Conference Special Daily Politics

Conference Special

Similar Content

Browse content similar to Conference Special. Check below for episodes and series from the same categories and more!



Morning, Foulkes. Well come to this Daily Politics special live from


the Conservative Party conference in Manchester, where ministers are


in no mood to woo voters. David Cameron has already said sorry to


half the population, although exactly what for isn't clear. This


morning he courted the keep-fit brigade by jogging around


Manchester, and has announced the return of a good old Thatcherite


policy, the right to buy your council house. Decidedly retro feel


here in Manchester today, and as always in these days, may the


economy takes centre-stage. George Osborne is hoping that his speech


will prove to the country that he is alive with ideas. He has already


announced a freeze on council tax. We carry his speech live and


uninterrupted - at least, we hope it is uninterrupted! We will be


talking to the Employment Minister Chris Grayling. And is the party


divided over Europe? Is the Pope a Would you like to vote in our poll


for Daily Politics. It is about Europe. I must admit, Liam Fox's


bodyguard looks a bit scary, so I didn't want to push him too much.


All that and much more coming up in the next 120 minutes of public


service broadcasting at its finest. We have two of her Majesty's press


corps finest. Matthew Parris and Steve Richards are here. Only one


thing to talk about this morning, the Chancellor's speech. It is


always a big moment, the Monday morning of the conference. I don't


want to downplay the excitement of all the viewers tuning in. I have


just done my best! But the reality is, although I am sure in a


curiously Gordon Brown like way, he will have little surprises in the


speech, he has made his decisions. He has made his decision that there


will be no unaffordable tax cuts, and that there will be no spending


increases beyond the odd sack of money he finds here and there. Seve


hasn't got much to spend, because his side won't pull a lever. So


this will be a holding operation. In terms of substance, the pre-


Budget Report later in the year is a bigger moment. The mood he is


going for his steadiness, reassurance, us -- the calm when


storms are breaking out all over Europe. It is the one thing he has


going for him. The Economist did say at the weekend in an overall


critical piece was that his achievement was getting our over


all get healed so low at a time of difficult market forces. He has to


strike a difficult balance, our finances are potentially precarious,


and therefore he cannot extra tax cuts of things, and yet he also


wants to suggest that our position is not precarious because he is


Chancellor, and it is a difficult line to walk. He keeps saying we


have no money, we can't afford tax cuts, we will stick to our deficit


reduction. But here and there, little bunny rabbits are being


pulled out. Where does he get the money from? I don't know. He says


some departments haven't spent as much as they planned, he was a bit


of money. It reminded me of Gordon Brown's prudence with a purpose,


but every now and then he found a bit more from curious places. He is


doing that to get some headlines which are a bit more positive. They


say that one of our political problems is mainly associated with


cuts, so they are trying to get more positive headlines. But their


associated with cuts because that is the big decision they made a


year ago. They made a big call their despite warnings from some


economists as well as people like Ed Balls that there would be no


private sector scope to take over from the areas where they were


cutting. That has proven to be right and ominous and worrying for


them. But he is clearly not going to be starting to spend much more


than the odd bauble here and there. I want to talk about the mood of


the delegates out there. This is As the Tories gather here in


Manchester, there is a massive euro crisis looming across the Channel.


Our own economy is flatlining, living standards are slumping. So


what is the Prime Minister's response? To apologise to women, of


course. To Mac female MPs in particular, for slights that are


already largely forgotten. obviously said some things in the


House of Commons that came out wrong and caused the wrong


impression, and I deeply regret that. David Cameron has seen the


polling showing that the Tories are losing some of the women's Road.


But that is not what concerns the party faithful here. They are much


more exercised about Europe. Many of them would like to come out of


the EU altogether. Most certainly want a referendum on the matter.


They hate their human -- the European inspired Human Rights Act


and want to repatriate powers from Brussels to Britain. The party


managers don't want talk about any of that. They know the government's


ability to deliver his close to zero. This seems to be a growing


feeling in the country that a referendum is needed, and they


think it would be a good idea for us to have one. But we are in


coalition with the Liberal Democrats and have to give some


ground. It would give us a chance to say yes or no, in or out.


think we need to maintain a close relationship with the the EU,


because that is important. But I definitely think we mustn't go any


further. What of other concerns about Europe, it is the economy


that will dominate events at this conference. There will be no


loosening of the diaphanous robe -- deficit reduction straitjacket, but


ministers know that they need to be this a serious sounding about


growth as the about cutting the public spending. From plans to


build more houses to plans to change the labour laws. But none of


this will add up to an extra fiscal stimulus, so whether it makes any


Steve Richards and Matthew Parris are still with me. Therein are


relatively good mood out there. They are proud of the budget


deficit reduction. They are an easy, though, there are not sure it will


all come right. And with good cause. The context is an economy that is


not growing enough, and uncertainty as to which lead -- levers to pull


to get that growth again. And even if they pull the levers, will they


get the growth because of what is happening in the eurozone? If I


were David Cameron, I would be worried about Europe resurfacing as


an issue, not because there isn't substance to that debate, but


politics is partly about symbolism, and the reminder to voters of


Europe during a period when the Tories were losing votes like there


was no tomorrow I think would worry so-called modernisers. I don't


sense an incipient of growing Tory rebellion. I sensed a lot of little


explosions. There is no particular demand that the anti- Europeans are


making except for a referendum which nobody expects will actually


happen. See you have little bursts of applause at fringes and people


saying things slightly out of order, but I do not censor big rebellion.


Of course, they do feel vindicated. They became more and more Euro-


sceptic, look at the eurozone, it is a mess, they will say. The


problem is not really an economic one, because over all, the European


debt is a fraction of America or even Britain. They have got to be


careful of moving from claiming vindication to a sort of


schadenfreude. The worries hanging over this conference are not about


the government of a coalition of the politics, the worries about the


economics. The one thing, if the Conservative Party thinks it is the


voice of Middle England, and I say England advisedly, because it is


not Middle Scotland or even Wales, it is Middle England that is


hurting at the moment. It is the squeeze on living standards, the


worse since the 1920s. Yes, and the worry for them is not because it is


hurting at the moment. They always knew that the decisions they took


early on were too great a severity, but there we go. In my view, they


knew it would hurt now, but in their assumption, by year for, in


the build-up to an election, Middle England will be starting to feel


good again, and the worry is there is no indication that in the build-


up to the election, Middle England will feel that. You make light,


Andrew, and we all do, about apologising to England, but it is a


serious worry for the Conservative Party, because they have


traditionally always got better vote from women than from men. They


are seriously worried that Cameron doesn't seem to be... My concern is


more what he is apologising for than the apology itself. Just being


a man! We are coming to the end of our time. The fundamental thing is


where the coalition came into power, they thought they could get the


economic cycle in sync with the political cycle, and all would be


well by 2014, 2015. But that is now looking out of sync. Yes, I think


they thought, like 79-83, or 83-87, people would be starting to look


good, and they would get political reward for the tough decisions


taken earlier on, and maybe they still will, but it is looking


unlikely. A Conservative Party conference cover of Iain Duncan


Smith, a slightly tepid ovation there. We will give you a flavour


of what he had to say later. Now, should we be in or out? It is a


Tory conference. How can we not talk about Europe? The only way we


could do it is to send Adam out Oh, we don't have that. Adam is


still looking for his balls. So let's see if Giles can do better.


Let's talk while we try to find out about that about the state of the


Conservative Party itself. The average Conservative Party member


spends �722 coming to conferences. That is a lot of money. It is 80


quid just to register, and they charge the media fortune,


particularly if you are late. But the delegates have no formal say in


what happens. And they don't get really to vote on anything. When


did a conference ever change party policy? So why do they do it? Why


do they bother coming? He is Giles Far from the dizzying heights and


those at the top of the party, down on ground level there are the grass


roots. They are not an official body, not even a clearly definable


group. But there are important, MEPs and MPs and the leadership


ignore them at their peril. Why? Because the party couldn't operate


without them. These are the ordinary people, the ordinary


supporters, and they come in all sorts of species and varieties, but


they don't have elected office. These are the people who are


Conservatives because they feel it in their bones, not because they


have got it from a think-tank document. A pound the pavements and


knock on doors because they think it is the right thing to do, in


almost every sense of the word. True, their power is as a


collective rather than a group of individuals, but they are the


guardians of core conservatism. And if they don't like a policy, it is


not finished, it is not dead, but it may be difficult to sell,


because these people apart from the candidates are largely the people


who go on the doorstep doing the selling.


