector

    John Whittingdale – 2002 Speech on the Manufacturing Sector

    The speech made by John Whittingdale on 1 May 2002.

    Having had the opportunity to tour some of the exhibition this morning, my first and immediate reaction was to say that clearly reports of the demise of manufacturing in the UK are premature. I therefore want to congratulate the MTTA on putting together such a fantastic showcase for your industry. With over 400 companies exhibiting products and technologies, many of which are as advanced as anything available in the world, you have provided a perfect riposte to those who would write off the manufacturing sector in this country.

    Given your importance to the economic health of our nation, I share your surprise – although perhaps not your disappointment – that a Government Minister was not willing to come to Birmingham to be with you. I can only conclude that perhaps he got wind of what you, Mr President, were going to say. However, as the principal Opposition Spokesman for Trade and Industry, I stand permanently ready to step into the Minister’s shoes. I should therefore like to thank you for this opportunity to come to your conference and to respond to your comments on behalf of the Conservative Party.

    Like you, I have many criticisms of this Government when it comes to manufacturing industry. But perhaps I can begin by saying something with which everyone in this room will agree as, we are told, do Ministers. Manufacturing matters. A successful manufacturing sector is essential for a healthy thriving economy. You above all need little reminding of the crucial importance to the UK economy of manufacturing industry: it is responsible for nearly two thirds of our exports, over a quarter of our output and 15 per cent of our jobs.

    The problems afflicting manufacturing therefore pose a challenge for all those concerned about the future prosperity of our nation. Some of these are not new: The competition from countries with labour costs far below our own. The decline in the attraction of industry as a career among those leaving our schools. And the difficulties of an uncompetitive exchange rate.

    Nor I acknowledge did the drop in employment in manufacturing and the fall in its contribution to our national income start with the election of this Government. But there is no doubt that the last couple of years have been exceptionally painful for those in your industry. And it has not been helped by the fact that while you have been mired in recession, the rest of the economy has continued to grow.

    For a long time, the Government gave the impression that it did not care about manufacturing, that as long as unemployment stayed down and living standards stayed up, there was no need to give special attention to any particular sector that was in trouble.

    However, at the end of last year, that changed. The Secretary of State for Trade and Industry in belated recognition of the importance of your success held a manufacturing summit here in Birmingham. It was attended by some 50 delegates including 5 Ministers, 12 trade unionists and just 7 businessmen occupied full time in the actual running of manufacturing companies.

    The outcome was the announcement of £20 million of government money divided between an extension of the Industry Forum and an expansion of the Partnership Fund. The first is essentially a talking shop while the Partnership Fund seeks to bring employers and employees together to solve particular business problems. Among the successes trumpeted on the DTI web-site for the first round of the Partnership at Work Fund is the establishment of an Employee forum at Pizza Express for which the project co-ordinator is a waiter on secondment. I have no wish to knock what I am sure is a worthy project but I think manufacturing industry was entitled to expect a little more.

    Shortly after the summit in January of this year, the Secretary of State for Trade and Industry gave a speech in which she once again stressed the importance of manufacturing. This time she said that the decline in output had been exaggerated because of a flaw in the statistics and that the solution to your problems lies in membership of the Euro. It will not surprise you to learn that I do not agree.

    Of course, British manufacturers find it difficult to be competitive when the Euro has fallen through the floor. But no one would want to lock us into the present exchange rate for all time. And if the Government do wish to enter at a lower exchange rate, they have given no indication of how they intend to bring that about.

    Yet the tragedy is that if the Government really did want to help manufacturing industry, there are several concrete steps that they could take straight away. First of all, they could stop the relentless flow of regulations, which spew from Brussels and from Whitehall.

    Of course, I recognise that all Governments regulate and all Oppositions criticise them for doing so. But this Government has taken the art of regulating to new heights. £15 billion added to business costs since this Government came to power according to the British Chambers of Commerce. Last year, a record 4,642 new regulations: one every 26 minutes. By the Government’s own admission, businessmen had to spend 617,000 hours last year completing information requests from the Office of National Statistics alone. And of the forms sent out, nearly half a million went to firms in the manufacturing sector.

    Every businessman I meet, every business gathering I speak to, the message is the same: that the burden of regulation is rapidly becoming unbearable and that the flow has got to stop. That was one of the messages in your budget submission. Another was the need to reduce the tax burden. Sadly in neither case did the Chancellor appear to listen.

    Even before the Budget, the CBI had pointed out that the cumulative extra tax burden on British business under this Government stood at £29 billion. That adds to your costs and reduces your competitiveness. But of all the extra business taxes that this Government has introduced: the Utilities tax, the petrol tax, the aggregates tax, the tax on pension funds, one stands out for the scale of the damage that it has done to your ability to compete in the world.

