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Leader's speech to the Spring Party Conference, Southport 1998

Paddy Ashdown (Liberal Democrat)

Location: Southport

In our debate yesterday, we fixed our strategy for this Parliament. And now we move to the next phase. Developing our policies and sharpening our messages for the elections ahead.

And an awful lot depends on getting this right. When others are trying to move onto our ground it is essential that we maintain our independence and our distinctiveness.

And if we win fair votes, that distinctiveness will matter more than ever before. The clarity of what we stand for will be crucial to the number of votes we win.

So our success in the years ahead will depend on our ability to think afresh - and to be radical and adventurous.

And the opportunity for that has never, ever been greater.

The Tory Party is still too shell shocked by defeat to think of the future. They are incapable of providing the lead that Britain needs as we make the transition from the old century to the new.

And Labour, who are ditching so much they used to believe in, have yet to find any new compass to set their course by as they wrestle with the storms of government.

This leaves a huge opportunity - no, a duty - for us Liberal Democrats.

Many, perhaps most, of the proposals on which we have fought elections for 50 years have now become the commonplace policies of our time. Constitutional reform; positive Europeanism; an independent central bank; the importance of education; the need for new thinking on the environment. These are now established in the lexicon of modern politics and many are in the legislative programme of this Government.

Even what is still called the Official Opposition is not immune from borrowing our phrases.

Mr Hague now tells us he is the constructive opposition and he has even taken to talking to himself about constitutional reform.

And, you know, Sir Norman Fowler has got so desperate that I thought I heard him on the Today Programme the other day trying to persuade us that the Tories are now the party of community politics!

Well if you believe that you’ll believe anything.

Somehow, Sir Norman Fowler has never quite struck me as one of life’s pavement pounders!

So, it’s time for us to get ahead again.

To do some new thinking.

To reclaim our historic role as the leaders of ideas in Britain.

Some tell me this is the age of politics without ideology.

They say the great “isms” are dead.

Communism? Dead!

Rampant free-market Thatcherism? The country tasted that in the 1980s. We know its price. And we have rejected it!

Socialism? Mention the word in the Labour Party and Peter Mandelson will confiscate your bleeper and have you locked up in the dungeons of Millbank Tower!

But there is one creed whose time, I am passionately convinced, has come again.

This is again the liberal age.

You will even hear Government Ministers using the word in polite company. Our wallpaper loving Lord Chancellor was heard to say not long ago: “We are all liberals now, you know.” Well, not quite Derry, not quite.

But seriously.

There is a reason why everyone is scrambling to get onto our ground.

It is because our ideas, liberal democrat ideas, are the ones that can make the best sense of the great questions that face us.

There are now two great challenges which confront conventional thinking. And between them they are, quite literally, tearing apart the old politics and the old structures of the nation state.

They are the globalisation of power on the one hand.

And the search for individual freedom and individual choice on the other.

The old creeds have nothing to say about this.

Conservatism has become little more than a celebration of the nation state. Their response to the rise of global power is to return to the sad refuge of 18th century sovereignty, mixed in with some ugly modern xenophobia.

And socialism is a creed of the masses. It is bewildered by the idea of personal choice. It feels threatened by the rise of individual power.

But for us liberals, internationalism is our meat and drink - and individual liberty, and power and choice and freedom - these are our very purpose. They are the values from which we draw even our name itself.

So, this is our ground. We own it. We have tilled this soil all down the long years of this century to produce the policies which now, I believe, underpin one of the great reforming decades of our history.

So it’s time to get ahead again.

To take our values, now more relevant than ever, and set the new agenda for progress as we cross the threshold into the next century.

There is a great project now before us.

It is, quite simply, to prepare Britain for the 21st century.

To forge a new settlement between the citizen and the state.

To create a welfare system that combines social justice with individual responsibility.

To renew our public services and restore people’s faith in them.

To transform our relationship with the natural environment.

To strip away our class system and build a more open, tolerant and liberal society.

And to build a new role for Britain, especially with our sister nations in Europe.

This is the agenda on which I want to lead you through the years of this Parliament and beyond.

Last month, in my Liberal Democrat News lecture, I mapped out one area where we might start this new thinking.