Giles then tilted to the left and rolled down that hill! Someone who


has never tilted to the left is Michael Fallon, the Conservative


deputy chairman. Welcome back to the Daily Politics. The grassroots


members get a raw deal, don't they? They pay a ton of money as they get


no power. Conferences are expensive, but it is not right that they get


no power. Ministers are here and listen to them, and they can come


to the debates. That his influence, not power. When did a conference


debate last change party policy? Party policies reflect what they


are saying. You want to get out more, get round the fringe events


and see the dialogue that is taking place. We do. But when did this


conference ever change Tory party policy? I can remember for example


on the poll tax, I can remember a party conference been told that we


should in turn -- introduce it early in Scotland, and we did. That


is what the Scots wanted, if you wanted -- if you recall. No, it is


what the Scottish Conservatives wanted. 85, 86? May be earlier than


that. Give me an example from recent history. I think that is


probably more difficult, but it think it was clear that Iain Duncan


Smith's leadership was coming to an end just before we had that change.


From this poll by Conservative home, a survey of the Tory grassroots,


the majority of these folk out there think the Lib Dems have too


much influence on the coalition. Are they right? No, they are not


right. The big thing is the Lib Dems are sticking with us on the


dealing of the deficit. There are some niggles, but we are two


different parties. A year ago, they were planning to merge the two


parties, there was another coalition order, but that hasn't


happened. David Cameron wasn't going to fight the referendum.


always knew that was rubbish. these things were said a year ago.


Although we are bound together in the bigger task of sorting out the


public finances in getting the economy to grow. You need to listen


to better people! Activists also want to see a firmer line ever


repatriating powers from Europe. I put it to you that will not happen


in this Parliament. That is because we didn't win the election outright.


We can't do that, but we have done the next best thing, which is put a


sovereignty lock so that any new powers being proposed, there has to


be a referendum here. That is now law, it is on the statute book. We


hope for an outright majority at the next election and we will


return to this issue of bringing more competent is back to


Westminster. But just for the virtue of clarity, I understand


that you would like to repatriate powers, too, and they would as well.


But the arithmetic means you cannot. It is not an issue for the agenda


That isn't practical at the moment given the shape of the coalition


that I can tell you when it comes to the election... Is there in the


European red-meat you can give them? It looks now there will be a


new treaty to deal with the mess in the eurozone and there is an


opportunity to deal with British, national interests?


We would be told that that would be the opportunity to repatriate


European powers. York irritating Lib Dem friends, as you call them,


it won't let you do that. There may be an opportunity on the new treaty


and there is also the budget renegotiation next year, another


opportunity to make sure our budget contribution is not increased.


There is an opportunity to stand up for British national interests and


we will take it. Do you agree with the chairman of the Treasury Select


Committee, Andrew Tyrie, a position you wanted, that the government's


efforts on growth are incoherent and inconsistent? No. We are all


impatient for faster growth. We want to see the economy grow. But


the government has to balance these things, we are trying to rebalance


the economy to make sure there is more emphasis on manufacturing and


private spending. That is coherent. We have fiscal and monetary policy


working together. Some of the things Andrew Tyrie has called for


you were here announced this week, like changes in employment law.


do we hear more of you, deputy chairman, than Baroness Warsi,


chairman of your party? She was speaking yesterday! But why are you


put more to represent the party than her when it comes to


programmes like this? There are different programmes. You saw


Baroness Warsi on Question Time, watched by a bigger audience than


are watching us at the moment. little while ago. No. You are right.


A If you want her next time, I will pass that on. We are grateful to


get anybody. Would you like her job? No. She is doing a fine job.


That is not what a lot of people have told me. She has only been


appointed party chairman. No, for a year. That is a long time in


politics, that is what Harold Wilson said. Would you not like to


be chairman of your party? Baroness Warsi is the chairman. When you are


a backbencher, when you were one without this title, you were


independent-minded, sometimes a little rebellious. How do you like


this, toeing the party line? Disagreeing with Andrew Tyrie, your


colleague? I bet if you were chairman of the Select Committee,


you would be saying the same. would not. He takes his own


personal view about climate change, for example. The government policy


is not incoherent. We have a very successful Chancellor taking the


economy through difficult times and ensuring that it does grow. Thank


you for being with us. We would like to see you again. Or the


baroness. We are easy. We have found Adam. Which means I can say,


should we be in or out of Europe? Let's see what he found out.


We got a new conference, which means a new set of balls. We have


got it true-blue question for delegates on the issue of Europe.


In or out? Very simple. Out. Why? We would save �48 million today.


Let's state in Europe for now. I tend to agree. It should be


economic and not political, so I say it in for now. I think we


should be in but I think there should be a repatriation of powers.


In or out? Not a second's hesitation. I felt that we are


better off with the Commonwealth and looking after our own interests


and we should go back to doing that in working with the rest of the


world rather than Europe, which is dragging us down and taking our


resources from where we need to spend them. The Norwegians just had


one word for it. No! You must be relieved that beat inbox has got


quite a lot of balls. Yes, I have seen more carefully controlled


assessments than that but it is in our national interest. Thank you,


Why do you say in? Because I think it is important for social and


economic integration, but I do not Why did you do that? Because my


father was Swiss, so he was European. I think we would be


completely mad to come out of Europe. 200 years from now, we


would be a banana republic on the edge of the Atlantic. If we had a


referendum, which we have always wanted, we would vote out. Dr Fox.


Would you like to vote in our poll? It is about Europe, one of your


favourite topics! I must admit, Liam Fox's bodyguard looked a bit


scary so I did not one to push him too much. Francis, would you like


to grab one of our balls. Europe, in or out? He just laughed!


They are going like hot cakes. EU, Who put in?! No! Who put their ball


GROANING. You are the only one going in. What is that like?


thought you were talking about belly buttons. That represents your


party. It tells me nothing at all at this stage. Very early days in


conference. The Prime Minister has set out our position very clearly


on our relationship with Europe and he has it absolutely right. Let's


see which side of the argument has one. The majority of people want


Britain to leave the EU, which is interesting, because the leadership


of the party would much prefer they put their balls in the inbox.


Adam telling us to put our balls where our thoughts are which is


usually what gets men into trouble in the first place! I am joined by


Jon Gaunt, chief executive of the UK out of the EU. I am not even


sure... It is not a title that rolls off the tongue. Our top team


have been desperately ringing around this morning to find a pro-


European Tory to take on Jon Gaunt. We failed miserably. The next task


will be to find the person in the newsroom who does not have a


hangover, because they do like a challenge. The balls showed a


majority want out. But you know and I know you are not going to get it.


What we are not given to get his it discussed at this conference. We


are living in a parallel world, as your non-scientific poll proved. We


have done a scientific poll, 2700 people, interviewed by YouGov, and


74% of Tories want a referendum. If there was a referendum, 68% want


out of Europe. But Mr Cameron says no, no, no, the country does not


want out of the EU. If he is so confident about it, let's have the


referendum! He will not because it would split his party asunder. Mr


Cameron and Mr Osborne and Mr Hague and various others would all


campaign to vote yes to stay in, whereas your polls suggest a lot of


these grassroots would say no. Why would any political leader vote for


that split? Because he is not just the leader of his party, he is the


leader of this country and he is meant to follow what the people


want. I am 50, anybody under 54 has not had a chance to vote on the EU.


That is an affront to democracy. Give me three good reasons why we


shouldn't have a referendum? Mr Cameron cannot find one. Your


highly paid researchers, maybe not, I have to be careful...! They could


not even get someone to come on to talk about it today. It is not


their fault! I know, because the Conservative hierarchy will not


talk about it! We had a referendums since 1975, we voted to stay in. We


have been a member of NATO since 1949 which has the power to send us


to war and we have never had a referendum on that! The referendum


we had before was about common market and now it is a European


superstate, the �48 million a day we pay to the EU. Why can't we have


a grown-up discussion? We had won about alternative vote which people


were not even bothered about. People are talking about this in


the coffee shops, in the bars, if they still have a job. This is what


people want to discuss. When you ask people what the most important


issue facing the country is, Europe comes 10th! It is going up that


table all the time. It is still 10th! Of course the economy will be


at the top at the moment but the EU affects everything! Immigration is


there, border control, defence. We do talk about that in our poll.


