19/09/2011 Today at Conference

Evening all. Welcome to our first Today at Conference of the 2011

party conference season. We're in Birmingham with the Lib Dems

battered and bruised from those terrible May local election results,

the loss of the AV referendum, remember that? And flat lining in

the polls at around 11%. But the Lib Dems are in a chipper mood.

They insist there's still all to play for as part of a Tory-led

coalition. But that was before they heard from Business Secretary,

Vince Cable, who delivered a speech laden with economic gloom and doom.

Here are the highlights. We now face a crisis that is the

economic equivalent of war and this is not a time for business as usual

or politics as usual. The financial crisis is still with us. It never

went away. We can now see that recovery has stalled in the United

States and the position in the eurozone is, well, dire. But it's

wishful thinking to imagine that we have a healthy economy which has

somehow been infected by a dangerous foreign virus, because

many of our problems are home grown. Gordon Brown regularly advised the

rest of the world to follow his British model of growth, but the

model was flawed. It led to the highest level of household debt in

relation to income in the world. It produced a dangerously inflated

property bubble. It encouraged bloated banking, while

manufacturing declined at an unprecedented rate. And then they

socialised the cost of the crash through a massive budget deficit,

the biggest of any major economy. His disciple, Ed balds, has, well

sort of, apologised -- Ed Balls. What this period of crisis should

have taught us, above all, is humility. And humility in politics

means accepting that one party doesn't have all the answers.

Recognising that working in partnership is progress, not

treachery. And it has been hard. It's required

courage from our party to with stand the tribalism, which is

British politics at its worst. It's not been possible for the party to

get its own way on everything. I mean, I regret this year that we

didn't secure tighter control on bank pay and bonuses for example. A

bad message was sent, that unrestrained greed is acceptable.

We now know where that leads. But we do have very real achievements.

My team in the business department and I want to acknowledge David

Willetts and our own and outstanding minister Ed Davies...

APPLAUSE We've not only made a major

contribution to deficit reduction, but we're now helping recovery. We

have greatly expanded apprenticeships giving respect and

recognition to the 60% of young people who do not pursue academic

study in universities. We protected our science budget and we've

launched a chain of technology innovation centres promoting the

technologies of the future. Then after a generation of manufacturing

decline, we brought jobs back to Britain in steel at Redcar, in

motor vehicle supply chains, electric vehicles and in aerospace

through Rolls Royce and Airbus. This morning, Jaguar Land Rover

announced that they're to build a new engine plant in the West

Midlands, a massive boost for British manufacturing and for this

That's what I mean by a business recovery. Cars not casinos.

APPLAUSE The truth is that financial

discipline is not ideological, it's a necessary condition for effective

Government. I see us following in the footsteps of Roy Jenkins in

post-war Britain and abroad, the Canadian liberals, Clinton

Democrats in the United States, because they understood, unlike

today's Labour Party, that the progressive agenda of centre-left

parties cannot be delivered by bankrupt governments.

I think most of the British public do get it. But there are

politicians on both left and right who don't. And some of them believe

governments, like Father Christmas, they draw up lists of tax cuts and

giveaways and they assume that Santa Claus will pop down the

chimney and leave presents under the tree. This is childish fantasy.

Some of them, for example, believe that if taxes on the wealthy are

cut, new revenue will miraculously appear. I think the reasoning is

something like this: All those British billionaires, who

demonstrate their patriotism by hiding from the taxman in Monaco or

some Caribbean island will come rushing back to pay more tax at a

lower rate. I'm afraid my view about this is "pull the other one".

Banks offered a one-way bail. If they gambled and win, they fill up

the bonus pool. When they lose, the taxpayer pays. And the Independent

Banking Commission, the Vicers commission, provides a means to

stop this dangerous nonsense. The commission's key findings, which

are to separate retail and casino banking, must be put in place.

Legislation will start soon and it will be completed within this

Parliament. APPLAUSE

And if there were any doubts about the need for radical reform, the

UBS rogue trader has dispeld them. We simply cannot have rogue

institutions exposing taxpayers to the risk of exploding financial

weapon s of mass destruction. People accept capitalism, but what

they want is responsible cappism. - - Capitalism. As for irresponsible

capitalism, some of you may have noticed that a big media company

has recently had a spot of bother. I think you know who I am referring

LAUGHTER What I want to do is strengthen the

best of British business. I've taken two initiatives in particular.

