03/10/2011 Today at Conference

Good evening. Welcome to our first conference round one the

Conservatives here in Manchester. Top of the bill today, George

Osborne, who made it clear he was a Chancellor not for turning. The

budget deficit would be reduced as planned, there would be no fiscal

stimulus. The biggest boost the British economy could get he said

if the eurozone put its house in order. He claimed his unbending

fiscal stance did leave room for a loser monetary policy, in ways that

would allow business to borrow more. Here are the high lights of his

speech. 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 the

speculation, decide what they are going to do with Greece and then

stick to that decision. APPLAUSE. 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 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's already

pouring with rain. 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 cuts in tax." So you would have to put

taxes up even more later. 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 problem, not the

solution. APPLAUSE.. We can unblock our banking system, we will help

businesses create new jobs. Here is how. First, we will help the Bank

of England keep interest rates at record lows while the economy is

weak. In a debt crisis it is the most powerful stimulus that exists.

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. Very few countries can say that today.

The fact that Britain can is thanks to the resolve of this party, and

we are generous enough to say this, it is thanks to the resolve of the

Liberal Democrats too, working as a coalition, together in the national

interest. APPLAUSE. So this is the second part of our plan. We have

got to get credit flowing in our economy. Of course, the Bank of

England have their own independent judgment to make on quantitative

easing. I have said many times before, I will follow the

procedures of my predecessor, and give Treasury approval if they ask.

But there is more, the Government itself can do to get credit flowing

and encourage investment. It is known as credit easing. 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 and

enterprise. APPLAUSE There are business practises, that are

irresponsible We will deal with them with a regulatory system that

works. But Labour's later policy, that there should be two newly

created rates of tax is frankly ridiculous. One for producer, one

for predators. One for companies a Labour Chancellor like, one for

companies a Labour Chancellor doesn't like. Imagine a Labour

Chancellor sitting there 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 a

completely unworkable idea. I think it is the moment, think it's the

moment when this opposition Labour ceased to be either a producer or a

Predator. APPLAUSE. Tomorrow's World is being shaped. It is being

shaped here in Manchester. Manchester. The first city of the

Industrial Revolution. The city where the first computer was built.

Where Rutherford split the a Tom and the mill brand brothers split

the Labour Party. -- a ment to -- atom. 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 called graphene, it is the strongest best conducting

material known to science, to be used in everything from aircraft

wings to microchips. We have already protected the science

budget, and today, I am confirming 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. We have got to get Britain making things again. I have never

believed that Government should just stand on the sidelines, it has

no role to play in fostering enterprise and creating jobs. I

will intervene with the market doesn't work bg and set it free

where it does. And that is not it. We are today extending the mobile

phone coverage for up to six million people, the new right the

buy and housing plans David Cameron announced yesterday will build

200,000 new houses, create 400,000 new jobs, and we are reforming

public sector pensions so they are generous to public servants and

also fair to taxpayers. APPLAUSE. 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,

it will cost job it is totally irresponsible. APPLAUSE. 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 claim. 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, the hit Gants only get back if they --

that litigants only get back if they win. We rending the one way

bet against small businesses. Two years ago, I stood here and said we

would cut the cost of central bureaucracy by a third. Some were

sceptical of politicians who said they could cut waste. We are doing

it and we are ahead of plans. Soy can tell you, the 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. I don't pretend to you, that these

are not difficult days, and that there are no difficult days ahead,

but together we will ride out the storm, and together, we will move

into the calmer, brighter seas beyond. Thank you. APPLAUSE. George

Osborne. The Chancellor's speech was greeted with a short luke warm

standing ovation. It is not that the party faithful here don't like

him or what he had to say, they do. But they know that the future of

their Government depends on him getting it right. And that makes

them apprehensive. Chancellor didn't give many details about the

most policy announcement, the easing up of credit for smaller

businesses. So I asked Treasury minister Justine Greening what it

entailed. It means channelling more money through to small and medium

size companies who at the moment are finding far harder than big

companies for example to access capital to invest in their

businesses. I understand the problem, what is the policy

mechanism by which you will do that? Nick explained... I want you

to explain. He has just like me a journalist you the minister, what

will you do? There are a number of different ways we can make sure

that gets through to companies. We can issue bonds, for example, we

can purchase private sector assets spwhr. 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 as we see here, who

are able to sell bonds into the market and have them trade in a

secondary market, that doesn't happen so much in the UK, so what

we want do is go beyond simply the quantitative easing if you like

that, the Bank of England is doing but to have some of that perhapss

more targeted, so we are look a different ways. I know that. Give

me a policy that follows the principle? Well, we will be setting

those out over the coming months. But you must have some options.

they can... What I am trying to do. We can actively, actively put bonds

out there ourselves. But the Government would put bonds out?