Between 80 and 90% won control of my net fisheries, borders and


farming. -- want control of our fisheries, borders and farming.


would accept the British public are broadly Euro-sceptic. Yes. 51%.


they are not obsessed with the issue in the way you are. I am not


obsessed about it. Really? I just want to have a referendum. What is


wrong with that? Hang on. I bet your bottom dollar, Andrew, or the


euro if you fancy, I bet if we had a referendum on the EU, there would


be a bigger turnout than there was on alternative vote. Can you tell


me again, give me one good reason why we should not have a


referendum? Let me put this to you. Not only, rightly or wrongly, that


is not for me to say, you are not going to get a referendum, and you


just heard Michael Fallon, the deputy chairman of his party,


saying they won't even be able to repatriate any powers from Brussels


in this Parliament, so you are going nowhere. They will have this


debate because of the 100,000 petition. It is smoke and mirrors.


We have to keep the pressure up. The people of this country are


demanding it and if we carry on with the pressure, we will get it.


Mr Cameron once power more than anything else and he can keep on


pretending for as long as he wants that most people want to stay in


Europe, he can keep been deluded, but eventually his moment of truth


will come and there will be a referendum in this country if the


power of the people get together and start demanding yet, which is


not a far right thing, it is about British people having the right to


say whether or not we want to be in the United States of Europe.


thought the person you were up against did rather well. Absolutely


brilliant! Couldn't you get a tub of lard? I will not go there!


LAUGHTER. Iain Duncan-Smith, when he was head, head, the boss of the


Tory party, he was not really that popular. As you heard Michael


Fallon say, he was at a Conservative conference that he


then realised that he was not going to be able to continue as leader.


He has reinvented himself. He is the welfare reform man and he is


something of a conference darling as a result because his reforms are


very popular with the party, and with the country. He spoke to the


I assure you that, at a time when the British public are having to


tighten their belts because of a difficult economy, and the European


Commission comes knocking on my door to order me to open up the


benefits system to benefit tourists and pay them benefits as and when


they arrive regardless of whether they work, I have a very simple


answer to them. No, no, no. APPLAUSE because as we gather here


in Manchester, all of us should be reminded that not far from these


buildings we are in now were streets under siege just two months


ago. We sought the best and the worst of Britain. At night, a


violent minority, intent on crime. By morning, the majority, clearing


up, helping each other in their communities and leading the fight


back. There is no justification, they never can be, and they never


will be, for what happened on those nights. And that is why it is right


that punishment is decisive and swift. Yet beyond that, we should


recognise there is a depressing and familiar context to what we saw.


That is the steady rise of an underclass in Britain. A group too


often characterised by chaos and dysfunction nullity, and governed


by a perverse set of values. Yet these problems are not new. We have


been reporting on them since I founded the Centre for Social


Justice seven years ago. Every now and then they reappear. Just think


of murdered Rees Jones, Gary Newlove and Baby Peter, kidnapped


Shannon Matthews and tortured Fiona Pilkington. And many, many others,


innocent victims of a broken, damaging culture. A culture that


generates the growing pocket in each community of deprivation.


Pockets in which social housing, once the support for families


working hard to give their children a better start, has too often


become a place for Inter generational worklessness,


hopelessness and dependency. The riots serve as a reminder to us all


about the deep and clear social problems that this government


inherited when we came to power. Remember, before the recession


began, we had over 4 million people stuck on out-of-work benefits. Many


for a decade or more. We had one of the highest levels of unsecured


personal debt in Western Europe. We had widespread family breakdown,


one of the highest teenage pregnancy rates in the whole of


western Europe. Poor parenting transmitting this functionality


from one generation to the next. At the C S J, we found that half of


all children born today will experience family breakdown by the


age of 16. That is a shocking statistic. And too often, these


children attended schools where their aspirations were suffocated


within a culture of low expectations. Social mobility had


virtually ground to a halt, and the section of society on the lowest


incomes had become static and too often entrenched. Too many children


born into such communities find that at best they remain in the


same condition as their parents as they grow older. And at the same


time, almost a fifth of all households are workless, and


spending on working-age welfare rocketed by 50% before the


recession. That is a remarkable statistic. We have found that over


a million children have parents addicted to drugs or alcohol.


Imagine. What hope for those children other than to become uses


and abuses in their turn? And from there it is just a short walk to


the revolving-door criminal justice system. With income quality at the


worst for regeneration, the last government left us with a welfare


system which treated symptoms not causes. And to each person in a


sense it is said, you are financially better off out of work,


you are better off if you play the system, and if you are bringing up


children, you are better off apart. What kind of message was that to


Britain? Is it any wonder's...? APPLAUSE. Is it any wonder that we


faced a break down of this sense of entitlement, and ending that is


like turning a supertanker around, but we must and we will deliver


that change. Last year when we came to conference, I and my colleagues


promised we would tackle that problem head-on. First, as Chris


said, we promised we would confront worklessness, and our benefits


system that had been nurtured for far too long. Our work programme is


now giving new skills to people from the jobs market. The voluntary


and private sector are being engaged to play and pay only when


they get people back to work, and as they help people sustain it by


developing the work habit, they are delivering value for money. It is


not just the case of the Big Society, but it is the case of the


Big Society now getting people back to work, and major success, and


ending the something or nothing culture, promise made, promise


delivered. APPLAUSE.And second, we also


promised to deal with problem of long-term sickness benefit. Too


often abused as an excuse for being out of work. Our work capability


assessment will review 1.5 million people on incapacity benefit, many


who who had been written off and abandoned, and 115,000 have already


been through this assessment. Those genuinely unable to work will


always be supported, however those who can work will look for work and


joined the work programme, and others who could work in the future


will actually get the tailored support for once that they need,


with more and more of those once parked on permanent out-of-work


benefits seeking work or in work. Conference, that is a promise made


and a promise delivered. APPLAUSE.As David Freud said


earlier on, we promise to build the Universal Credit, the most radical


change to benefit in regeneration. And the current system, and massive


multiple benefits paid at varying rates, is open to widespread abuse.


The result is a massive error and fraud, costing our country an


almost unbelievable �5 billion wasted. Worst of all, some people


lose up to 96p of every pound earned in work because of the way


their benefits are withdrawn. Would anybody here in this hall work if


they were having to pay 90 -- 96% in taxes? Especially if they could


earn a living by doing nothing at all? No wonder people are tempted


to sit at home. Universal Credit will ensure that you will always be


better off in work that out of work, and it will mean tax crowd --


taxpayers will get value for money. At last, a system of benefits that


places work at the heart of that system. What a remarkable


turnaround, and that is what we Which is why, for those fit for


work, I have a very simple message. Work with us, to find and stay in


employment, end you will get all the support that we can muster.


However, failure to seek work, to take work, or to stay in work, and


you will lose your benefits. This is our contract with the British


people, to bring an end to the something for nothing culture, that


is a promise we made and a promise This brings me to one of the most


important issues facing our country, the role of the family. This isn't


about government into peeling off - - interfering or finger-wagging. It


is about government recognising that stable two-parent families are


vital for the creation of a strong society. It is about parents taking


responsibility for their children, and we saw the results when that


doesn't happen back in August. And it is about Government realising


that we have to create a level playing field for the decisions


people make about their families. This means reversing the biases


against stability that we have seen build up too often in the system.


Build up over recent years, including the damaging financial


discouragement to couple formation. We also need to make sure that


support is available when families need it most. That is why I intend


our welfare reforms that we have already laid out, that they will


make any impact are amongst families on the lowest incomes. And


furthermore, remember, the Prime Minister has made it clear that in


this Parliament, the Government will recognise marriage in the tax


system. That is a promise. Iain Duncan Smith speaking to the


Conservative Party conference earlier this morning. He just stuck


his head into the BBC bubble and said good morning. With me is the


employment minister Chris Grayling. The Prime Minister apologised to


women yesterday, two in particular, about having said things in the


Commons that he thought was badly phrased. Wouldn't it be better,


make more sense, if he apologised to women for the fact that


unemployment among women is now the highest since 1996? I think what


women really want us to do is to set out ways to tackle that. 18


months ago we inherited some of the most difficult economic and


financial circumstances any government has ever taken over.