I've asked Professor Jon Kay, together with Sir John Rose, the

former boss of Rolls Royce, whose company embodies responsible

capitalism, its commitment to long- term investment, training, I've

asked them to look at how we make our stock markets and institutional

investors get out of the short-term, speculative mind set. I'm

separately consulting on how best to tackle the escalation of

executive pay, which in many cases, has lost any connection with the

value of shares let alone average employee pay.

APPLAUSE The truth is, there are difficult

times ahead, that Britain's post- war pattern of ever rising living

standards has been broken by the financial collapse. I believe we

can turn the economy round. We will. In the coalition agreement we

promised to put fairness at the heart of all we do, and as we

rebuild our broken economy from the rubble, Liberal Democrats know that

you can't do one without the other. So we must now do both, fairness

APPLAUSE Vince Cable. Much more low key than

last year's populist playing to the gallery. His much trailed plan to

curb executive pay has been widely regarded as a bit of a damp squib.

He didn't even indulge in this conference's favourite sport, whack

a Tory. The populist mantle of the party lies on the shoulder of the

President, Tim Farron. He has said without the Lib Dems this

Government would be "an absolute nightmare.". I asked Energy

Secretary, Chris Huhne, if he agreed. It would be much less

interesting for me and probably for Tim, if there weren't Lib Dem

ministers. But a nightmare? I think that the political balance of the

Government is a coalition. It's a coalition between the Liberal

Democrats, who have a very clear, independent stand on a number of

issues and the Conservatives, who come from a different political

tradition. We have to compromise. It's very important. I don't think

there's anything to be ashamed of in compromising. In fact, if we

hadn't compromised to get us out of the economic problems we had at the

election, we would be in the same difficulty that the President and

Congress are in, in failing to compromise over the budget and

losing their triple-A credit rating. The Financial Times this morning

has done calculations using the same mothodology of the Government

has discovered that the structural deficit, the bit that doesn't

disappear with economic growth is �12 billion higher than the

Government calculated. Financial Times is a journalistic

organisation and not... We know that. Not a well established and

reputable economic organisation. Take the IMF, the OECD, they both

do serious calculations of of the structural balance. They both is

slightly different mothodology to the Treasury. That's more likely -

So is the FT wrong? I have no idea. One thing that the Government

should not do, given that we've put in place a framework that has an

office of budget responsibility, which is an independent body with a

lot of resources. But they've used the OBR's mechanism to calculate

this. Are you saying the FT on such matters is not athoritative?

They're not the final word. didn't say that. But it has

authority. One of the things that we're clearly going to see Robert

Chote, the director of the office of budget responsibility, will hold

forth on these matters. That's the appropriate body for putting

forward, if there is a problem of this sort to the Government. If the

OBR, as the independent body under statute that is charged with coming

up with this analysis, if they find a problem, we will respond to it.

If there is a problem, if the FT's calculations are right and we'll

find out in the days ahead from the OBR, if there is a �12 billion or

so bigger structural deficit, will we have to cut more? It is

absolutely clear that the Government is committed to ensuring

that we have a sustainable structural current balance. That's

an absolutely key commitment. It is what has got us out of the danger

zone that we were in immediately after the election. We had that big

Greek crisis the zai after the general election. We've had a

number of countries falling into economic crisis since then, even

though they have smaller budget deficits than we do. We have been

able to get out of the danger zone precisely because of our commitment

to credible fiscal programme. still not clear if you have to cut

more? Neither am I, because it will depend on what the recommendations

are. That's the appropriate way to do it. It's not reacting to what

appears in the papers. Very good investment it's proved for them.

Chris Huhne. Lib Dem leader Nick Clegg doesn't give his annual

address to the party faithful until Wednesday afternoon. He took to the

stage today for a Q&A session. It was a pretty low-key affair. If

delegates have reservation abouts being in bed with the Tories, and

many do, they kept that largely to themselves. But they do worry,

given the poll ratings, if the situation is terminal. The first

question caught the mood, how account party regain the trust of

I don't think in the coalition government you will ever win people

back who regard any compromise as treachery, any compromise as

betrayal, any compromise as a U- turn. I think there are some people

out there who become, curiously enough, more shrill and more tribal

rather than less. I kind of thing, we will never persuade them. You

either believe that Clarissa's some can be good in politics, you either

believe that we have to listen to the British people and they said

very clearly that no one deserved a majority. I'd love to be in the

Liberal Democrat government, I would love to be Prime Minister but

people have to vote for a Liberal Democrat government and they didn't.