Underwrite other debts that companies... There is a different

way we can do this. So this is very interesting, so the Government

would issue bonds, the Government issues a lot of bonds at the moment,

they are painly being bought by the Bank of England if you go back to

printing money but the Government would issue bonds more bonds so it

would add to Government borrowing. No. It wouldn't? The assets you

would be purchasing are liquid ones so it wouldn't be part... You are

still borrowing to produce money. No What would you do with the

money? We already, Government is issuing guilts as part and parcel.

I knee minister, what would do you with the bonds the help small

businesss?. At the moment if you an SME you will probably so go do a

High Street bank to borrow. We are saying working at a Government

alongside the Bank of England, we will create new channels by which

small and medium companies can go more to the market and perhaps in

part from Government too to be able to accessory quidty. In what way

would you act to help small businesses get money? Well, as I

have been saying, it can take the form of under writing. Providing

guarantees in a way we don't do at the moment. So there would be, if I

was a small business and I wanted to borrow money from the bank or

where ever. You would guarantee that debt? That is one of the

options that we have got to be able to deliver this mechanism. Another

one... Would you, would that be uncovered debt or would you ask for

something to cover the state guarantee? Would I have to put

something up? You are getting an asset in return in relation to what

it is secured on, but the bottom line it is liquid so it wouldn't be

part of our debt. The other thing I would say, is the other part is

about creating a longer term secondary market. If you are a big

company in the UK you can already issue bonds. You have said that

minister. The point I am making is important. The big companies don't

have to issue bonds because they are sitting on a massive cash pile.

As the Chancellor said that is not tissue and we have had the director

general of the CBI in the studio admitting that companies are awash

with money they are not investing. What I am trying to get to, and I

will let you answer and stop interrupting you, is how credit

easing in your mind will help small businesses and what you intend to

do. It will mean they don't just have to rely on high street banks

to provide them with cash. What will you do? We are developing

different way, one is under-- underwriting. What is going out

with the Bank of England to see that quantitative easing going to

businesses, more directly than it does at the moment, those plans are

worked up over the,coming week, George will make more of a

statement at the November autumn statement. But it is good news for

the businesses, at the moment if you a big company, you can go out

to the mark, you can trade your debt in a secondary market. That is

just not possible for small and Justine Greening. The Treasury

later briefed that the scheme would involve smaller companies creating

bonds which the Government would then buy, creating a new stream of

revenue at a time when the banks aren't lending. But since small

companies in this doesn't doesn't don't issue bonds the Treasury

warned it would be months before such a scream could be implemented.

-- scheme. Iain Duncan Smith is a conference darling these days,

which is more than can be said when he was leader of this party. And

there was nothing quiet man about his attacks on Labour's welfare

record. Here are highlights from his speech.

At a time when the British public are having to tighten their belts

because of our 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 for 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 saw the best and the worst of Britain. At night, a violent

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

helping with each other in their communities, and leading the

fightback. We should recognise there is a depressing and a

familiar context to what we saw. That is the steady rise of an

underclass in Britain. A group too often characterised by chaos and

dysfunctionality and governed by a perverse set of values. The last

Government left us with a welfare system which treated symptoms, not

causes. And to each person in a sense it said, you're financially

better off out of work, you're 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? This brings me really to one of the

most important issues facing our country, the role of the family.

Now this isn't about Government interfering or finger-wagging in

family life, it's about Government recognising that stable families,

stable two-parent families, are vital for the creation of a strong

society. And that is why I intend our welfare reforms that I have

already laid out, that these welfare reforms make an impact on

the couple penalty where it matters most, amongst families on the

lowest incomes. And further more, 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. APPLAUSE.

But the riots really, when we reflect back, the riots were a

wake-up call. On street gangs, as well. What all this showed us is

that a strategy of containment is not an option any more. And that is

why I speak of the urgency of change and ask us all here to

fulfil our historic role. To put our heads and our hearts in tandem,

and become social reformers once again. The riots provided a moment

of deep clarity for us all, an opportunity, a reminder that a

strong economy also requires a strong social settlement, with

stable families ready to play a productive role in their

communities. Our task is to achieve this rebalancing of society,

restoring our economy must go hand in hand with restoring society.

Iain Duncan Smith. David Cameron began the week apologising to two

female MPs for something he had said to them in the House of

Commons. I asked the welfare Minister Chris Grayling if it

wouldn't be more appropriate for the Prime Minister to apologise to

women for having the highest rate of female unemployment since 1996.

What women would want us to do is set out ways to tackle that problem.