What we have also had since then is the emergence of a eurozone


financial crisis that nobody anticipated. There are huge


economic storm clouds alive, and we are not immune to those. But why


apologise for a backbencher remarked to Nadine Dorries, and not


apologise to women who were suffering the highest unemployment


since the last Tory government? Well, I would say that we are


trying to sort that problem out. We are not going to apologise for the


appalling record of the last government. It wasn't that high


enable 2010. This has happened under you. What we have seen in the


labour market over the last few months has been ups and downs. The


last figures were a big step in the wrong direction, but the previous


two were in the right direction. What we have had over the last 12


months, in overall terms, we have had unemployment flatlining. And we


have had an increase in the number of people in private sector


employment. My concern now is to make sure that we pursue policies


that will keep unemployment on a downward curve, even in difficult


Would it not make more sense to apologise to women for scrapping


child benefit for those among the 40% tax bracket? It is not just


women in the tax bracket who might lose their child benefit in a


couple of years. All of us would rather not have come into


government to take tough decisions like these and we regret having to


take them but we are not the ones who created the biggest financial


deficit in peacetime history. We are dealing with the mess created


under the previous government in some of the most difficult economic


circumstances in living memory. you are in no mood to apologise to


women, shouldn't you apologise for the tax credit cards and higher


child care costs which means it is left economic for women to find


jobs? -- less economic. Whilst we have taken some child tax credits,


we have increased it for those at the bottom of the scale. We know


there are difficult decisions to take that will affect women and men


alike but we are doing what we can to affect the poorest in society,


either through targeted financial support or some of the measures we


discussed this morning... Do you think it would be worth apologising


to women for having more men from a single Oxford college then you have


women in the Cabinet? When you have such a good influx of women MPs,


many a suspect will become ministers in the years ahead...


have fewer women in the Cabinet then you have men from one Oxford


college. That is very much a regret that we do not have more women in


the parliamentary party but we have taken a big step to rectify that.


In the last election we had one of the biggest intake of women MPs we


have ever had, many of them making a good impact on Parliament so what


I would say is we recognise we have a problem and one of the things


David Cameron did his dart to sort that out. When you see what happens


to chart tax credits, female unemployment, child care costs, is


there any wonder your party is playing badly among female voters -


- child tax credit? It has been equal among men and women. Your


party managers are talking about how they need to get the women's


vote back. You know that. There is a problem. I would like to win at


the votes of both men and women. understand that. We need policies


to stabilise the economy, create sustained employment growth, and


then we can start, as we rebuild our financial base, to target


support in those parts of our societies. Iain Duncan-Smith spoke


about tax breaks for marriage, for example. The Chancellor in your


government and people like you keep on saying, we've got no money to do


a fiscal stimulus, we can't break out of the deficit reduction


package, and yet within the last seven days, the Chancellor has


found �800 million to freeze council tax, �250 million to get


councils to do weekly dustbin collections, �150 million to


improve mobile phone coverage, �190 million on science projects. Where


is the money from? We have set a clear downward track for the


deficit but within the budgets we have got, we will try to do


everything we can to release money and provide additional support.


you have got extra money, would it not be better to try to spend it on


efforts to improve job creation? Let's take the example of the money


that is going to be used to keep council tax down. 800 million.


effect is it will help people under pressure with cost of living rises,


increased utility bills, food prices. But that is money that then


goes back into the economy and helps create jobs because it is


extra spending power. Although councils may have to find other


ways of raising money to make up for their hit the services will


take. You off freezing council tax at a time of 5% inflation -- you of


freezing. I do not believe all councils have done everything they


can so there is best value for money for taxpayers. There is


plenty that can be done without damaging frontline services.


have caused some controversy in the 2010 election campaign when you


supported the Christian bed and breakfast owners who did not want


to admit gay guests. It is now government policy to legalise same-


sex marriage. Does that please you? I am very happy with that and with


Civil Service partnerships. I voted for those changes and I will


support them. Chris Grayling, thank you. The Chancellor's due on his


feet in about 15 minutes. In a moment, we'll be hearing from the


Director General of the CBI, John Cridland. But first let's take a


look at the economic backdrop to his speech.


David Cameron once promised that sunshine would win the day. The


economic weather has since taken a turn for the worse though and


forecasts for economic growth have become increasingly gloomy. Last


month, the IMF cut its prediction for 2012 from 2.3 per cent to a


chilly 1.6 per cent. And George's most urgent priority, deficit


reduction, looks like it might be blown off course. Borrowing for


August was the highest for 18 years. Over the weekend, the Chair of the


Treasury Select Committee, the Conservative MP, Andrew Tyrie, also


rained on George's parade, saying his piecemeal policies were in need


of radical improvement. The outlook will continue to be blustery,


yesterday 30,000 public sector workers protested on the streets


here in Manchester. And a gigantic storm is brewing on the Continent.


Currently over Athens, it is likely to spread in the next few weeks.


The Chancellor is standing firm in the gale, insisting there can be no


plan B but is the increasing talk of infrastructure investment


represent a plan A plus? To discuss these matters are enjoyed by the


director-general of the CBI, which represents businesses, particularly


big businesses. Do you believe that these piecemeal measures will make


much difference to economic growth was mad if we get the right set of


announcements this autumn, with D- Day been 29th November when the


Chancellor makes his Autumn Statement. -- with D-Day being 29th


November. How much impact do you think the �800 million freeze on


council tax, 200 million for weekly dustbin collections, the money for


science projects... What is the impact for that? Most of it is


facing the domestic consumer and the voter. I have a different


shopping-list from the one we have had announced. Are you not


impressed with the shopping list? They are not really my baby. Social


housing, home-ownership has been an important objective. Will it do


anything to improve growth? On its own we need a separate set of


measures to boost first-time home ownership, to get roads and energy


infrastructure built but the Chancellor will not stop with this


list. What do you want him to announce? The big challenge is for


government to use its purchasing power and its leverage in the


market to get the private sector investing. The fact the government


does not have a lot of money does not mean we cannot have Investment.


Energy and transport will be primarily delivered by my


membership, private sector companies, if government gives them


permission to invest. What do you want them to do? On energy


infrastructure, companies will only build a new wind turbines and power


stations if the government sorts up the planning system. The government


is trying but has not succeeded. Businesses will invest instead of


the state in new roads and rail but they need longer rail franchises


and they might need toning so they get an income stream to pay for the


new roads. But none of that will make a blind bit of difference to


the economy this year and next. That will take ages. These are


long-term projects. It makes a huge difference to confidence. Business


confidence is hanging by a thread. Signals by government that it wants


investment will produce action in 2012 but it will change confidence


this year. Why under a government that has got a grip on deficits,


has put bond yields down, why should business confidence hang by


a thread? Because of what is happening around the world. The not


what the government is doing? No. The government cannot control what


is happening around the world. is what business investment is


stagnating. People do not have confidence about the eurozone. I am


looking for the Chancellor to tell us what the road to recovery is for


the eurozone. He cannot tell us that! He might as well say what it


will be in Mars! He is in touch with international leaders and he


knows what they are trying to do to resolve the crisis and that must be


resolved to boost confidence. the real problem not what the


government is or isn't doing, it lies with your members? Your


members are sitting on billions and billions of pounds of cash and they


are not investing in this country. They will only invest when they can


get a return for their shareholders. If confidence is and there, nobody


Spence, just like we consumers do not spend if we do not have


confidence. -- nobody spends. the problem is the private sector


is not investing? Absolutely, because of a global slowdown which


has disappointed the growth we thought we would be enjoying.


any prospect of improved growth in the next 18 months -- do you see?


Even your own chief economist predictions are gloomy? When you


have growth that is around 1%, for the ordinary citizen it does not


feel like growth, but it is still a lot better than the economy


contracting. In 2012 I think we will have growth of a similar order,


if not a little bit better. Give me a figure. Something in the order of


1.5% in the UK. That is just treading water. It is. But the


Chancellor has got to recognise that the future for the economy is


not the sort of growth we lived with up to 2007. It will be slower.


If it is 1.5 and you come back to talk to me next year, there will be


a lot more people unemployed. unemployment I think will write a


little bit more but it shouldn't hit the sort of figures it would


have done in previous downturns -- unemployment I think will rise. We


have a more flexible labour market. We will here at this conference


that new measures can keep the economy flexible. The Marks out of


10 for the Chancellor? Deficit reduction, 10 out of 10. One growth,


it is an emerging story and we are not at the end of the Thames. So


overall, I think the government has done well. Out of 10? Seven out of


10. You are a generous man. Thank you. I am glad we had longer to


talk than we did at the Labour conference, when our deliberations


were truncated. The Chancellor is not yet on his feet but the hall is


filling up for him. But plenty of empty seats around and it is not


that big. Let's hear what is going on at the moment. We will be


speaking to Justine Greening later and she is currently taking the


stage. Let's have a listen.... Raising the issue of accountability,


one of the great flaws of the regulatory regime that we inherited


is that there was the lack of clarity as to where responsibility


lies and unless you have got clarity on that, how can you have


proper accountability? We had the situation of, who is in charge, the


Bank of England, the FSA, the Treasury? That was not clear,


particularly on spotting those systemic weaknesses in the system,


there was nobody who had responsibility to deal with that


and the reforms we have put in place address that issue...


person speaking is their tax personality of the year! I am not


sure if that means he has paid a lot of tax to get there or managed


to avoid it. The Chancellor is due to address this conference, the


second most important speech of the week. The Prime Minister on


Wednesday afternoon. But it is a very important speech from George


He will tell us... We are not quite sure. For the moment, we will hear


from another great man. Not tax personality of the year but it is


something I will aspire to! It's like being chartered accountant of


the year! Probably not that much competition. Sorry... You can deal


with the letters. I love you, chartered accountants. We have had


lead to us a number of things. Big things like a freeze on council tax.