We have to explain over and over again, in politics, as in life,

there is nothing wrong in principle saying we cannot do everything we

want so we have to compromise. I think we have to constantly,

constantly, constantly tell our side of the story. If we don't tell

our side of the story, very many people will not.

Perfect satisfaction with that answer. Does anyone else want to

ask a supplementary? Heavens, what docility! It is like a North Korean

conference meeting. Are a lot of people out there are feeling pain

because of things the you have had to do as part of the government. Do

you think it would help if you said a bit more, we feel your pain, we

did not want to do some of these things, the situation wherein has

forced us into it? I say over and over again, I did not get into

politics to make cuts. Of course not. None of us did. Do I like the

decisions were having to take? Of course not. It is bizarre to relish

having to make very dramatic savings in public spending. That is

where we cannot repeat enough that there is nothing fair or

progressive or good in simply shrugging our shoulders, which

seems to be the message from Ed Miliband and Ed Balls and saying,

it is all a bit too difficult to balance the books, it is too

difficult to pay off the debts, we will at the next generation do it.

It is a bit like Miriam and myself saying I cannot be bothered to pay

our credit card bills, we will get our three little children to pay it

off instead. There is nothing fair about that. There is nothing good,

or progressive or liberal, or fair in letting bond traders let this

country be pushed from pillar to post. You cannot do anything good

if you have no control of your own destiny. Given that the economy is

at best flat lining and may even be in recession, if we cannot have

Plan B, can we at least have a plan a start with some investment and

infrastructure and a Obama style job-creation programme? The first

thing, on the Obama package, it is worth remembering this, quite a lot

of the Obama package is stuff we do automatically any weight in Europe.

You bet the other bit of it is to make sure that we invest in things

which not only help us in the long run, but actually produced jobs

today. Transport, rail, road, housing, super-fast broadband, the

kind of things we need as a country anyway because, in so many respects,

we still have clapped out physical infrastructure compared to many

other developed economies. When David Cameron said he was relaxed

about giving friends and neighbours internships, rather than people who

deserve them solely on merit, were you feeling more hopeless or

ashamed that you were in coalition with someone who thinks about

aspiration along those terms? it is quite up to David Cameron how

he runs his private office. But it is a bit embarrassing. I am the

leader of the Liberal Democrats, he is leader of the Conservatives. We

are completely different. I am not going to ask him... He is not going

to agree with everything I say and I do not agree with everything he

says, of course. Nadine Dorries complimented you on the influence

you have over David Cameron. I do not think she thought it was a

complement. Unintentionally, then. How can we persuade the British

public than that is -- that that is true. It is not true. The

Conservatives do not run the government, the Liberal Democrats

do not run the government. You will get people making shrill claims one

way or the other. It is a coalition. It is built on compromise. Let me

say one more general thing on this. We have had a really, really tough

year. The likes of which many of us could not predict and certainly do

not want to repeat. We have got to stop beating ourselves up about it.

We have got to look ahead, not constantly, mournfully look

backwards. Nick Clegg. It is not quite clear

the purpose of the Lib Dem Conference when you are in

coalition. Calls for new policies are likely to be ignored and it

risks becoming little more than a rally. So, in an effort to be more

relevant, there were two emergency discussions today on the riots and

phone hacking. We can no longer accept a media regulator which is

run by the media for the media. It needs independence from the press

and independence from the state. We said it last year and we say it

again today. But there are still some, mostly within the press

itself, who tried to equate independent regulation with a state

controlled regime which would undermine press freedom. Let me be

absolutely clear, the fundamental liberal principles of a free,

independent and unfettered Fourth Estate, holding power and authority

to account, are absolutely sacrosanct for Liberal Democrat.

have a window of opportunity. Lord Justice Levison will report next

year. I expect the police will finish their investigations in the

next few months. His scenes in next session of Parliament starting next

May, there must be a government commitment to implement the

recommendations of Leavis and and take action then. If we do not take

action soon, it may be political consensus will dry up and go away.

