24/09/2012 Today at Conference

Good evening and welcome to our first today at a conference of the

2012 party conference season. We are here in Brighton, with the

Liberal Democrats, not quite as many or as cheerful as usual as

they shelter from the miserable weather and a separate --

depressing poll ratings keep landing on the party like going

from a broken roof. Can Nick Clegg give them hope? Today, a plan for

business, backed with a billion pounds of public money and the

treasurer of the Lib Dems, Vince Cable, behind it. If the economy

recovers, maybe the Lib Dems can, too. And after Nick Clegg's much

mocked tuition fees apology, we will see if the rank are in a mood

to forgive and forget? # I'm sorry, I'm sorry, I'm so, so

sorry. A lot of Lib Dems hair at the Grand

Hotel will tell you they love a Vince Cable speech. It is almost as

if he is the Lib Dem they would like to be when they grow up. Old,

but not too old to be leader, not that he is after the job, you

understand, Wise, more left-wing than Nick Clegg, a bit like them,

and reassuringly comfortable in coalition for the sake of the

economy. And not above having a swipe at their Conservative

partners. We are so good at so many things in this country. But for far

too long, the mirage of growth based on property speculation and

financial gambling has hidden the harder for Jews of making things

So we have got to get behind successful British firms in

vehicles and aerospace, life science and creative industries.

Industrial strategy can only work if finance supports business

investment and growth and country, it doesn't. Hour leading banks are

often anti-business, especially anti small business. They through

traditional relationship banking over the side, and sold it useless

insurance and dodgy derivatives instead. A her we need a new

British business back with a clean balance sheet and an ability to

expand. I can announce to you today that we will have one. I am working

with the Chancellor to develop a new institution that will combine

�1 billion of new government capital with a larger private

sector contribution, and this will apply leverage through guarantees

to support up to �10 billion of finance to small and mid-sized

companies. This is a significant proportion of all the lending

currently available. We are scrapping unnecessary red tape on

small businesses, while strengthening regulation where it

is necessary. As for the Environment, we are getting more

women into top business positions on boards, and we have seen off the

head bangers who want our hire-and- fire culture, and seemed to find

the idea of sacking people as some kind of aphrodisiac. Actually, it

is totally ro and in the country with flexible labour markets which

have created over 1 million private sector jobs in the last two years.

Instead, we have concentrated on practical tribunal reform and

supported progressive firms who want working participation.

Furthermore, we want the cost of our current crisis to be fairly

shared. We are all in it together. It is a good slogan. Forget the

Tory messengers, let's just apply the message. And that means

cracking down hard not just on criminal tax evasion, but on

abusive tax avoidance. It means working with our allies to close

down tax havens, because nobody keeps their cash in tax havens for

the quality of investment advice. These are sunny places for shady

Now, I note that there are some of you who hanker after an assault on

top incomes. But we do know that very high marginal rates of income

tax are counter-productive. So if I were advising Mr Hollande, I would

be recommending a chateau tax. For those of us who never even managed

a dumbed down GCSE in French, that means a mansion tax. Core Lib Dem

policy says a first step to the proper taxation of wealth and land.

I know it revise the Tory backwoods men, but it is popular and right.

The super rich can't move their shattered to Monaco or Switzerland,

so let's get on with it and tax them here. But now, you might say,

well, that is fine, but how do we get out of the present mess? We are

in a dangerous phase of this crisis of go go as consumer spending is

squeezed by falling incomes and debt, and exports to the European

Union are being hit by the Eurozone crisis. Now, our critics on the

left say, a cut more slowly. But the Government has already extended

the period to eliminate the structural deficit from four to six

years. Yet Ed Balls says "workers of the world, unite. We need a plan

B". We should, he says, not cut the deficit in six years, but seven.

Wow! Of and then our critics on the White say that all we need is

supply-side reform to liberate the animal spirits of business. Well,

of course we need and we value our entrepreneurs. But no amount of

push from supply-side reform can possibly succeed without the pull

of demand. Other critics say, why not borrow more when interest rates

are solar? Actually, that is what we are doing. We are absorbing the

slowdown, restoring some of the savage cuts in capital spending

from the last year of Labour government. So boring has been

allowed to rise, and that is sensible -- borrowing has been

allowed to rise. I have considerable personal sympathy for

the Chancellor, who has been attacked for borrowing too much and

borrowing too little at the same time. Actually, and it is not a

matter of plan A versus plan B or plan C. When we came into

government, we had to balance the competing risks of the economic

downturn versus the risks of losing the confidence of lenders. I

believe we struck the right balance and adopted a deficit reduction

plan. I make no apology for my continuing support for that fiscal

discipline. But right now, we are fighting recession. And the need is

for a demand stimulus. But the central point is this. The country

must not get stuck in a downward escalator Breslow or no growth

means bigger deficits, leading to more cuts and even slower growth.