It will things like 150 million quid for mobile phone masts. He we


know the message. On the one hand, the plan ain't changing. He will


say it again and again, the plan is the plan is the plan and we are


sticking with it. His argument is, it would be a huge risk to make


quite small changes to the plan. The risk being, an increase in


interest rates and he will put a number on that, so if a 1% increase


means �10 billion of costs for businesses... At the same time,


that does not mean the government can't do anything, which is why we


have this string of little measures. I think we will get a hint of not


measures involving more spending but maybe a bit more on the


regulation. It is about monetary activism. They have a slogan behind


the scenes, and it will stay behind the scenes because it is not catchy.


They are fiscal Conservatives in order to be Monetary activists.


They are tough on tax in order to create the room for the Bank of


England. That is a big hint that they want the Bank of England to


extend quantitative easing when it meets on Thursday. We are also been


pointed in the direction of a speech being given by Adam Posen


from the Bank of England a while ago, which said isn't there more we


can do, and one other big things he is looking at is how do you get


lending go on to small and medium- sized businesses. His idea was a


new bank. A state bank. I am told it is a good idea but takes a long


time and I think we may get hints The problem with the position way


you say we will have fiscal conservatism, because we the


government control that, to allow the Bank of England to have a loose


monetary policy, is that you have no say over that. You are entirely


dependent on the analysis of the bank to do it. You are, and there


isn't much looser it can get. At cutting interest rates is not


possible. Then we talk about quantitative easing, some people


call it printing money, and there is a debate about whether it does


the job, or whether it will stoke inflation. But the hints are that


the bank is looking at that and could do it as soon as this


Thursday. But there are a lot closer than you might think, in


that yes, the bank is independent, but at all stages, George Osborne


has effectively been quoting Mervyn King in saying that if we do this,


it allows them to do that. Can they have an open conversation? Formally,


constitutionally not. But you think they look at each other in a closed


room and say, can we do this, read each other's minutes? Of course


they do. When you look at these announcements that are coming in,


there are pretty good for party conferences. Some of them are quite


popular. But if you're looking at them from the outside, you would


say, in the grand scheme of things, they don't matter. But in a sense,


that is what is interesting. George Osborne could have felt under a


great deal of pressure. Labour started to win an argument that it


was growth of that mattered as much as the deficit, made an argument


for cutting VAT to get the economy moving. You have parts of the


business community, traditionally quite right wing, saying cut taxes


quicker. Andrew Tyrie, the chairman of the Treasury Select Committee,


said the government's growth strategy was incoherent. In the


spate of that, you get a flurry of, we are doing this, that, the other.


But you don't get a new plan, because the Chancellor's view is we


don't need a new plan, and the risk of even appearing to look like


you're looking at one is not worth it. So the die is cast. In terms of


the personality of the Chancellor, how would you assess his standing


among the Tory faithful? Extraordinarily high. When he came


to this conference a couple of years ago, the muttering,


particularly amongst the people who gave money to the Tory party,


largely people from the city of London, was, abbot of a boy doing a


man's job. Since he has got the job, he has won the praise of seeming


comfortable in it, filling his suit. Peter Mandelson said the same thing


quite recently. But the nervousness that a certain now is, my God, I


hope he is right. Because if he is not, and we find that growth is


flat next year, what does he do then? He will not have to revise


his plan in November. He will undoubtedly having to say that he


is borrowing more money than he plans. He will undoubtedly say that


the plan allows for that. But if we get to the Budget in March, the


following year's Autumn Statement, and the economy is flat, he will


have to have a new plan. conference is getting to its feet


because the Prime Minister has walked in to take his seat. This is


in anticipation of the Chancellor's speech. Remarkable given the


difficulties of going through what you and I catalogue as the


Brown/Blair years. There is no sense that you would get more than


a playing card between Mr Brown has Mr -- Mr Osborne and Mr Carron.


thing they did to avoid the Blair- Brown problem was to move George


Osborne into Number 11 almost full time. You see him around Downing


Street much more than you see them around the Treasury. He is much


more in Downing Street. He has his office there. He has an office in


the Treasury as well, but he starts his day in Downing Street and has


his advisers there. He has another strategic meeting late in the


afternoon. That is where he sees his home. Well, his home for the


next half-hour is going to be the Conservative conference here in


Manchester. The Chancellor is going up to the podium, taking the


applause of the party faithful. He will now address the conference.


Here is the Chancellor of the Today all around a country, indeed,


all round the world, people are anxious. Worried about their jobs,


their families, how they are going to pay the bills. I come to you


with words of resolve, determination, confidence and


belief. Belief that the British people will overcome this challenge


as we have overcome so many before. Together, we will ride out the


storm. I don't want any one to


underestimate the gravity of the situation facing the world economy.


But I also don't want anyone to think that the situation is


hopeless, that there is nothing we can do. Yes, the difficulties are


great. But we should be careful not to talk ourselves into something


worse. And we should never take our eyes off the prize. A British


economy freed from its debts, growing strongly, spreading


prosperity to all our people, so we can fulfil that solemn promise to


the next generation. We will leave the world a better place than we


found it. Our economic problems were not have


visited on this country by some cruel act of God or blind force of


nature. They were created by the mistakes of human beings and the


endeavour of human beings can put them right. What were those


mistakes? There were three of them. And they were all connected with


each other. First, the last government borrowed too much money.


They thought you could borrow without regard to ability to pay,


spend without regard for value for money, all on the premise the boom


would never end in bust. They saddled the country with the worst


debt crisis in our history. What a catastrophic mistake. Let us make


sure it never happens again. Economic adviser to Gordon Brown. I


am not sure I would put that on my CV if I was Ed Balls! It is like


personal trainer to Eric Pickles. Although I have to say, when it


comes to chasing down council waste, no one runs faster than our Eric.


The second mistake was made by banks who ran up staggering debts


of their own. Buying financial instruments even they couldn't


understand. The banks and those regulating them are believed that


the bubble would never stop growing, that the markets will always self-


correcting, that greed was always good, that their schemes would


never collapse, that none of the debts would ever turn bad, and the


message from this hall is clear. They let down their customers, they


let down their shareholders and they let down this country.


And there was a third mistake. Our European neighbours plunged


headlong into the euro without thinking through the consequences.


How could they believe that countries like Germany and Greece


could share the same currency when they had vastly different economies


and no mechanism to adjust? For generations to come, for


generations to come, people will say, thank God Britain didn't join


And let us recognise the foresight and the fortitude, the street


stalls and the leaflets, the pavement pounding and the


canvassing of the people in this hall today who campaigned to keep


And there is one man here today who precisely saw the consequences,


warned of them, campaigned against them, put his reputation on the


line to oppose them, was ridiculed for it, but who stuck to his cause


and was proved right, my friend William Hague.


I have waited 10 years to say that! And it is thanks to the leadership


of someone else here today that we have kept Britain out of the


eurozone bail out of Greece, out of the permanent bail-out fund, our


Prime Minister, the country's leader, David Cameron.