    If the Chancellor had tried to come up with a tax designed to hit manufacturing industry hardest, he would have found it difficult to have done better than the Climate Change Levy. Across the engineering sector, it has raised operating costs by just under £90 million. And yet it is likely to have a negligible impact in terms of reducing carbon emissions.

    That is why at the last election, my Party was pledged to abolish it. Sadly we were not given the chance to do so. But we remain convinced that there are far more effective ways of achieving a reduction in greenhouse gas emissions which do not destroy the competitiveness of our industry at the same time.

    Of course, Ministers have repeatedly argued that the effect of the Climate Change Levy is neutral, that it is balanced by a 0.3 per cent cut in employers’ National Insurance contributions. It was not convincing even before the Budget. After the Budget, even that figleaf has been ripped away.

    Listening to the Budget, for fifty minutes you must have been happy. Tax credits for R & D, cuts in corporation tax for small firms, increased spending on education, law and order and the NHS. Then in the last ten minutes, business got clobbered with a tax increase of nearly £4 billion. And what is more a tax on jobs, that will hit every employer, no matter whether they are large or small, profitable or loss-making. Having specifically asked for a cut in employers’ NIC in your budget submission, you have instead have been given a direct increase in your costbase. You have every right to be angry.

    It is perhaps in recognition of that anger that we learn that the Government is shortly to announce a new initiative: the appointment of a Minister for Manufacturing. It is we are told to be Alan Johnson, one of seven junior Ministers in the DTI. In my view, they should all be Ministers for Manufacturing. But until the DTI can make its voice heard against the Treasury, it will do little good.

    After a long and brutal recession, there are at last signs of an upturn in manufacturing in the UK. But if it is to be sustained, it needs to be nurtured by Government not snuffed out. Much of the rhetoric of Ministers I applaud, but it is time it was matched by their actions. It is a criticism which, if I am given the chance, you will not be able to make of me.

  • Michael Ancram – 2002 Speech at the Israeli Solidarity Rally

    Michael Ancram – 2002 Speech at the Israeli Solidarity Rally

    The speech made by Michael Ancram on 6 May 2002.

    I am here today because I am a friend of Israel. That friendship has taken me on a number of occasions to Israel. It has taught me to hear and see for myself. It has shown me the imbalance of so much of the news that we receive here. It has equally shown me the realities, the hurt on both sides that must be mended, the senses of injustice on both sides that must be met.

    It has also taught me that peace and security will be won not by accusation and humiliation but by courage and respect. I am here today because I want to see an Israel living at peace and free from fear. Fear is the enemy of peace, but is the corner stone of terrorism. That is why we must be resolute in the fight against terrorism, because peace depends upon it. And if Israel is to exercise restraint in the pursuit of terrorism then others must demonstrate that they can and will control it.

    Our goal must be the day when Israel can live in true security and peace alongside all her Arab neighbours, each in mutual respect for one another’s sovereignty and right to exist.

    I am also here today because I hate intolerance. Intolerance too is the enemy of peace and we must have no truck with it. In that context I condemn without reservation the acts of anti-Semitism which recently have occurred here at home. They are despicable in themselves, but also because tolerance is their enemy which they seek to destroy. They must never succeed.

    Tolerance is the soil in which peace can grow. Tolerance replaces fear with trust, replaces bitterness with respect, and anger with understanding. None of this is easy. The easiest road is always the one that looks back in recrimination, the one which glories in confrontation. It is the road of despair for there is no peace upon it.

    But there is a road that looks forward with hope. The road of dialogue which in the end is the only lasting road to peace. I learned in Northern Ireland that peace cannot be imposed. It must grow in the hearts of those who must come to agreement, and it is only through talking that this can gradually be brought about.

    It will take courage and determination and generosity, but everything I have learned tells me that it can be done.

    I was in Israel and the territories in February. I saw the escalation of the fear and the violence and the despair. They were dark times – and are still. I know about dark and violent times. I know too that it was often at the darkest hour that the light of hope was born; born from the longing for peace of the people, of those who had suffered, who cried out that enough was enough.

    I believe that this same light of hope is here today. In Israel I saw determined hope. I believe that the route-map for the way forward is there. We are all here today because we long for the end of terrorism in Israel and the dawn of a real and lasting peace. We want to see that journey towards peace and freedom from fear begin again. The chances are now there. We must pray that in the days ahead they are taken.

    We who are friends of Israel will support that drive for peace with all our hearts, and all the help that we can bring to bear.

  • Michael Ancram – 2002 Building True Partnerships in Europe Speech

    Michael Ancram – 2002 Building True Partnerships in Europe Speech

    The speech made by Michael Ancram on 9 May 2022.

    “How times have changed! A few years ago critical questioning of the future shape, direction or structures of Europe would have been condemned as an anti-European act. Either you were for ‘le projet’ or you were against it. There was no middle ground.