That is the way to economic disaster and political oblivion.

Now, most of our MPs will face Conservatives at the next general

election. They face the enticing prospect of a Tory split up. I

don't know what Boris and they've got up to at Eton -- I don't know

what Boris and they've got up to Eton. Perhaps a pillow fight got

out of control in the dormitory. I have been told, however, that jokes

about social class are not good for the unity of the coalition. But as

a mere pleb, I couldn't resist. Over two years in government, we

are battle-hardened, but certainly not war-weary. None of us know

exactly how it will all end. But we do know we must fight the next

general election her as a totally independent National, credible

I don't believe, actually, that the British people will want to entrust

their future to any one party next time. And if Britain wants

sustainable growth, competence with compassion, fairness with freedom

and more equality, not ever greater division, then that government must

have Liberal Democrats at its heart. Thank you. Vince Cable, speaking

earlier this afternoon. Straight after the speech, Andrew Neil spoke

to the Liberal Democrat deputy leader, Simon Hughes, on the Daily

Politics. The government is only put in �1 billion into this state

bank. We don't know where that money is coming from her. And it

will not even start for 18 months. It will do nothing for small

businesses in the recession at the moment, correct? You are correct

that it will be a �1 billion government down-payment, matched by

private finance. The idea is that it will produce about �10 billion.

In this Parliament, the problem that has bedevilled small and

medium-size businesses, getting money from the banks to help expand

and help through hard times, will be dealt with. It is the second

initiative, because we have already started the green investment bank

for green projects, and that is up and running. There you are going to

ask the taxpayer to guarantee funds that are going to go into small

businesses that have already been turned down by the commercial banks.

What collateral will we get in return for these loans? The bank

will work out a way of doing it at that satisfies them, from a

government perspective, that it is a viable proposition. But it will

be more risky by definition. How can we be sure you will not lose

our money? You can never be absolutely sure. When any bank

lends money, you can't be absolutely sure. The state needs to

take action to protect the taxpayer. But when we were left with banks

going under and the state had to rescue them, the plea was,

shouldn't the state have some influence on what they do, or

should we leave them to make their decisions? My experience is no

different from any other part of the country. Small businesses with

reasonable propositions which have a good record struggle to get

lending. Most people don't work for big businesses, they work on their

own or for small businesses. We need to make sure that sector

continues to grow. It has already created 900,000 jobs since the

recession began. In the public sector, jobs are going down. So we

have now got the Vince Cable Bang, but we will not have that for 18

months. We have got the green bank. How much has the green bank loaned

to people so far? I don't know. He the answer is nothing, because it

is only now up and running. Of how much has the Big Society bank

loaned to people? Go this is like a quiz programme, Andrew. There my

point is that you keep creating banks that don't do anything.

De Big Society bank was an initiative that David Cameron

wanted to make sure go there was something for volunteering and the

charitable sector. There we have only just passed the legislation

for the green bank. The idea is to make sure that places like the

north-east get the support for the renewable energy industries.

know what it is meant to do, Mr Hughes. We are committing to making

sure that there is public investment without penalising the

taxpayer in ways that grow the economy. Our best example of that

was the announcement made yesterday that there will be an ability for

people to use their pension pot to help their children and

grandchildren have the investment and security to get the housing

Mr Cable says he wants the Bank of Cable we may call it to concentrate

on lending people noun make things K I give you examples. British Lee

land, British ship builders, DeLorean, Phoenix, these were great

successes, weren't they? I remember those as you do. You also know the

great debate last year was why we didn't support our own companies to

get contracts for the railway industry when it was self-evident

that other countries within the European Union under the rules were

managing to do that. We are having a different and more robust

attitude on these matters within the European Union. You are not

allowed to unfairly state subsidise to distort competition but you are

allowed to assist if you apply the rules.