I suggested a new relationship between tax payers and tax spenders to rebuild trust in the way we fund our public services. With more consultation, openness, decentralisation, and earmarked taxes - like a penny on income tax for education.

That is one way we can move forward.

Now I want to use this speech to map out another.

I want to talk about unemployment.

You know, for too long too many politicians across the developed world have become fatalistic about unemployment. In public they’ve traded empty rhetoric about the need for jobs. In private they’ve reassured each other that long dole queues are inevitable.

“Not much we can do really ... factor of the global economy ... jolly bad luck on those who are unemployed, of course ... but we can’t go round promising people jobs you know!”

But the fact is that this does not have to be like this. It is not written in stone.

In the 1970s politicians thought inflation was unavoidable. They said it was necessary to oil the wheels of the economy - a kind of economic Act of God.

But they were wrong. When we had to, we tamed inflation. Because we found the will.

And it’s the same today with jobs. We can have low inflation and low unemployment. It’s not a see-saw. It’s not a zero sum game. It can be done.

If you’re puzzled why I’m raising this now, when unemployment is apparently falling, you shouldn’t be.

Nearly one and a half million people are on the dole in Britain today - even at the top of an economic boom. Twice as many as 20 years ago when we were at the same point in the economic cycle.

And that’s without counting the extra 300,000 we must add to the figures who would be considered unemployed in any other country. And the two million more who long for jobs if only they were available.

And even these figures don’t tell the whole story. Although the total number of unemployed has fallen in the last year, there are still 400,000 people who have been out of a job for more than a year - again, at the peak of the economic cycle. In some of the estates that I have visited over the last few months male unemployment stands at 60 per cent and well over a third of households have no-one working at all.

A society which says that work is the source of dignity and self respect, threatens itself if it then consigns such a high proportion of its citizens, and especially its young, to rot in unemployment.

I know. I remember. Because it’s happened to me. Twice.

Once when I first arrived in Yeovil in 1976. I was unemployed for six months. Then five years later, in the first Thatcher recession, when, as a manager, I had, on one terrible and unforgettable day, to shut down my division of the firm I worked for. And make all those I worked with, and myself, redundant.

It was the most soul-destroying experience of my life.

It is only when you don’t have a job that you realise what a job can give you. Direction, focus, motivation, companionship, self-esteem. The chance to travel, to meet people, to work with others as part of a team.

Unemployment excludes people. Not just from work, but from society. It takes away their stake. It robs them of their dignity.

But surely, the Government's welfare to work plans will solve all this?

I hope so. But I doubt it.

The Government's New Deal will do a lot to give young people experience and training for work. Good! But I fear that it is not going to do much to create long-term jobs. Indeed it may actually displace some real jobs, with purely temporary ones.

I do not underestimate the importance of work experience and training. Unlike most politicians, I was actually on one of these schemes, the Community Programme, when I was elected. And I remember how welcome it was.

But I also remember how terrible it was to come to the end of the year and face unemployment again.

So I welcome the Government's welfare to work programme. It is good - as far as it goes. It may even be a better programme of its sort than those that preceded it.

But it remains an unemployment initiative. Not an employment strategy.

It may help people to get into work, but I doubt it will create many new jobs for them to get into.

I want us, Liberal Democrats, to start thinking much more radically about unemployment. Not just how we can fit people out for the work that is there, but also how we can create more jobs.

I believe it can be done.

And in this speech I will sketch out for you how I think it should be done.

I want to outline an approach that builds on the real needs of the communities that make up Britain. That widens the scope of action for government, and especially local government, to meet those needs. That accepts how technology and globalisation have transformed work, but does not accept that this has to mean insecurity and hopelessness for many.

But first, we must be clear what a long-term strategy to tackle unemployment does not mean.

It does not mean a return to the past - to the rigidities of the regulated market, or the old nostrums of demand management.

On the contrary it means dealing with the labour market as it is, not as we might like it to be.

There is a revolution going on in every corner of the jobs market.

The make up of the workforce is changing. More women are now in work than ever before. The number of working men is in long-term decline.

The nature of work is changing too. It’s becoming more skill-based, and much more knowledge-based. Intellectual capital is the new wealth, not commodities or heavy engineering or large scale manual labour. There are now more telephone sales people than there are coal miners, steel workers and car makers put together.