And this is also my opportunity to thank my Treasury team, Mark


Holborn, Justine Greening, David Gore, who you have just been


hearing from, Greg Hands and Danny Alexander, they are diligent and


dedicated in their service to our Tomorrow morning I will travel to a


meeting of European finance ministers in Luxembourg. My


objective is Clear - the eurozone's Financial Fund needs maximum


firepower. The eurozone needs to strengthen its banks. And the


eurozone needs to end all speculation, decide what they are


going to do with Greece and then Britain is not immune to all this


instability. Indeed, the resolution of the eurozone debt crisis is the


single biggest boost to confidence that could happen to the British


economy this autumn. The time to resolve the crisis is now. They


have got to get out and fix their roof even though it is already


A debt crisis in government, a debt crisis in the banks, a debt crisis


in the euro. We in Britain are paying a high price for those


mistakes. The price of jobs lost, Korea has never started, hopes


dimmed -- career never started. Our covenant is this, we will not stand


by and let it happen. We will do anything, work with anything,


overcome every obstacle in our path to jobs and prosperity so that


together we will ride out the storm. Each day, people suggest to me


different things we should be doing. Some say borrow more for more


spending. Or they say, borrow more for temporary cut in tax. So you


would have to put taxes up even more later. I am a believer in tax


cuts, permanent tax cuts, paid for by sound public finances. Right now,


a temporary tax cuts or more spending are two sides have exactly


the same coin. A coin that has to be borrowed, more debt that has to


be paid off. I know we are asking a lot from people. And I want them to


know that when these arguments are put to me, I consider them


carefully. Don't think I haven't thought hard about what more we


could do, but I don't explore every single option. I do. But borrowing


too much is the cause of Britain's Let's say we added to the


structural deficit with more borrowing. We would be gambling


that priceless fiscal credibility that this government has turned


with the international markets on the bet that borrowing a few


billion pounds more would make all the difference. We would be


hazarding of our precious low interest rates on a change of


course that would put the rates up. In the full knowledge that any


extra billions of pounds of public spending would be wiped out by


billions of pounds more in high interest costs of families,


businesses and taxpayers. We would be abandoning the deficit plan that


has brought us the stability other nations grave for 5, 10, �20


billion more -- of a nation's craves. This is on the illusion


that such sums would transform the economy when we are already


spending three trillion pounds over the next four years. We would be


risking our nation's credit rating for a few billion pounds more. When


that amount is dwarfed, dwarfed, by the scale and the power of the


daily flows of money on international bond market, swirling


around, ready to pick of the next country that lacks the will to deal


with its debts. Conference, we will not take that risk. We are in a


debt crisis. You can't borrow your And incidentally, the fact that the


world is in the grips of the debt crisis has not undermined that


argument, it has made it stronger. For too long, Britain has been


running away from its problems. We have to face up to them, we have to


confront them, we must fix them. We must deal with our debts. Weekend


and block the banking system. We will help businesses create new


jobs. Here is howl. First we will help the Bank of England keep


interest rates at record lows while the economy is weak. It is the most


powerful stimulus that exists and nothing would be more fatal for an


economy as indebted as ours then a sharp rise in interest rates. Look


at our neighbours today. In Greece, market rates a 20%. In Portugal,


they are more than 10%. In Spain and Italy, they are now over 5%.


Our budget deficit is bigger than the lot of them. But in Britain,


our market interest rates are 2.5% today. Fiscal credibility is not


some abstract concept. It keeps families in their homes, firms in


business, people in their jobs. A 1% rise in our interest rates today


would add �10 billion to family mortgage bills alone at the worst


possible time. We have a deficit plan that commands the confidence


of world markets and has brought stability at home. It is a plan


flexible enough to respond to good times and bad, a plan independently


verified by our new Office for Budget Responsibility, backed by a


government united in delivering it and a parliament that it has


legislated for it. Very few countries can say that today. The


fact that Britain can is thanks to the resolve of his party and we are


generous enough to stay this. It is thanks to the resolve of the


Liberal Democrats, too. Working as a coalition, together, in the


Keeping interest rates as low as possible for as long as possible is


crucial for dealing with the debt crisis. It is the first part of our


plan. But because banks are damaged, they won't lend at the current low


rates. It is like putting your foot on the accelerator but because the


transition mechanism isn't working properly, the car wheels don't


respond. So this is the second part of our plan. We have got to get


credit flowing in our economy. Credit means investments,


Investment means jobs. We are making sure that the British banks


are strong enough. Holding enough capital to cover loans in an


emergency. We have expanded loan guarantees. We have struck a deal


with the high-street lenders to increase lending to small


businesses by 15% this year. But all of this may not be enough. Of


course the Bank of England, at their own independent judgment --


have their own independent judgment to make on quantitative easing. I


have said before, I will follow my predecessor and his Treasury


approval if asked. But there is more the government itself can do


to encourage investment. David Cameron and I have always said we


would be fiscal Conservatives and Monetary activists. Everyone knows


that Britain's small firms are struggling to get credit and that


banks are weak. So as part of my determination to get the economy


moving, I have set the Treasury to work on ways to inject money


directly into parts of the economy that need it such as small business.


It is known as credit easing. It is another form of monetary activism.


It is similar to the National Loan guarantee Scheme we talked about in


opposition. It could help prevent another credit crunch, provide a


real boost to British business, and overtime help solve that age-old


problem in Britain. Not enough long-term investment in small


businesses and enterprise. And if this party is anything it is the


party of Small Business & All this brings us to the question


about the kind of economy we want to see and the kind of banking


system we want to have. We all know what kind of banking system we


don't want. Let's look at what happened at the Royal Bank of


Scotland. A bank where one individual was so focused on his


own success, his own self- aggrandisement, that he put at risk


the likelihood of a 200,000 people -- of over 200,000 people who


worked at the Bank, the 15 million people who entrusted the bank with


their life savings, the 60 million taxpayers who had to bail out the


bank. That is what I mean by irresponsibility in business and it


is what I mean by irresponsibility in government, when they don't


properly regulate banks, don't control public finances and leave


our country exposed to the whims of the international money markets. So


I ask Ed Miliband, you say you would not bring back Fred Goodwin


to run our banking system, so why on earth will you bring back Ed


Balls to run our economy? There of business practices that


are irresponsible -- there are business practices. We will deal


with them with a regulatory system that works but Labour's latest


policy, that there should be two newly created tax rates, is frankly


ridiculous. One for producers, one for predators, one for companies a


Labour Chancellor likes, one for companies a Labour chancellor


doesn't like. Imagine a Labour chancellor sitting in Number 11


every morning with a copy of the Financial Times in one hand and the


Guardian in the other, weighing up corporate Britain on some home-made


scales of justice. What are completely unworkable idea! -- What


a completely unworkable idea! I think it is the moment that Labour,


as an opposition, ceased to be either a producer or a predator.


And there was a time when Labour's seemed briefly to realise that to


win elections it has to accommodate itself to their real-world, stop


being anti-business, make peace with Middle Britain. Not now. It is


over. Once they cheat Tony Blair, now they boo him. -- once they


cheered for Tony Blair. I fought three elections against Tony Blair


and an know the damage he did to our country but they were not just


booing him, they were booing the millions of voters who once turned


to Labour because they thought Labour had changed. They were


booing the business people who thought Labour wanted to work with


them. They were booing all those people who thought Labour had


finally woken up to the modern world. But to all of those people


who heard that, you realise they were aimed at them, for all those


people who want a strong society and a strong economy, to those


people abandoned by Labour today I say the Conservative Party will be


So we are repairing the damage of a major responsibility. Ending the


something for nothing society that flourished during it. Reforming


welfare, yes, so that those who work get more than those who refuse


to. But also introducing the first ever permanent bank tax. The first


ever higher levy far long-stay in non-doms, the first ever treaty


with Switzerland to get back tax owed to this country. I want people


to be successful, to create wealth and jobs, to get the most out of


society and to put something back. But I'll tell you what this


Conservative Chancellor says to rich people who invade their taxes:


We will fine you and we will find your money. -- we will fine you.


The days of getting away with it are absolutely over. Just as tough


on tax-evasion as benefit fraud. We are all in this together. And that


includes the banking sector. Yes, we want Britain to remain number


one, the No. 1, International Centre for finance. Employee in


thousands of people across this country. Driving at business to


Hong Kong and New York and Zurich, it would be completely self-


defeating. I understand the anger people feel about what happened. I


share it. But ramping up the populist rhetoric is not going to


stop banks failing. We have got to do their real work to ensure that


Britain's largest industry is no longer the British taxpayer's


largest risk. That is why we are abolishing Labour's failed


tripartite system and putting the Bank of England back in charge of


monitoring debt, a responsibility that should never have been taken


It is why we have committed to the principles in the vicar's report we


commissioned, to ring-fence our high-street branches, to protect


them from the risky trading floor activities. We changed our party so


we can tackle the banks without fear, so we can speak truth to


power and wealth, and so that society and economy that we build


works for everyone. Reforming finance, keeping interest rates low,


getting credit to small businesses, helping fix the eurozone crisis.


These are all essential for growth and that would be ambition enough


for most governments. But they are not enough for us. We have to help


businesses create tomorrow's jobs. My children are eight and ten years


old. I don't want them to read about how China has just built the


world's most advanced aircraft, how India is leading the globe in


computer design, and have to say to my children, that used to be


Britain. I want Britain to be the home of the greatest scientists,


the greatest engineers, the greatest businesses. A land of


innovators. And we can be! The sacrifices we make, that is what


they are for. The determination I show, that is what drives me.