18 months ago we inherited some of the most difficult economic

circumstances and financial circumstances any Government has

ever taken over. What we have also had since then is the emergence of

a eurozone financial crisis on a scale nobody had really anticipated,

I think. There are huge economic storm clouds around and we are not

immune to that. Why apologise to a -- for a passing remark and in the

apologise to the women of Britain who have the highest unemployment

since there was last a Tory Government? What I would be saying

and I think he would be saying to the women of Britain is we are

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

become the highest level under you. It wasn't the highest level in

April of 2010. Unemployment in overall terms is today a little

lower than it was six months ago and what we have seen in the labour

market the last few months is ups and downs. The last quarterly

figures a big step in the wrong direction. The previous two

quarters were steps in the right direction. What we have had over

the past 12 months in overall terms unemployment flatlining. We have

had an increase in the number of jobs. So we have had a mixed

picture. My concern is to make sure we pursue policy that is will keep

unemployment on a downward curve even in difficult times

economically. If he wants to apologise to women, if your

Government wants to do that, would it not make more sense it apologise

to women for scrapping child benefit among those in the 40% tax

bracket? What we would say to anyone affected by the changes,

it's not just women in the tax bracket who might lose child

benefit in a couple of years, all of us would rather not have come

into Government to have to take tough decisions like these. All of

us regret having to take decisions of this kind. But we are not the

one who is created the biggest financial deficit in our peace-time

history. We are dealing with the mess that was created under the

previous Government and doing so in some of the most difficult economic

circumstances in living memory. understand that. But if you are in

the mood to apologise for women, shouldn't you apologise for the tax

credit cuts and the higher child care costs which mean it's less

economic for women to find jobs? What we have actually done with tax

credits is whilst we have taken away tax credits from those on 40

or 50,000 a year, we increased tax credit support for people at the

bottom end of the scale. We know that there are tough decisions to

take. We know they're going to affect women and men alike, but we

are trying to make sure we do what we can to protect the poorest and

most vulnerable in our society. Either through targeted financial

support, or through some of the measures we discussed this morning

to help people break out of a cycle of poverty. Do you think it would

be worth apologising to women for having more men from a single

Oxford college than women in the cabinet, is that something to

apologise for? When we have such a good inhad flow of new -- intphroed

of new women -- a inflow of women MPs. You have fewer women in the

cabinet than one from one Oxford college? It's very much a regret.

Isn't that something to apologise for? We have not got more women in

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

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

Conservative MPs we have ever had. Many of them making a good impact

in parliament and will go on to Ministerial ranks. We recognise we

have a problem but one of the things David Cameron did was start

to sort that out. Chris Grayling. Now, as night follows day, there's

one thing you can be sure about at a Tory Party conference, that here

in the bars and on the fringes they'll be talking about Europe. It

really wouldn't be a Conservative conference if they didn't. We sent

out our Adam Fleming with his mood box to get the gossip.

We have a new conference which means a new set of balls, blue, of

course, and we have a true blue question for del tkpwats on the

issue of Europe -- delegates. In or out? It's very simple. Out. Why is

that? We would save �48 million a day and the country would be a

better place. Let's stay in Europe, for now. OK. I tend to agree it

should be economical, not political. So, I would go in for now.

should be in, but there should be a repatriation of powers like William

Hague has suggested. Europe, in or out? Not a hesitation, why is that?

I felt that we were better off with the Commonwealth and looking after

our own interests and we should go back to doing that and working with

the rest of the world, rather than Europe, which is dragging us down

and taking our resources from where we want to spend them.

Norwegians just had one word for it, nay. You must be relieved that the

inbox has a lot of balls in it? I have seen more carefully

controlled assess ments of public opinion, that's in our national

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

economic integration but I don't Why is that? My father was Swiss,

so he was European, all right not in the European Union, but 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. We want a referendum, we

would vote out. There we go. Dr Fox, would you like to vote in our poll

for the Daily Politics? Grab a ball, pop is in the slot. It's about

Europe, one of your pet topics. I must admit his bodyguards looked

scary, I didn't want to push him too much. Would you like to vote in

our special machine? What is that about? Europe, in or out? He just

laughed! They're like hot cakes. Europe, in

or out? Put your ball where your Who put their ball in the middle?

APPLAUSE. You are the only in, in a gang of outies, what is that like?

I thought were talking about belly buttons. That Republics --

represents your party. They're early days in conference, I am sure

people who make the decisions the Prime Minister has set out our

decision clearly on our relationship with with Europe, has

it right. There are no balls left. Let's see which argument has won.

The majority of people want Britain to leave. They voted for out, it's

interesting because the leadership of the party would much prefer they

put their balls in the inbox. That's it for now from Manchester.

On the day George Osborne staked all on his current economic

strategy coming right without further stimulus and coming right

in plenty of time for the next election. It is general hepbgs

aprethat he can -- apprehension that he can meet that deadline that

perhaps explains why this has been, so far, a somewhat muted conference.

Tomorrow's conference highlights include the Home Secretary, Theresa

May, the just Secretary, Ken Clarke, -- Justice Secretary, Ken Clarke

and the mayor of bond, Boris Johnson -- Mayor of London, Boris