And the way we work is changing out of all recognition too. Fewer than a third of people now work a standard ‘9 to 5’ week. The number of part-time workers has doubled since 1971.

These changes have brought insecurity to many. But they have brought more independence to many too - with self-employment, small business and ‘portfolio-based’ work all growing.

The old divide between employee and employer is breaking down.

And a new divide is appearing - between the ‘job rich’ and the ‘job poor’.

On the one hand, high wage, high pressure households. Dual incomes. Longer working hours in Britain than in any other EU country.

On the other, low wage or no wage households. No chance of a job with the wage or the hours to lift them out of poverty. And a benefits system that traps them there.

Now, what can we do to begin really to tackle unemployment in Britain?

Gordon Brown tells us that the Budget on Tuesday will be a Budget for Jobs. If it is, we shall welcome it. But we shall judge it against these key tests.

Does it raise skills? Does it promote flexibility? Does it reward work? Does it create stability? Does it encourage enterprise? Does it generate jobs in the community?

In the rest of this speech I shall sketch out for you a strategy for jobs based on these six key elements.

A strategy that combines flexibility with fulfilment, prosperity with participation, competition with community.

And which blends social cohesion with market efficiency.

First, simple, and, for us, very familiar - but vitally important: skills - and education.

One in eight of Britain’s young adults lacks basic literacy skills. Skills they’ll need for any job now.

And one in ten employers can’t fill a job vacancy because they can’t find people with the skills they need.

There can be no greater indictment of our failure to invest in education and training than that firms are held back because they can’t find the skills they need, while so many are left, unskilled, condemned to unemployment.

Just this week Steve Norris, a Minister in the last Tory Government, said this was something the Tories should be ashamed of. And he was absolutely right.

So what do Labour ministers do about it? Well, they talk. They hold reviews. They appoint watchdogs. They set up task forces - twelve, so far, on training and education alone - each with a Government appointee to head them.

Let me list just some of them.

There’s the Chairman of the Further Education Student Support Advisory Group. The Head of the Advisory Group for Continuing Education and Lifelong Learning. The Secretary of the Review of the Bureaucratic Burden on Teachers.

But you know, it’s not just in education. There are others too.

Chairman of the Strategic Review of the Welsh Trunk Road Programme. The Head of the Review of the Revenue Effect of the Reduced Rate of VAT for Energy Efficient Materials and Alternative Options for Targeted Relief to Help those on Low Incomes to Save Energy.

And finally, the most important job of all of the 161 reviews, task forces and quangos. Yes, you guessed it. The Chairman of the Review of Quangos!

Come to think of it I suppose that is a job creation scheme all of its own.

But the really important thing is, if you’re going to create jobs you have to start in the classroom.

So what’s happening in the classroom?

The fact is class sizes are at their highest for 20 years and rising.

Three times as much is now spent on tests for seven year olds as on books to boost their basic skills.

Fewer trainee teachers now than even 10 years ago - when Labour called it a crisis.

So, teachers - sacked.

School budgets - cut.

Employment and training budgets - even with Labour’s New Deal - cut.

Further and higher education - cut.

You know, it will not do to promise education, education, education - but then start with cuts, cuts and cuts.

Of course, much of this is the Tory legacy. And of course, money isn’t everything. But if we’re going to equip our children with the skills they need to succeed then we must make the investment that our schools, our colleges and our students need, and we must make it now.

As Lord Dearing said recently, if you think education is expensive, just try the alternative.

That’s why we have insisted, we are insisting, and we will continue to insist - this is the investment Britain has to make. It’s the investment Ministers are still refusing to make, despite all their promises. And if they don’t make that investment in the Budget on Tuesday, we will harry them every day of this Parliament until they do.

That’s why we say again this year that, since there is no other way to find that money than to put a penny extra on income tax for education, that’s exactly what we’d do.

So that’s point one of our strategy - investing in education and in skills.

And here’s point two. To create jobs, we need a stable economic environment which enables business to think long-term, and to plan, and to grow.

And that means a much more rule based approach to economic management, to stop politicians fiddling with the economy for short term political ends.