    “Today Europe itself is talking about its future. Fifty years on the European Union is facing a sort of midlife crisis; a crisis of identity, a crisis of purpose and a crisis of authority. A crisis acknowledged even by the Laeken Declaration. There is a sudden realisation that not all is well.

    “The pathetically low turnouts in the last European elections. The negative votes in the Irish and Danish referendums. The re-emergence of extreme national politics, particularly in France. The growing popular dissatisfaction with and feelings of alienation from European Institutions. The European economy presents a far from rosy long term picture. There is suddenly a fluttering in the European dovecote.

    “Stopped in its tracks is the arrogance which has so marked the European Commission over recent years. Gone the sense of inevitable and unstoppable progression. Both replaced by confused rhetoric. The same voices which recently contemptuously dismissed American policy as “simplistic” now plead anxiously for the US to resist the ‘unilateralist temptation’.

    “Suddenly there is talk of consultation. The Convention on the future Shape of Europe. But there is little evidence that the fundamental problem, the deficit in the democratic process at a European level, the alienation of people from institutions, has even begun to be addressed, or whether the means for doing so even exist. What is certain is that Europe is uncertain, more uncertain about itself than it has been since its inception.

    “We see a demographic time-bomb in Europe which the EU has failed to address. A growing, technological gap between European countries and the US. A need for greater innovation and deregulation, as growing unemployment threatens the livelihood of millions of people. It is against this backdrop of economic failure that we must begin to consider the structural failures of the EU as it stands today.

    “Over the coming year we in the Conservative Party will be developing a clear strategic view of Britain’s Foreign Policy at the start of the twenty-first century, and defining British interests within the international arena.

    “It is with this in mind that I address the issue of the EU today. We will apply this rigorous process to the EU as well, asking how it fits or should fit with Britain’s and other countries’ national interests. We will address that fundamental question as to the role the EU should fulfil in the 21st century. What should it do, and what should it not do? How can we make it more effective for and more relevant to British citizens?

    “I do not propose to answer those questions in detail tonight. There is much work to be done first. I intend to analyse closely where Europe finds itself today. We will identify those areas requiring rigorous examination and consideration, and where necessary reform.

    “That is why we call today for a fundamental review of the way the EU is currently working. We believe that this is a necessary precursor to genuine constructive reform. If the current EU process is not prepared to undertake such a fundamental review, we will look for alternative and credible ways of doing so. It is an opportunity which must not be missed if we are to reshape Europe to meet the genuine challenges of the new century.

    “The time is ripe for a constructive but realistic debate about the future structures of Europe. It is a debate in which we are happy to take part.

    “The current uncertainty creates above all a crisis of identity. We therefore have to start with the very basic question as to what precisely we mean by Europe.

    “‘Europe’ is a concept. It is a collective, broad-brush description, not a nationality. It is a geographical entity, rather than a “land” with the true sense of belonging that flows from that term.

    “How do we define Europe? Just look at the multiplicity of geographical descriptions and definitions. Northern Europe, Southern Europe, Middle Europe, Eastern Europe, Mediterranean Europe, Central Europe, Slavonic Europe, Scandinavian Europe. I could go on.

    “This multiplicity of descriptions of Europe also hides a massive diversity of languages, peoples, cultures, economies, and histories. Some aspects are shared. Many more are different. One has but to look at the patchwork quilt of the history of Europe. It underlines the infinite diversity in our continent which cannot be straight jacketed by simplistic description.

    “Indeed the history of European unity, until the Second World War, was a history of military subjugation, an empirical aspiration that could never succeed when pitted against the diversity and national sentiment that existed within Europe – and still exists today.

    “The origins of the EU lie in the conflict that wracked Europe between 1939 and 1945. The leaders of the nations of Europe determined it should never happen again. The resulting Common Market was based on consent, around a “bottom up” principle which sought to build links and co-operation at the lowest levels and with NATO’s help it worked. Europe has seen an unprecedented period of peace and has been much the better for it.

    “However, since its inception we have also seen an seemingly inexorable move towards full European unity, as “harmonisation” has stealthily been imposed upon us all.

    “Despite the subsidiarity principle that decisions should be taken at the lowest appropriate level, the impacts of European integration continue to weave their way into the nooks and crannies of everyday life.

    “In the Common Agricultural Policy, for example, a vitally important sector of our national economies continues to be dominated by an inefficient European structure. We see at the same time an increasing incidence of fraud in EU budgets. We see a lack of responsiveness to local needs, inevitable when the minutiae of a system are essentially determined by a supranational authority.

    “The endemic tendency to wish to encompass everything has led to the EU being regarded with a growing sense of distance and irrelevance by vast numbers of its voters. The lack of democratic accountability, compounded by new directives constantly being imposed from above, only serves to add to popular alienation from “Europe”. The need for reform and change is now more pressing than ever.