Tomorrow's world is being shaped here in Manchester. Manchester. The


first city of the Industrial Revolution. The city were the first


computer was built. Where Rutherford split the atom and the


Miliband brothers split the Labour Party.


Manchester, home to the two brilliant scientists I met this


morning who have just been awarded the Nobel Prize for Physics. Their


prize was for the discovery of a substance that is the strongest,


finished, best conductive material known to science, to be used from


everything to aircraft wings to microchips. The inventors could


have gone anywhere in the world to conduct their research, but they


chose the University of Manchester. And now countries like Singapore,


Korea, America, are trying to lure them overseas, but they want to


stay here in Britain. They think it is the best country in the world


for them and their work. We have already protected the science


budget, and today I confirm that on top of that we will fund a national


research programme that will take this Nobel prize-winning discovery


from the British laboratory to the British factory floor.


And we are going to her front the forefront of computing, to give the


best computers to our designers and engineers. The letters stop


thinking that the only growth that can take place happens in one


corner of the industry. We have got to get Britain making things again.


I have never believed that Government should just stand on the


sidelines, that it had no role to play in fostering enterprise and


creating jobs. I will intervene where the market doesn't work and


set it free where it does. We have been doing a huge amount in the


past 16 months to make Britain open for business. We are cutting


business taxes to one of the lowest rates in the developed world. We


are cutting income tax bills for over 20 million people and taking


over a million of the lowest paid out of tax altogether. At a time of


deficit-reduction, we are increasing capital spending on


roads and railways. We are creating a super-fast broadband network. We


are reforming our planning laws so that they work for our economy and


our countryside. We are a foreign - - we are reforming the tax system


so that multinational companies come to Britain instead of leaving.


We are freezing rates and cutting taxes for small businesses. Don't


tell me this Government isn't going for growth. And that is not it. We


are today extending mobile phone coverage up to 6 million people.


The New Right to Buy and housing plans David Cameron announced


yesterday will build 200,000 new houses, create 400,000 new jobs. We


are launching new enterprise zones and helping unemployed people get


jobs through our work programme, helping them start businesses with


our Enterprise Allowance. We are transforming education, and we are


reforming public sector pensions so they are generous to public


servants and also fair to tax payers.


And let me say this to the unions. To go on strike at a time like this


when you are being offered pensions far more generous than other people


could ever afford will hit growth, cost jobs, it is totally


irresponsible. We have made all these changes in


the space of just 16 months. But it is not enough, and I know that. We


need to do more. We need to make it easier for businesses to hire


people. I know it is important to respect employment rights. It is


the heritage of our party. 136 years ago, it was a Conservative


politician under a Conservative government who introduced the


Chimney sweeper's act and brought an end to children becoming sweeps.


Unlike today, in their long battle, our predecessors did not always


have the good fortune of being supported by the Liberals. But we


also respect the right of the unemployed to get a job and not be


priced out of the labour market. And we respect the right over those


who have spent their whole lives are building up a business not to


see that achievement destroyed by a vexatious appeal to an employment


tribunal. So we are now going to make it much less risky for


businesses to hire people. We will double to two years the amount of


time you can employ someone before the risk of an unfair dismissal


And I can tell you today, we are going to introduce for the first


time ever a fee for taking a case to a tribunal that litigants only


We are ending the one-way bet We know that a decade of


environmental laws and regulations are piling costs on the energy


bills of households and companies. Yes, climate change is a man-made


disaster. Yes, we need international agreement to stop it.


Yes, we must have investment in green energy, and that is why I


gave the go-ahead to the world's first green investment bank. But


Britain makes up less than 2% of the world's carbon emissions, to


China and America's 40%. We are not going to save the planet by putting


our country out of business. So let's at the very least resolve


that will cut our carbon emissions no slower, but also no faster than


our fellow countries in Europe. That is what I have insisted on in


the recent carbon budget. And there is one more thing I can tell you.


We have had to make difficult decisions about public spending,


careful choices about what to protect, so by relentlessly


eliminating waste we could afford to protect funding for Conservative


rarities like the NHS and schools. -- Conservative priorities. Two


years ago I stood here and said we would cut the cost of central


bureaucracy by one-third. Some were sceptical. But we are doing it, and


we are ahead of plan. I can tell you that next year we will again


freeze the council tax. When so many bills are going up,


council tax can be the one Bill that doesn't. That is help for


families, so together we ride out that storm. Resolve, determination,


confidence and belief. Resolve that we will deal with our debts,


reshape our state to live within our means. Determination that we


will see through our policy, keep interest rates low and get credit


flowing. Confidence that there are things we can do and measures we


will take to get the economy moving again and create jobs. And belief.


We do all this because we believe. We do all this because we believe


that our country's best days lie ahead of it. We do all this because


we are optimistic for the future. We do all this because we know that


the sacrifice is our country makes will not be made in vain, that the


difficult choices we have made will not have been made for nothing. We


do all this for a better Britain and a stronger economy, to which


everyone can contribute, from which everyone will gain, an economy that


works for all. I don't pretend to you that these are not difficult


days, and that there are not difficult days ahead, but together


we will ride out the storm, and together we will move into the


calmer, brighter sees beyond. Thank you.


The Chancellor of the Exchequer finishes his speech to the


Conservative Party conference at 2011 to a standing ovation. He said


that the biggest thing that would spur growth in Britain was not


anything that the British government would do, but the


resolution of the euro-zone debt crisis, and he had some suggestions


as to how they might do that. He wasn't changing from his fiscal


deficit was up -- deficit reduction policy, he said to do that would


gamble with credibility. That standing ovation ended almost as


quickly as it started. They are all rushing out now for lunch. He said


any stimulus would be wiped out by a rise in interest rate and you


cannot borrow your way out of date, which is exactly what Jim Callaghan


was Prime Minister told a conference in 1976 in the midst of


that financial crisis. He talked about the need for more credit


easing and monetary activism. What he meant by that other than Q E


still isn't that clear. He did a bit of Labour bashing, which


probably means the Prime Minister went, and said that the public


sector unions if they went on strike would be totally


irresponsible. In a moment I would be talking to Justine Greening, but


let's hear from a Labour spokesman who is in Westminster. Mr Leslie,


give me your overall reaction to the Chancellor's remarks. The first


thing is how staggering it is that the Chancellor gave so little


attention to the growth problem that is in the economy. He has seen


now a flatlining economy for the past nine months, despite the fact


that we were coming out of difficulties, recovering quite well


just after the election. And yet his speech really seemed incredibly


complacent and quite frankly out of touch. He was out of touch with the


reality of costs ordinary people face and the difficulty of business.


There was no plan for growth, we had suggested a number of plans he


could take, and he didn't pick up on any of them. There are other


organisations clamouring for action on growth, and it is not there from


George Osborne. This guy is completely out of touch. What do


you say to his point that other economic commentators have made too,


that if you add to the deficit with a fiscal stimulus, increase the


amount of money on top of the huge amount we are already borrowing,


you will wipe out any game because of higher interest rates. The bond


market are also wanting to see an economy that has revenues and


money's coming in through the Exchequer, and the way to do that


is to grow and to prosper, insurer the Chancellor has to understand


that without economic growth, you're never going to solve the


deficit. It is almost beyond belief that he is not listening to those


organisations saying that. The IMF have been saying it, the CBI, the


Federation for small businesses, even conservative backbenchers are


saying that they doubt his credibility on growth. He has got


to change his tune very rapidly. you think there is no correlation


between... We are paying German levels of deals on our bombs at the


moment because the market are saying we have a credible deficit


reduction plan. If you look at Spain, Portugal, Italy, Plan, they


don't believe that and they are paying massive yield on their bonds.


Do you think there is no connection? It is as much to do


with the fact that we are not in the eurozone, we have a central


bank that can control monetary policy. I don't think if you talk


to many players in the city, they think it is because of George


Osborne's policy alone. What he has got to start delivering fairly soon


be some real growth back into the economy. Otherwise the deficit will


continue to be great. He shows no sign of realising that fundamental


economic fact. Let me ask you a couple of specifics. Would Labour


freeze the council tax in 201213? - - in 2012/13? We thought that they


were going to do this all along. It was something they pre-announced


three years ago. I am asking what you would do. What you have to


recognise with council tax is that you might be able to stop it going


up, but you certainly can't cut it. What we would do is to focus on VAT,


a temporary cut in VAT. So you wouldn't freeze council tax? There


are other mechanisms, for instant national insurance help for small


businesses. George Osborne might be saying that council tax is frozen


for one year only, but what about the fees and charges? People no


councils have a habit of piling on parking charges, charges for pest


control, cremations, all sorts of things. Councils will raise revenue


from other ways. And that is what happens, people know they will have


to pay more, just as they pay more in inflation, gas and electricity.