That stable economic environment means three things. Stable interest rates. Stable tax rates. Stable exchange rates.

To stabilise interest rates we now at last have an Independent Central Bank - proposed by us at the election, adopted by Labour three days after it.

To stabilise tax rates we must now adopt a Fiscal Responsibility Act which prevents pre-election tax bribes. And we should build on the sort of public service reforms being pioneered in New Zealand. Reforms which have made government departments more accountable to tax payers for what they do. And more focused on what they deliver.

And the route to stable exchange rates, and a more competitive pound, and lower interest rates, and higher investment, is staring the Government in the face, if only they would have the courage to take it.

Come off the fence on the Single Currency.

Set a target date for Britain’s entry into EMU. Show we’re serious about it by following the policies to make that happen. And hold a referendum on the principle of the Single Currency before the next election.

I despair at the Government's timidity on this. ‘Wait and see’ under the last government has been replaced by ‘waiting for Rupert Murdoch’ under this one.

This is costing Britain dear in an uncompetitive pound, higher interest rates, lost inward investment and diminished influence in Europe.

And I make this prediction. This Government will be forced by events to make its decision on the single currency before the next election.

So I say to the Prime Minister: don’t worry about Mr Murdoch. Put Britain first. The last Prime Minister was a prisoner on Europe. You should be leading on it.

Now, creating stability in our economy leads to the next strand of our strategy - encouraging enterprise.

Time and time again it has been in the small business and self-employment sector, that most new jobs are created.

In the fragmented labour market of the future, working for yourself will be the way that more and more people take control of their economic lives, earning a living for their family and making a contribution to the well being of their community and our country.

And that is a good thing. The idea of the self-reliant individual - empowered by their own abilities, beholden to no-one - is at the heart of Liberal Democrat belief. The freedom to make your own choices in life - enslaved neither by poverty, nor by ignorance, nor by pressure to conform, is a fundamental Liberal Democrat value.

So that’s why I want to see the Liberal Democrats become the party of small business, of self-employment and of enterprise over the years of this Parliament.

And it’s why promoting flexibility is a key element of our strategy for employment.

The economies that will prosper in the future will be those which are flexible and light on their feet.

Adaptable government, adaptable companies, adaptable workers. The biggest prizes will go to those who respond quickest to rapidly shifting demands.

I want our British economy to be one in which people are able to work in flexible ways which suit their life styles in every corner, crack and crevice of our economic system.

And that means a flexible labour market.

But - and here’s the point too many business people refuse to understand - flexibility is a two way street.

It’s not simply the power to hire and fire.

That does not produce a flexible workforce; it produces a frightened workforce - a workforce resistant to change and fearful of risk.

A truly flexible workforce is one equipped with the skills to move confidently around the marketplace, protected by a framework of basic rights against exploitation and unfair practice.

This is the importance of the Social Chapter and of safeguards against low pay.

But flexibility means a lot more. It also means making pensions safer and more portable, encouraging participation and profit sharing. And making sure part-time workers have the same pro rata rights as full-timers.

It means making it easier for people to work in different ways to meet the changing patterns of their lives - a flexible age of retirement, portfolio working, variable hours when they’re bringing up the kids.

It means making it easier for people to work from where they choose - making homeworking and teleworking real options for more people.

It means making it easier for people to take a break from work, and easier for them to come back too - so better use of career breaks, access to training to uprate skills in mid-career, and proper maternity and paternity leave.

And, of course, it means what we should have had long, long ago in Britain. And what we must see in Tuesday’s Budget. A decent, affordable, high quality, national network of childcare for all who need it.

What I’m talking about is a framework which gives us the choices, the freedoms and the security to make flexible work an opportunity not a threat.

And if we’re to achieve that we need a benefit system that rewards work rather than penalises it.

It is simply ludicrous that someone on the dole actually loses out when they take a job.

We’ve got to cut through the tangle of overlapping thresholds, tapers, rebates and credits that leave most people as lost as the Lord Chancellor buying wallpaper at his local B&Q.

Now that we are going to have a minimum wage there is, frankly, no reason why we should not give people a simple guarantee - that whatever benefits they are on, they will never be worse off in a job than out of a job.