    “The EU stands at an important crossroads in its development. Recent political events in France stands as a stark warning of the potential outcome of that sense of detachment from a remote political elite felt by millions of people across Europe.

    “In this information age, with more well informed and empowered citizens than ever before, the urgent challenge is to correct the democratic deficit and to bring the real interests of people back to centre-stage.

    “Reform must not be a one-way track. There are a variety of options, each of them with adherents and arguments in their favour.

    “There are those whose sense of disillusionment with the EU and growing supranationalism lead them to support complete withdrawal from the EU, either with the intention of going it alone or as a full member of NAFTA.

    “Diametrically opposed to them, there are those in favour of building an integrated United States of Europe, an “advanced supranational democracy which must be strengthened” – whatever that might mean – , even more closely linked than at present, with a central government presiding over a common foreign and security policy, a common economic and fiscal policy, underpinned by a single currency, and with a common social policy.

    “And there is a third option. A partnership of sovereign nations, bound by the single market and the rules of free trade, but otherwise working at different levels of participation and involvement, tailoring common ventures and aspirations to the national interest and the national modus operandi. A Europe for all seasons, and all national traits and imperatives, which recognises and maximises national strengths in a constructive way.

    “Let me look at each of these options in turn.

    “To withdraw from the EU, either to go it alone or to engage in a NAFTA-like trade area, would be a damaging course, forfeiting authority and benefit. We benefit from our trade with Europe.

    “Europe may well be facing economic problems. It is however certainly not in our interests for these to continue. Moreover our trade is vitally tied up with Europe and affected by European legislation. Norway and Switzerland, as members of the European Economic Area, must comply with European law, but they have no influence over these laws ands regulations. Withdrawal would replicate this weakness for us.

    “On the other hand the supranational approach, suggesting that institutionalised cooperation can achieve everything, and therefore must pool everything, is totally missing the point. More can be achieved through voluntary co-operation than through enforced conformity.

    “In the face of current European uncertainty Tony Blair’s government might appear ambivalent. Far from it. While their language at home may be tailored to create the impression that the Europe of Nations is still an option for them, their language abroad and more importantly their actions within Europe tell a different tale.

    “Regrettably what happened at Nice was both a functional failure and a failure of vision by our Government. Having rejected the vast bulk of extensions to QMV proposed by the French Presidency prior to Nice, most were meekly accepted.

    “A simple accession process, acknowledged by Robin Cook as necessary for enlargement, turned in to a treaty which had little to do with enlargement, which we passionately favour, and everything to do with political integration.

    “The Nice Treaty further alienated people from the institutions of the European Union and may, perversely, as we warned, imperil or delay enlargement.

    “The failure to concentrate on the core objective of enlargement was symptomatic of a government which talks of constructive engagement but fails to come up with actual policies which address the real challenges of an enlarged EU.

    “The rhetoric of integration is also there, on record, for all to see. Speaking in Warsaw in 2000 Tony Blair declared the need for a Europe “strong and united”. In Birmingham last year he was quite open about it, saying that a “more effective common foreign and security policy…is vital”. He obviously learnt little from the farce of trying to achieve a common European line in the aftermath of 11 September.

    “At the same time Jack Straw calls for an ever greater pooling of our sovereignty.

    “Their deeds and words all point, not to a desire to make the EU work for the citizens of its member states, but to their desire to submerge British sovereignty and that of other European countries in an ever more centralised Europe. They may work by stealth, but their agenda remains the creation of a supranational Europe.

    “It is the wrong direction for Europe, and we reject it. It threatens not only the end of popular sovereignty, but also a further divorce of the political process from its legitimacy – the people themselves. It either presages the unacceptable tyranny of the majority imposing common policies on reluctant member countries, or the equally unacceptable tyranny of the lowest common denominator. Neither is acceptable.

    “The coercion of conformity and harmonisation would stifle the diversity that is the very essence of Europe. As a result of a common interest rate, a single currency and a single fiscal policy, inevitable internal tensions would arise. Division and internal discord would ferment from the forcing together of very different economies, bringing in to the open the threat of new axes as the largest members push ahead with their ambitions at the expense of the interest of their smaller partners. We have already had a taste of this when Ireland was reprimanded under the growth and stability pact, whereas Germany for a similar ‘offence’ was not.

    “These tensions will become even more apparent after enlargement. EU enlargement is a project that has always enjoyed the total support of the Conservative Party. But we must also recognise the need to plan properly for it.

    “Already such tensions are beginning to show in the failure to face up to the shortcomings of the Common Agricultural Policy, and in the increasingly sharp exchanges between the accession countries and Brussels as the realisation dawns that the EU has taken insufficient account of their needs with regard to structural funds and agricultural subsidies. This is a salutary warning of the internal divisions we risk if we do not move swiftly to reform.