Simon Hughes talking to Andrew Neil earlier. Today, like every day I

suppose, was about how to grow the economy. During the morning session

the conference debated a motion about generating jobs and growth at

a time of austerity. Not all of them share Nick Clegg or Vince

Cable's support for bearing down so hard on the deficit. They want an

end to plan A which they see as hurting ordinary people. The UK

economy isn't a soulless auction room, a mechanism. It is a seething

mass of hopes and fears, where Government decisions shape the

behaviour of millions of workers and savers and consumers.

Government needs a dynamic, not a book-keeper's model of our economy.

Even Mervyn, the governor, is telling Mr Osbourne, don't be

obsessed with the simple aErith met tick. Mervyn is right. We need

intelligent policy-makers, not blind watch-makers. And there's so

much that a humane and intelligent Government can do. Our Government

has had no problem finding cash for irresponsible bankers. And it can

do more for those who need its help most. Alongside these investments

which have been announced there is always the caveat from our leaders

and from the rest of the coalition, but of course we are still making

deficit reduction our top priority. So the Government is giving out

what is seen as a very mixed message. On the one hand, more

investment. On the other hand, more cuts. And the private sector

continues to withhold its investment until it sees which hand

wins out. So we have to change the message. No longer can deficit

reduction by means of cuts in public spending be our top priority.

Instead, the priority has to be boosting the economy and reducing

our cuts or at least spreading them over a longer period.

I think the point of this debate is about saying what are we for as

Liberal Democrats? Well, I know what I am for as a Liberal Democrat.

I am for fairness. I am for social justice and I am for a war on

poverty. Danny Alexander doesn't want to us be timid. Colleagues,

neither do I. If you support amendment one, we begin to send a

significant signal that says Liberal Democrats are for people,

we are for fairness, we are for justice in this country and plan A

clearly is not working. We have the power, if we have the courage, to

stand up and argue for a better approach.

I come from a generation who saved before they spent and the country

has done the reverse. We cannot pretend we have no financial

problems. We cannot spend, spend, spend. Because we have not saved,

saved and saved. Conference, I am a dedicated

follower of John Maynard Kings, I believe in a demand-led recovery. I

want to see more investment in social housing and in ambitious

green projects and putting more money back in pockets of of low

paid people who will spend it. Scrapping the fiscal mandate will

be crackers. It's the credible deficit reduction strategy stands

between us and market chaos, interest rate hikes, that means

businesses going to the walls, house repossessions and mass

unemployment. I am in politics to work to avoid human misery.

Scrapping the fiscal mandate would create avoidable human misery.

Please oppose amendment one, support the motion in amendment two.

Thank you. Conference, this is such an important debate and it is an

argument about philosophy and the philosophy of our party. Let's

remember the starting point. The starting point is this: When we

came in to this coalition Government we were spending �4 for

every �3 that was brought in, in tax aches, that's simply --

taxation. That's simply an unsustainable position. If we

accept amendment one, then that is exactly where this party says that

we should remain. We voted together, overwhelmingly

in Birmingham two and a half years ago, for this coalition which was

built on this fiscal mandate and we voted for a five-year deal. It

would be wrong to give up now. Conference, I know that when the

going gets tough, Liberal Democrats are not ones to lose our nerve. We

need to stick to what we agreed. Conference, support the motion and

reject amendment one. The party leadership saw off that

challenge to the coalition's deficit reduction plan

Conservativably. Later this -- comfortably. Later that afternoon

the Chancellor's Lib Dem Lieutenant at the Treasury, Danny Alexander,

took questions and did his bit to make the Lib Dems feel better about

themselves and life in their coalition marriage of convenience

with the Conservatives. activists when we are talking to

people we as Lib Dems are now perceived to be the same as the

Tories and we desperately need to be able to show that we are

different and we need to be able to show that that we are moderating

the Tories and that we are making things less awful than they might

have been. We do need to be able to demonstrate that a vote for a Lib

Dem is not a vote for a Conservative. APPLAUSE. Well, that

is a point I 100% agree with. We are an independent party. We have

our own ideas, our own beliefs our own values, our own policies. I

think that it is - you are setting your ambition too low. I don't

think our aim should be to demonstrate the things are not as

batted as they might have been. -- as bad as they might have been. I

hope I have shown you ways in which the income tax people pay is less

because of the Liberal Democrats, that's making a real difference to

millions of people across the country. The support that young

people from disadvantaged backgrounds have in schools is

better because of the Liberal Democrats. I won't go on and repeat

the whole list. I reu this will I would go further in than you did in

your ambition for showing people the difference we are making in

Government. APPLAUSE.