And we could go further. Why not guarantee that whatever benefit people are on they can keep at least a quarter of the extra money they earn if they go back to work.

Now that would be real welfare to work.

And, if Gordon Brown chooses, he could make a start on Tuesday.

He could merge out-of-work benefits, like income support, with in-work benefits, like Family Credit.

He could raise the tax threshold, as Liberal Democrats are committed to do, to take a million people out of income tax altogether.

That is a far better way of helping the poor and encouraging work than the gimmick of a 10p tax rate.

So when the Government finally produces its proposals for welfare reform, we will judge them by these yardsticks. Do they tackle poverty? Do they encourage self-reliance? And do they reward work?

These then are five strands of our strategy for jobs.

Investing in skills. Creating stability. Encouraging enterprise. Promoting flexibility. Rewarding work.

And the sixth, is the most radical of all.

Stop, for a moment. Let’s come at this from an entirely different direction.

Consider these facts.

There are not far short of four million people who would like work.

But there is no shortage of work waiting to be done.

Look around you.

Homeless people on our streets - but derelict and empty buildings with no-one to do them up.

Elderly and disabled people desperately in need of care - but no-one to care for them.

Rural villages without shops, post offices, public transport - and people lost without them.

Pot holes, and broken street lamps - and no-one to repair them.

Railway stations, unacceptably frightening after dark - because there’s no-one to man them.

Parks, unkempt and uncared for.

Public spaces, dirty and dangerous.

Then pay a visit to your Benefits Office, and look at the queue of people who are unemployed. And remember that each costs us £10,000 a year in benefits and lost taxes. And that’s before you count the cost of the wasted lives and the economic contribution they could have been making.

This is simple madness.

Surely it cannot be beyond us to connect up the people who desperately need work with the work that desperately needs to be done?

I spoke earlier about changes in the job market.

But those changes are not uniform. Different parts of the economy are developing in quite different ways.

At one end there is the ‘competitive economy’. Trading goods and services in the global market, earning Britain’s prosperity. High wage, high tech, high risk, low security.

At the other end there is what I shall call the ‘community economy’. Wages generally lower. Work usually more secure, and sometimes more rewarding too.

Now note, this is not about the difference between the public and the private sectors. It is about two different kinds of economy - that need to be treated differently.

And the biggest difference between the two is the way they deal with labour.

In the competitive economy labour is a cost that has to be carefully controlled like any other.

But in the community economy, labour is an asset, both to the person who has it, and for the things it can do that bring benefits to us all.

You see, the community economy is a different kind of economy. Its success is measured, not in the creation of financial capital, but in the growth of social capital.

But it’s no less real - no less valuable for that.

This is the neighbourhood and family economy which brings up children, nurtures relatives and friends, looks after older people, watches out for neighbours, and does so through hundreds of thousands of small local organisations and millions of individuals who keep the wheels of our communities turning. Everything we do, everything we care about, every business success, depends upon this economy.

In the competitive economy, it is profitability which comes first - as it should. And Britain must be good at that. And, by and large, we are. This is where we earn our living in the world.

But in the community economy it’s people who come first. Now why can’t our communities be just as successful as our companies? Because they aren’t. In too many areas of Britain our communities are simply failing.

So, that question again. Is it really beyond our ability to connect the millions of tasks that need to be done in our communities, with the millions of people who are desperate to do them?

I believe it is not. If we can only start thinking more radically.

First we have to realise that everyone who is sidelined by the market - young people, older people, disabled people - these should not be viewed merely as a cost to the state, but as underused assets with time and energy and something to offer, which we badly need if we are going to revitalise the places where we all live.

Then we have to realise that those millions of things which need doing - the caring, the educating, the helping, the rebuilding - are work too, even though Labour’s New Deal might define them otherwise.

So here are some practical ideas. None of them just theoretical - all of them already successfully working somewhere else in the world.

Why not cajole our financial institutions, and big business too, into investing in those run down neighbourhoods so many of them fail to help? That’s what they’ve done in the United States, with the Community Reinvestment Act. Couldn’t we do it here?