    “We want to see genuine and constructive reform. We do not see it in Romano Prodi’s ‘advanced supranational democracy’. A supranational European state would undermine the goodwill and genuine co-operation required in Europe. It would be harking back. It would be building a bloc after the era of blocs is ended.

    “It would also be naively ambitious. To attempt to be a superpower bloc, rivalling America, is foolish. America is a sovereign superpower with vast resources. Europe is not. We need America far more than America needs us. We must stick to the partnership of Europe and America. We must reject the anti-American rhetoric of some leading Europeans who want to make it Europe or America.

    “Our constructive approach to European reform will start with the world as it is, not as we might wish it to be. The events of 11 September were a wake-up call. The call to Europe was very clear. It reminded us once again that the comfortable and stable world of cold war blocs was over. Mass equilibrium, based on the doctrine of mutually assured destruction, was ended. The threats were different. The friendships and alliances needed to meet them were different. The world into which the European Union had been born and raised was gone. The European mindset has to change.

    “The message of 11 September to Europe was ‘adaptability and flexibility’. That is why we root our approach to the reform debate firmly on the ground of the Europe of sovereign Nations.

    “We need to use the current debate on the future structure and shape of Europe to look at what is working and what is not. That which is working and is consistent with the Europe of the future should be preserved and strengthened. That which is not working, or is out of date or is no longer consistent with the evolving nature of Europe should be reformed or discarded. Anything less than this rigorous approach will be a sham.

    “The Treaties, the ‘acquis’, the directives, should all be open to re-examination to assess their effectiveness and continuing relevance – and open to change if necessary. A genuine review and reform process cannot object to revisiting those elements which appear either not to be working or not working as well as they should. There can be no sacred cows, no no-go areas, no sealed vaults.

    “Such a ‘keep out’ attitude would prove the enemy of genuine reform. Fortunately there is growing recognition in other European countries that at least some of the treaties may need reform. Only Britain’s Government seem to see the Treaties as untouchable totems of commitment to Europe. It is massively short-sighted. It assumes that once a regulation is in place it will remain effective through all circumstances, and will not be affected by the changing international and economic situation.

    “By adapting to change and revisiting the treaties, the regulations and if necessary the ‘acquis’ and in making a constructive assessment of their continuing relevance and value to people as opposed to institutions, we can hope to move once again towards a ‘bottom-up’ Europe. A Europe that starts with the needs and aspirations of the people of Europe, not the ambitions of its bureaucrats, and which can once again make itself relevant to people’s lives.

    “Relevant does not mean meddling in every nook and cranny of every day life but being a useful engine to increase the economic prosperity and success of European countries. People who currently feel distant from the EU must be convinced of the benefits to them. Our constructive review must ask the central questions. Do these treaties, these directives, this ‘acquis’ still serve the real interests of the peoples of France, Germany, Holland, Belgium, and so on. And above all do they serve the interests of the people of Britain.

    “For instance the Common Foreign and Security Policy. This is a concept that will not work and should be abandoned. The history of the CFSP is a already a trail of failures. Re-buff over Israel, inaction over Zimbabwe, division and delay after 11 September, and the inevitable undermining of NATO. All demonstrate the inflexible, unwieldy nature of the CFSP and show that it is simply not practical.

    “The Rome Treaty preamble demanding ‘ever closer union among the peoples of Europe’ requires further thought. Such wording sits uneasily in today’s world and we should be prepared to consider rephrasing it in a way which better reflects the network, flexible, nature of modern international co-operation.

    “We need to reconsider the role and powers of the Commission in initiating policy, questioning whether this is the most effective, or appropriate, way to operate.

    “Coincidentally it already appears that the Commission is in fact losing power to the Council Secretariat and to a mish-mash of other agencies and committees. Whilst this loss of power by the Commission is not something to be mourned, we need to consider how the structural distribution of powers can be more effectively organised to ensure greater democratic accountability, rather than simply shifting the power around internally.

    “We need also to look closely at those elements of the EU which are working but which can be improved.

    “The Single Market has the potential to bring economic benefit, but there is work to be done to make it function more effectively and fairly. We will continue to work towards the completion of the single market. We will continue to press for further deregulation and improved competitiveness.

    “We must recognise that the world’s economy is now global. In a world of increasingly fierce economic competition, ineffective and burdensome regulations hinder rather than help economic success. Companies today often find they are being sent out to compete in the global marketplace with one hand tied behind their back. The distinction now needs to be clearly made between what is necessary to provide a level playing field, and what is an unnecessary burden.