When I was the police commander in 2002, and unfortunately the police

shot someone who was carrying a cigarette lighter in the shape of a

gun, a peaceful protest about a shooting developed into a riot. The

police should have known that that was going to happen in Tottenham on

Saturday night. They should have had and they could have had

sufficient officers who were suitably trained and equipped on

hand to deal with that and they should have arrested the

perpetrators of the rioting at the time, rather than relying on

closed-circuit television images afterwards.

A Davies, a Lib Dem minister who works alongside Vince Cable in the

business department. He has responsibility for both officers

say he was keen to trumpet a policy the Lib Dems like, the end to the

closure of local post offices -- Ed Davey. I want the Post Office to

become the front line of government, national and local. Earlier this

year, Westminster Council awarded the Post Office a contract for

services such as parking tickets and permits and other things.

Westminster councillors are hard- headed people. They did not do it

for a cheap headline, they did it because the Post Office is great at

what it does. Westminster is not the only council which is working

with the Post Office. Sheffield Council have a pilot with it as

well. And now, I believe we should explore the links between councils

and post offices even more. Later this month, I will be writing to 25

councils asking them to join in. If you are one of the people I write

to, please say aye, yes. There are no guaranteed contracts here. I am

telling every post office manager there is a business opportunity

here they can seize. It is not just councils and the government which

see the Post Office as an attractive partner. Many banks,

Barclays, co-ops let their customers use the Post Office for

banking. I'm delighted to tell you that from this current Friday, for

the first time, NatWest customers will be able to do so as well. In

fact, just two banks are holding out - HSBC and Santander. Frankly,

I am really disappointed. Today, I hope that you will join me on

calling on them to think again and if they don't respond, maybe we

need another campaign. APPLAUSE. We need to tell these

banks, they have a responsibility to their customers and local

communities. If they still don't listen when we have campaigned, I

hope you will think about switching your account to another bank.

Davey. He had begun his speech by admitting being in coalition with

the party he had opposed all his life was not that easy. But he was

not going to complain about being in power. Earlier in the day I

spoke to Jeremy Brown, the Foreign Office Minister. I asked him if the

Tory bashing got his approval. doubt there will be some Lib Dem

bashing in the margins of the Conservative conference as well so

I let it wash over me. You're not going to be embarrassed when you

next bump into your Tory boss at the Foreign Office? No, I don't

think I will. I have missed some of what you call Tory bashing. Really?

It has been hard to avoid at this conference. I think all party

conferences, as long as I have been going to them, have had people

taking a knock at other parties and all three parties do it and

probably the public do not respond that well to it but the party

faithful enjoy it and it raises their spirits. Are you bashing the

Tories more than Labour? I don't know, maybe. Yes you are. They may

be concern in some quarters that we do not appear to have lost our

distinctiveness and maybe people feel there is an audience for

showing there is -- we are different in spirit but I think it

is pretty peripheral. The secretary of the 1922 Committee of

backbenchers, Mark Pritchard, he wants a vote on Britain's

membership of the European Union. That was in your Lib Dem manifesto

last year so presumably you are in favour of that? I don't think it is

anything which is likely to happen any time soon. Mark Pritchard, who

wino well, and he is a perfectly reasonable MP, I get on well with

him, but he needs to raise that to be the leader of his own party.

it was in your manifesto. The European Union has evolved

significantly after the last vote, the Liberal Democrats remain

committed to an in out referendum. The we had the courage agreement

which was forged in the days of the general election and there was no

commitment to a referendum of Britain's membership of the

European Union. Should we file this promise in your manifesto alongside

Trish and fees as not being worth the paper it was written on --

tuition fees. I would not put it that way. I was born in 1970. We

have had general elections from the 70s to 2005, no Lib Dem promises

our manifesto commitments were implemented in any of those

elections. In 2010, three-quarters of our manifesto commitments were

implemented which is an amazing achievement. We finished third in

the general election, or in coalition with the Conservatives in

the national interest, no party has a mandate to implement its

manifesto in full, but for the first time in my grandparents a'

lifetime, we are implementing large sections of our manifesto. People

have reason to be ecstatic that their vote counts for something and

the policies which they supporters at the general election are being

implemented in the government. That is it for today. Here in

Birmingham, the Lib Dems have yet to come to terms with the potential

consequences of Vince Cable's grim economic predictions. If they are

accurate, things could get worse for the party before it gets better,

if it ever does. Tomorrow, we will be hearing from

Steve Webb, the Work and Pensions minister, Energy Secretary Chris

Huhne and the communities minister, Andrew sternal. I will be back of