I am sure day in, day out, you have conversations with Conservative

Ministerial colleagues and sometimes you agree wholeheartedly

with them and sometimes you don't. People might be interested to know

anybody you particularly find often that you are arguing with? Or any

particular good Conservatives from your point of view? I am not going

to do a sort of score card of my Conservative colleagues. I can see

why that would be interesting. But maybe I am old-fashioned in this

respect, it's not my way of doing things. I would say more there are

certain issues which are particularly challenging and

difficult. I have highlighted this week that I think the real risks

for our economy if we can't resolve in the right way the differences of

opinion that exist, particularly between back bench Conservatives

and Liberal Democrats, on the environment, for example,. That's a

major issue that we have to get sorted out because it's something

that can make a huge, huge difference to our economy right now

and this sort of sense that's political uncertainty around that

is very damaging. That's an issue, rather than a personality, if you

like. Isn't it not now time as we

approach the 2015 election for you and Nick Clegg, in particular, to

be saying more this fact that it is not full Liberal Democrats policy,

we want more, it's a pragmatic compromise? Of course it's not full

policy, we didn't win the election. I would love it if we had a

majority Government, we could deliver all the things that we

promised. We got 23% of the vote. The Conservatives didn't win the

election, either. Some of them thraoeubg forget that fact. -- like

to forget that fact. That's why we have a coalition which does involve

compromises t involves delivering a lot of what we promised. It

involves delivering a lot of what they promised, too. You know, going

back to what I said earlier, as a party we have - we are already

delivering a great deal of what we promised. We have a great deal to

gain from that process, not least in terms of demonstrating for the

first time for many decades that we are a party that can be trusted

with the country's money, a party that has credibility on the economy,

we are a party that has the right ideas in terms of fairness and

that'sy used the expression at the end of my presentation, we can

demonstrate other the the only economically credible and

progressive party in British politics. That's very good ground

to fight the next election on. Danny Alexander there. We heard

what what Liberal Democrats think of coalition. What do they make of

Nick Clegg's famous apology now for promising to try to hold down

tuition fees? Not for breaking the promise, for making it in the first

place. Adam Fleming took out his conference mood box for its first

outing to find out. All the talk here is about Nick

Clegg saying sorry over tuition fees. Are delegates here ready to

forgive him? Yes or no? Nick Clegg saying sorry over tuition fees, do

you forgive him? Yes. Why is he deserving of forgiveness?

Because he's basically said it from the heart. It's like an admission

of how he feels and that's how I feel about it. Let's look at the

last couple of years. We had no apology on Iraq. We have had no

apology on the mess that the last Government left us financially.

They were huge. Over the fees, I do forgive him but the fact they made

a promise and went against it I can't forgive him for that. That's

number one error of politician can make. Who else should be asking for

forgiveness? Well, the press should be asking for forgiveness of all

the students that put off actually going to university by

misrepresenting what the policy is. I still think he was right to

apologise but should have done it two years ago. Am I ready to

forgive him? On one hand, yes. On the other hand, no. Too little, too

Someone's come up to me and said a lot of people actually quit the

party over tuition fees so they're not even here to vote no.

I am sorry, I am sorry, I am so, so, sorry! It's very hard to say that I

am sorry! Wow, you saved me 79p, thank you very much. The answer is

yes. Do you think it's done damage? The apology? Breaking the pledge?

Definitely, no question. That's why the apology was needed and was

welcomed. I think all of us have learned things from this episode. I

said the other day it's - we are a party that prides itself on its

integrity. Nick said sorry about tuition fees, do you forgive him?

Yes! Can you think of anything you want to apologise for? I would echo

his apology on the pledge that we made, but sadly couldn't keep.

Thank you. I think actually Wye have forgiven

him if his apology had been accompanied by his letter of

resignation. What do you say to people who don't want to forgive

Nick? We are not in North Korea. We are a liberal party in one of the

most liberal-minded countries in the world. Not everyone is required

to agree with the leader on every issue. The people ready to forgive

and forget have come out on top. Have a look at what I have been

handed from the Lib Dem shop, a Nick Clegg "I am sorry" badge.

That's it for today. Here in Brighton as the Liberal Democrats

wash down Vince Cable's speech the bookies have cut the odds on the

Business Secretary becoming the next leader. Not that he is after

the job, you understand, and after all, there's no powerful appetite

here to to dump Nick Clegg. Not yet it's nice to be thought of, I

suppose. Some we will hear from Michael Moore and Danny Alexander.