    “At the heart of EU reform must lie “a democratic process which uphold the rights of all member states, big and small, and guarantees the rights of the people and of every citizen”. These goals, set out by Romano Prodi in April, cannot be reached by the road to integration or his ‘advanced supranational democracy’. Centralisation and integration are inimical to them. Reform can only begin to achieve these goals if it is firmly rooted in the domestic democratic processes of each member state. It could encompass the prospect of the Commission agenda being shaped by national legislatures.

    “Our democratically elected national parliaments can best, certainly better than anything else in the EU, interpret the national interest and represent the will of the people. It is at a national level that people still feel the greatest sense of identity, and sense of belonging. Moreover if genuine accountability is to be created in Europe, and the growing rift between the plans of the European bureaucrats who determine Europe’s agenda and the genuine wishes and will of the people who ultimately pay for the EU is to be ended, then national parliaments must remain the best channel for genuine democratic control.

    “Too often, when the democratic deficit in Europe is mentioned, it is suggested that the simple answer is for the European Parliament be given more powers. This is simply shifting power within EU institutions, not returning it to the people themselves. We must return to the founding principle that the EU is the servant of the people of Europe and the national parliaments that represent them; it is not their master.

    “It is too early to be specific. Genuine reform must be preceded by genuine analysis. We should hope that this will be undertaken by the Convention, although the early signs are not encouraging. There is currently too much grandiose talk of writing a constitution. There is already too much planning for further centralised structures such as a European Diplomatic Service . All of this is the antithesis of resolving the democratic deficit. It will make it deeper.

    “We are open to genuine reform. Not doctrinal reform to a set agenda, but reform to build a more workable Europe to meet enlargement. Not destructive reform, but constructive reform which works for the peoples of Europe. Not theoretical reform, but reform which reconnects people with what Europe means for them.

    “We want to see a Europe that looks outward rather than inward, Taking on the international economic challenges of the world rather than spending so much of its time focussed on internal bureaucratic battles.

    “What I have set out today is not a detailed blueprint, nor at this stage before the in-depth analysis has been done is it intended to be. What it seeks to represent is a broad outline, a framework within which we can work on the more detailed substance of our approach to Europe, and which demonstrates our willingness to engage constructively in this vital debate.

    “We are faced with a great opportunity. An opportunity to sail between the jagged Scylla of withdrawal, and the vortex of Charybdis which is the European Superpower. Both of these are concepts of the 20th century. We are looking towards the 21st century, the globalisation of economics, the new fluidity of relationships, the reality of the American superpower and the slumbering giant of China. We are looking for a Europe which will be better suited to meet these challenges. Our Europe will be agile and supple and cognisant of the national forces within it which are its strength.

    “Ours is a Europe in which the strengths of each member can be deployed to the full, where non-conformity is a strength and not a weakness, where flexibility and differences of emphasis are an advantage and not a hindrance. A Europe where we can go on being British and Italian and French and German and so on, with our rich and diverse histories and culture in the knowledge that it is through this diversity that we will achieve greater strength and genuine goodwill than ever would be possible than through artificial and forced conformity.

    “Partnership rather than incorporation, subtlety rather than stubbornness, and with Britain at the fulcrum. We want a Europe which will work with the grain of the world rather than against it, a Europe in which we can go on being British and doing that which is in the interests of our people.

    “That is the Europe of the true partnership of nations. It is a constructive Europe, a Europe for all seasons, a Europe which can work.”

     

  • Iain Duncan Smith – 2002 Speech to the West Midlands Institute of Directors

    Iain Duncan Smith – 2002 Speech to the West Midlands Institute of Directors

    The speech made by Iain Duncan Smith, the then Leader of the Opposition, at Villa Park on 16 May 2002.

    Speaking as I am in Aston Villa territory, I am conscious that some of you will have viewed the recent play-off success of Birmingham City with mixed emotions.

    What I found heart-warming were the headlines plastered all over the newspapers: ‘Blues on the way up’.

    Even West Brom have got in on the act. Not only have they won automatic promotion this season, their supporters topped the BBC’s recent ‘Test the Nation’ IQ quiz.

    At an average of 138, their score was thirty points higher than the English national average.

    Figures were unavailable for politicians and I resist the temptation to speculate.

    Having three sides in the Premiership will provide a multi-million pound boost to the local economy. It is also another sign of this area’s predominance.

    Birmingham is the 12th largest wealth-producing district in Europe. It is a great commercial city, vital not just to the West Midlands but to the whole UK economy.

    And the West Midlands Institute of Directors has an extremely important position.

    I welcome your long-standing efforts to advance the argument for competitive enterprise as the essential building block of lasting prosperity.

    The IoD has a motto: ‘enterprise with integrity’.

    Britain badly needs a Government that practices what you preach.

    When politicians talk about integrity, you probably start counting the spoons.

    But it cannot be right for a Cabinet Minister to be given red carpet treatment when he has lied on national television.

    And it cannot be right that the same Minister misleads Parliament and then refuses even to apologise for it.