Why not do what they are already doing in Sweden, the Netherlands, Australia, South Africa and thirty American cities? Set up ‘Business Improvement Districts’ in which businesses vote to pay for agreed regeneration projects which they subcontract to their local council to run, improving communities and creating jobs at the same time.

Why not encourage - not discourage - ideas like skill exchanges, ‘Time Dollars’ and local trading schemes - LETS - which help people without money use those assets they do have - goods, services and time - to rebuild their communities?

Why not actively encourage credit unions to give people access to funds and credit - drive out the loan sharks who prey on deprived areas? That’s what President Clinton is doing in the United States.

All these practical ideas foster self-reliance, and support people trying to escape from poverty. And in my journeys outside Westminster these last three months I have seen how initiatives like these - and the people who make them work - are making a real difference to people’s lives.

I want the Liberal Democrats to become the champions of this ignored third sector, which is already doing so much but which could do much, much more.

And, incidentally, I do not believe that these jobs should always, or even mainly, be done by Government - whether local or national. Far from it.

I see Government in the new century, doing less and commissioning more. Setting the contracts, assuring the quality, overseeing the delivery. Government which steers more - and rows less.

Indeed, I don’t object at all, even to delivering core public services in this way. If we followed an entitlements approach to public services, then the job of Government would be to frame the entitlement, to fund it, to ensure equality of access for all and to assure the quality of delivery - not necessarily to deliver itself.

For instance, should we really be concerned about who provides a school? So long as Government ensures that it is accessible to all and delivers education which is regularly monitored and whose standards are scrupulously maintained.

This is a new approach. One in which the scope of government, especially local government, is far greater, but the range of the things they do themselves is far smaller. One which combines social action with market efficiency. One which puts the interests of the consumer before those of the producer. And which, in doing so, can increase our social capital and create jobs at the same time.

And we could start right now.

Here’s a challenge to the Government.

Why not turn your New Deal into something much more?

Make it a ‘New Deal Plus’. Set up projects, initially in areas of the highest unemployment, which allow local councils, and other bodies like health trusts and voluntary groups to offer new services they’d like to provide beyond their current budgets. Contractors could tender to provide these services on condition they give the jobs to one of the New Deal target groups - the young or the long-term unemployed. And the service they deliver would be closely monitored by the body that commissioned them.

It won’t necessarily be the cheapest option. But it could be the best value one - the most effective one. And it will create real jobs - without displacing existing ones, because these will be new jobs - outside existing budgets.

This speech has been about unemployment.

But it’s been about much more than that as well.

It has been about an end to navel gazing about strategy - and moving on to a period of new thinking and intellectual adventure.

It has been about reclaiming our position as the leaders of ideas in Britain.

And it has put in place some of the signposts that I hope we shall follow in that new thinking.

A more rule-based approach to economic policy.

A commitment to self-employment, small business and enterprise.

An approach to welfare reform which rewards work and which combines social justice with self-reliance.

A clear stance to provide leadership on the Single Currency.

An enduring determination to invest in education and training as the corner stone of a tolerant, liberal and prosperous society.

An employment market which promotes job flexibility by giving people greater personal skills and security.

A new approach to government, especially local government which combines wider scope for action with the efficiency of market mechanisms.

And a radically different approach to creating jobs, so that we can begin to connect the people who need the work, with the work that needs to be done.

We have come a long, long way together, these last 10 years.

Now we enter the most exciting phase of all.

The phase which will determine Britain’s politics in the next century.

And our place as the gathering point for a new liberal and progressive majority which can form the dominant governing force to carry Britain into the next century.

We must seize the chance now to give our country, at last, the politics it deserves.

More hopeful. Less cynical.

More ambitious. Less negative.

More imaginative. Less traditional.

More based on partnership. Less on confrontation.

There is nothing we cannot achieve. Everything is possible.

We must seize the chance now. To change. To experiment. To work together, instead of against each other. Everything is possible.

We must seize the chance now. To achieve all we Liberal Democrats have dreamt of for so long.

Strong, independent, clear in what we stand for, courageous in what we do.

Everything is possible.

I give you a motto for the years ahead. It is taken from the words of Theodore Roosevelt, but after 10 years of success, we are entitled to call it ours.

“The greatest deeds are yet to be done and the greatest victories are yet to be won.”

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