People are really hurting out there. I will take that as a No, you


wouldn't freeze council tax. Are you in favour of weekly been


collections? I think a lot of people would like them. What about


Labour? A lot of councils support this up and down the country. But


what is curious is that Eric Pickles is finding �250 million,


and very centralising policy that he personally was to see so much


for localism, but he is not explaining where the money is


coming from. What we need is money going into the economy, getting


Final question, it is quite specific. The Chancellor said


steady as she goes, no change in the deficit reduction, no


additional stimulus. Quantify for us, what is the total size that the


Labour Party believes the stimulus should be? We set out a package of


five different suggestions. Just give me a figure. I don't have the


precise figure because there is a complex set of changes. For example,


National Insurance support for small businesses. You don't really


know precisely how many small businesses will take up that offer.


You must have a ballpark figure. would have to be a lot more


accurate than the figures the Government put out. They set aside


a billion pounds for new businesses and only a small... I did not ask


you about the government. I asked you about Labour policy. If you


can't give me a figure for your stimulus, maybe next time we meet


you can give me a cigar? I cannot write a budget for you here. We


will have a tough fiscal policy and it is important people realise that.


Thank you Mr Leslie. I am joined now by Nick Robinson. What was


interesting was the tone. He left the stage very soon afterwards. It


was very low key. Why was there so little applause? Because he is a


fiscal Conservative, he is quite popular there. I think there was


almost a conscious effort by him to be low key and not very political,


and to appear that way. I think their aim is to say, we are running


the country and haven't got time for that party stuff. Of course


there was a massive party claimed at the heart of it, that it would


be dangerous to change the plan, that you could not have any


flexibility in either direction. The most significant announcement


was the idea of so-called credit easing, although we have no detail


on that. Can the Government find a wait to get money to small


businesses who are not getting it from the banks. Adam Posen was


someone from the Bank of England and the Monetary Policy Committee


who had argued that there should be a special new state bank. My


understanding is that the government is interested in that


idea but worried it will take too long to set up so what they are


looking at now is whether it is possible for government to


underwrite Rhones -- loans to businesses in other ways, they


could offer guarantees to banks giving loans to small businesses


for example, but in economic terms that is likely to be the most


important announcement. The Justine Greening, treasury minister, has


joined us. What does credit easing mean? Effectively it means


channelling more money through to SMEs, who are finding it much


harder than big companies to access the capital to invest in their


businesses. I understand the problem. What is the policy


mechanism? Nick has explained... want you to explain. He is a


journalist, you are the minister. We can issue bonds, for example, we


can also effectively purchased private sector assets... What do


you mean, issue bonds? At the moment in the States there is a


very vibrant market in this area where you see not just big


companies who are able to sell bonds into the market and have them


trading in a secondary market, that does not happen so much in the UK,


so we want to go beyond simply the quantitative easing that the Bank


of England is doing but to have some of that more targeted perhaps


so we are looking at a variety... know that. Give me a policy that


follows this principle. We will be setting those out over the coming


months. You must have some options. Absolutely! We can even actively


put bonds out there ourselves, we can underwrite other debts that


companies... There is a variety of different ways we can do this.


is very interesting. So the government, obviously they already


issues a lot of bonds, they are mainly being bought by the Bank of


England, printing money, but the government would issue more bonds,


so it would add to government borrowing... No. The assets you


would be purchasing are liquid so therefore it would not be part of


debt. A but you are still borrowing to produce money. No. The


government is already issuing giltss... What would you do with


the bonds to help small businesses? For the moment, government already


issues gilts. Part of that funding would then be more channel banned


it is able to be at the moment through to the small and medium-


size companies -- more channelled than it is able to be. If you are


one of the SMEs in the UK, you probably have to go to a high-


street bank to do more borrowing. What we are saying is we want to


create some new channels by which small and medium companies can go


more to the market to be able to access liquidity. So would you or


would you not be issuing more bonds to do this? Would you be borrowing


more to do it? No. We would be purchasing bonds. One of the


options... Say the government would buy bonds? No. You just said that.


I said we would be looking at a number of different ways in which


to make sure we can better get financed route... I accept the


principle and it is a very important one and the reason I am


going on it is because Mr Osborne has said there is no leeway on


fiscal policy, I am sitting to the deficit reduction plan. But he


talked about monetary activism and credit easing. We know one of the


ways of doing that is printing more money. Let's park that. You think


you have created conditions that can allow the bank to do that if it


so wishes and the implication I get is you would like the bank to do


that. What I am trying to work out is what else does it mean and in


what way it would you act to help small businesses get money? As I


have been saying it can take the form of underwriting, providing


guarantees in a way that we don't do at the moment. So if I was a


small business and I wanted to borrow money from the Bank, you


would guarantee that Det? That is one of the options that we have got.


Would that be uncovered debt or would you ask for something to


cover the guarantee? Would I have to put something up? My House?


are getting something in return in relation to what it is secured on


but it is a liquid assets and therefore it would not be part of


our debt and the other part of this is about creating a longer term


secondary market. If you are a big company in the UK, you can already


issued bonds. The point is important... The big companies do


not have to issue bonds because they are sitting on a pile of cash.


That is not the issue. The director-general of the CBI has sat


in the studio and admitted that companies are awash with money but


they are not investing. What I am trying to get to, I will stop


interrupting you, is how credit easing in your mind will help small


businesses and what you intend to do. It will mean they do not have


to rely on high street banks. what will they do? Underwriting,


providing guarantees, getting out there and making sure we work with


the Bank of England to see some of the quantitative easing going


directly to businesses, and those plans are being worked on over the


coming weeks. George will make more of a statement in November. It is


good news for businesses because at the moment, if you are a big


company, you can trade your debts in the secondary market. That is


not possible for SMEs. What we are doing is creating in the long term,


and this is the point I wanted to make, the kind of market we see


operating in places like the USA. The London Stock Exchange does have


a very small market at the moment and we want to look at what we can


do to create that market into a bigger one. Are you telling me that


if the government guarantees small business borrowing, you will not be


adding to the government's debt obligations? Yes. In the nature of


the assets, they will be liquid and therefore, as a result, they will


not be going on the balance sheet. So why did you criticised the


previous Labour government for not putting PFI on the balance sheet?


Because that was a different form of non-liquid commitment, which


governments cannot get out of. have you not then put PFI onto the


balance sheet? In fact, we are looking at producing something


which is going to show these PFI liabilities on the balance sheet


and you will be aware as well that one of the first things the OBR did


was look at the overall position of UK finances, including debt and the


balance sheets side of finances, which included PFI and public


sector pensions, which is another thing the Chancellor talked about.


Mick Coburn what did you make about the overall policy -- Nick


Robinson,? A lot of people will be wondering what this credit easing


means. I don't think round the water cooler there will be lively


conversations about it but that is what he has decided to do. George


Osborne is saying to the public, if I did what some people tell me to


do, which is borrow more money, your interest rates will go up,


therefore you are forced into this conversation. We do not have the


figures all the mechanism for this credit easing and until we do we


cannot judge what difference it will make but in essence, he has


said to the country, I am not judging but don't assume that that


means I am doing nothing. That is fine until growth figures come in


that contradict that. If he gets another set of growth figures,


revised down, you will have more pressure on the Chancellor to


abandon his current plan and to do more. Pressure from the right and


the business community, pressure from some in the Liberal Democrats


and certainly the Labour Party to spend more, including on a


temporary tax cut, said in a sense this is not resolved anything today.


He has said, I stick to my plan, let's hope it works. If I am a


small business meant and I want to borrow �3 million for the


government to expand my business and the government says, we will


guarantee that. We you demand collateral? -- if I am a small


businessman. The over the coming months, we will work out the


precise route by which... So you don't know yet? We are


developing this as a proposal. have been involved in this for


months. We have made the announcement. We would take the


time to make sure we get it right. Come back when you have worked it


out. Let me finish with a pub quiz. Who said in January 2009 "printing


money is the last resort of desperate governments when all


other policies have failed"? think I know. George Osborne, the


Chancellor. It was indeed. You have won the quiz. So you are desperate


by this definition? I don't agree at all. I think George set out


Download Subtitles