    There are few enough opportunities for the public through their MPs to hold the Government accountable in the first place.

    Whatever our political disagreements, if the Government of the day isn’t straight and seen to be so, it is public confidence in our democracy and business confidence that will suffer.

    Integrity matters. And so does an understanding of enterprise.

    This Government talks relentlessly about ‘enterprise’.

    The title of the Budget Red Book was ‘Investing in an enterprising, fairer Britain’.

    ‘Enterprise and fairness’ is one of the Chancellor’s favourite phrases. But what exactly does Labour mean by ‘enterprise’?

    As far as I can see, they mean companies. The private sector. Business, commerce and industry.

    For me enterprise is a much broader concept. It is a culture, a way of doing things. It is about thinking creatively in order to make better products or deliver better services.

    As Bob Michaelson said, what you have in this region is the spirit that created the industrial revolution. This is the spirit of enterprise, and it was no different when it was about 19th century technology than today, when it is about the hi-tech industries of computing and telecommunications.

    Yes, enterprise is about making profits, but it is also about making peoples’ lives better. It should be as much a feature of the public sector as it is of the private sector.

    It’s just as much about building new ways of delivering better public services as it is about building new structures for business.

    This is the real difference between Conservatives and Labour today.

    We are prepared to be enterprising. We are prepared to think differently and creatively to make peoples’ lives better.

    This means holding our hands up and recognising that Britain does not have a monopoly on good ideas in the delivery of public services.

    On the contrary, in the research we have undertaken so far in our policy review, we have found that many other countries have better methods for delivering core public services, particularly healthcare.

    Germany has no national waiting lists.

    Denmark gives people a legal right to treatment within four weeks of seeing their GP.

    Stockholm gives patients the choice of doctor and the hospital they go to. No one can do that in the UK without going private.

    Of course, if Britain could boast similar achievements, we might be justified in ignoring the record of other countries and simply carrying on with what we’ve got, without meaningful reform.

    But the reality is that the quality of the service the public actually receives has deteriorated.

    The NHS has more managers than beds.

    Accident and Emergency waits have grown longer.

    The number of operations is at a standstill.

    We are now confronted with a two-tier Health Service where record numbers of people – a quarter of a million last year – are paying for their own operations, not through insurance but out of their own pockets.

    And all despite this Government increasing NHS spending by nearly a third in real terms.

    Any businessman or woman would question the underlying soundness of an enterprise that produced these sorts of returns on that scale of investment since Labour came to power.

    If you had experienced no appreciable rise in output, and a marked decline in customer satisfaction you would surely look at the underlying approach of your business before committing more investment?

    And if there was clear evidence that your overseas competitors were getting better results, you would surely swallow your pride and have a look at how they did things in other countries.

    Sadly, the Government has done none of these things.

    The result is as depressing as it is unoriginal: a return to tax and spend.

    The Chancellor has embarked on a great experiment to prove that the only thing lacking in the NHS is money.

    And yet we already know that this isn’t true. The evidence is on our own doorstep.

    Taxes will increase by around £8 billion pounds next year with no hint of any real change in the way the Health Service is run.

    Over the next five years Gordon Brown plans to bring average UK health spending into line with what Wales and Northern Ireland spend now. This is the same as France, more than Denmark and Sweden and slightly less than Germany.

    But the treatment of patients is nowhere near as good. Indeed, in Wales and Northern Ireland waiting lists are worse than in England.

    The Chancellor’s only recipe is to spend more generously and police more rigorously the centralised NHS we already have.

    In contrast, Conservatives are prepared to take the genuinely enterprising approach, opening our minds to alternative ideas for reform, looking abroad at examples of where other countries and other systems produce better results.

    The key is to push power down and to place more trust in the people on the frontline.

    If we are to renew the promise of an NHS that delivers the best quality of care to people regardless of their ability to pay, need should be determined by patients working with doctors, not by politicians and civil servants.

    That means decentralising power and making the Health Service genuinely accountable.

    Creating modern public services is a priority for the people who rely on them – particularly the most vulnerable in our society – but it should be a priority for business as well.

    It is certainly a priority for the Institute of Directors. In your Budget submission, the IoD made a range of arguments about the Government’s record on health with which I would strongly concur. In particular, you highlight the galling inconsistency of the Government’s decision to raise employers’ National Insurance.

    As your Budget submission says:

    “Both the Prime Minister and Chancellor have criticised European social insurance schemes for health, on the grounds that they would impose significant extra costs on business. They have then proceeded to introduce an extra tax on business – of just under 0.5% of GDP per annum – in order to pump money into the state run NHS.”

    On countless occasions in the Commons in the months leading up to the Budget, senior Labour Ministers taunted us for even daring to look at other health systems on the continent. They told us that most European health systems relied on some form of social insurance which was ‘a tax on jobs’.

    So what is the £4bn tax on employers’ National Insurance if it isn’t a tax on jobs? Moreover, it is a tax on wealth creation. It says a great deal about what the Government really thinks about enterprise.

    Most importantly, this is the price you pay for a Government that refuses even to countenance other ways of delivering public services.

    That is why genuine health reform is ultimately so important for business, because only fundamental reform offers a way out of the endless cycle where businesses are taxed more to pay more for sclerotic public services.

    And it is an endless cycle.

    This Budget was not the first time Labour have increased taxes on business. They’ve done it every single year since 1997 without fail, it’s just that previously they did it by stealth.

    Almost as soon as Tony Blair first got into office, his Government introduced a £5bn windfall tax on the utility companies, undermining massive investment programmes for some of the most vital infrastructure in the country.

    In their first year, Labour also introduced the tax which Bob Michaelson referred to, the £5bn abolition of dividend credits on pension funds.

    Bob is not alone in criticising this particular tax change. There is currently an Early Day Motion circulating in Parliament criticising the pension stealth tax, stating that it has cut the dividend income on dockers’ pension funds by 33 per cent. The signatories include: Peter Kilfoyle, Jeremy Corbyn and Dennis Skinner.

    Clearly, MPs of all persuasions recognise the harm that this measure has caused.

    As the last Parliament got into full swing, fuel duty soared to record levels, hitting businesses just as hard as everyday motorists.

    Contractors were hit with IR35; National Insurance was levied on benefits-in-kind, and the Climate Change Levy provided extra costs at the worst possible time for energy-intensive industry.

    But it’s not just taxation.

    A recent IoD survey in the West Midlands found red tape to be the greatest obstacle to enterprise in the region.

    The Government’s own ‘Red tape Czar’ shares this view. The Financial Times recently carried an article by David Arculus, the new chairman of the Better Regulation Task Force. He warns of Whitehall ‘drowning companies in a sea of red tape’.

    He recounts his experience of asking one Government department if it could consider giving advice on employment regulation to employers. Incredibly, the department replied that ‘it could not possibly know everything there was to know about employment regulations’.

    But as Mr Arculus says, ‘this is exactly what the government expects of employers’.

    What I find so staggering about this article is that, after five years of Tony Blair saying he would cut red tape, the Government’s own agency for dealing with the problem is absolutely damning in its assessment of Labour’s achievements.

    Quite simply, since May 1997, you have been subject to an unprecedented tide of both red tape and taxation. In that period, business has been burdened with £11bn of new taxes and regulations every single year. Struggling manufacturers, new hi-tech start-ups, care homes for the vulnerable; small, medium and large businesses; they have all been hit.

    Nothing more starkly highlights this Government’s complete failure to understand the nature of enterprise than this unremitting burden on the freedom of business to create wealth.

    As Conservatives we remain committed to free enterprise, where the burdens on business are minimised instead of ramped up at every opportunity.

    But we also know that we have to get the other fundamentals right: sound infrastructure, reliable transport, stable monetary policy and an education system that gives our people the skills to meet the challenges of today’s competitive workplace.

    On all these areas we are making progress in developing policy as part of the review I set up on becoming leader.

    On education, Damian Green has started to reveal our plans for addressing the failings of our worst schools by offering greater opportunities for vocational training.

    On the pressing issue of health reform, we are visiting other countries to see how they provide better services.

    Michael Howard has confirmed our support for an independent Bank of England.

    And I want to reaffirm our commitment to keeping the Pound.

    The Prime Minister has hinted at a referendum on the single currency next year. I gather this afternoon he sent Stephen Byers to brief journalists that he would start the referendum process this autumn. When that news broke the Prime Minster panicked and denied all knowledge. What a way to run a Government, more spin becomes more chaos.

    At a time when everyone is concerned about the state of their schools and hospitals, when we feel threatened by the rise in violent crime, he should focus on these issues and stop playing games over the Euro.

    If the Prime Minister wants Britain to adopt the single currency, he should say so and name a date for the people to decide.

    We will campaign vigorously for a ‘no’ vote because replacing the Pound means giving control of British interest rates, taxes, and public spending to politicians and bureaucrats in Brussels and Frankfurt.

    It would cost us in higher unemployment and lower living standards, and it would mean boom and bust for the British economy and businesses.

    It also means British people giving away control over politicians. Now, people can kick us out if they don’t like us. Inside the euro, it wouldn’t matter how people voted.

    These are the arguments that I believe will prevail.

    We can then get back to the urgent task of making this country fit for the century we are living in.

    The bottom line is that we are opening our minds to new ways of doing things in order to make peoples’ lives better.

    All Labour have done is opened your wallets.

    Britain deserves better.

    It is the business of the Conservative Party to make sure it gets it.