What we inherited from Labour, let’s face it, was a sinking ship. Masts down, rudder gone, water flooding the bilges. You elected us to get it afloat again, and that’s what we’re doing.
First, we’re plugging the leaks. This time last year, when our coalition was just five months into government, I told you how we were freezing spending on consultants, government advertising, and new IT projects.
Since then, we’ve cut civil service headcount, making it smaller than at any time since the war.
We’ve vacated over seventy Wembley Stadiums worth of office space. IT spending was down by £450m; spending on consultants down by £870m. We’ve saved £800m by renegotiating contracts with major suppliers. Car hire costs – down by 15%. Hotel room rates – by 10%.
We’ve started to cut the quangos. So too a long list of expensive vanity websites; and advertising spend was cut by 70%. All of this just in our first ten months. Just up till March, we stripped £3.75 billion out of annual central government spending. Enough to pay the salaries of 150,000 teachers, or 200,000 junior nurses.
That was just the start. There’s plenty more to come. In the summer we published a report on fraud and error in the public sector. It adds up to a staggering £21 billion a year. Another legacy of Labour complacency and irresponsibility; of a culture of pay now, check later. Under Labour managers saw their job as simply shovelling money out of the door. We’re changing that, and changing it fast.
We’re piloting programmes to get that dreadful £21 billion figure down. I can tell you that just in the first few months alone the pilots have already saved millions. As we roll them out those millions saved will turn into billions saved. More of Labours’ waste and irresponsibility clawed back for the taxpayer.
And you know, none of this is rocket science. It’s hard work, unglamorous work; it’s doggedly applying businesslike methods to the huge business of government. That’s what this government’s about: spending hard-earned taxpayers’ money carefully and making sure every penny counts. Labour ministers simply didn’t bother. When he had my job, Ed Miliband didn’t bother. That’s why we have so much to put right.
Growth
To get the economic ship underway we have to do more than just plug leaks. We also have to hoist the sails. We know that it isn’t government and public spending that powers the economy. It’s enterprise – thousands of firms, big and small, up and down the country. Innovating, creating wealth, giving people training and jobs, paying taxes. The single most useful thing we can do is to keep interest rates low. And because the government’s plan to reduce the deficit is tough and convincing, we have interest rates nearly as low as Germany’s.
Of course there’s more we can do. For far too long, small British firms have found themselves squeezed out from doing business with the government. One would-be supplier showed me a stack of all the paper he had to read just to be able to bid for one contract. It was as high as his desk. So we’re getting rid of the pointless bumf and form-filling; binning the absurd hurdles suppliers have had to jump just to get into the game.
We’re doing this because smaller firms host some of the best brains, and come up with some of the most innovative, cost-effective products and services. So we need to make it easier for them to supply government. That’s good for British businesses and for our economy. And it’s good for the taxpayer as well.
We’re opening up public sector data too. Our government is now the world leader in transparency. This lets the public hold us to account. Not always comfortable but always salutary. But it can also stimulate economic growth by feeding a fast-growing cutting edge industry that’s been forecast to contribute billions to Britain's enterprise economy.
Twenty years ago, before my enforced sabbatical from government, as a young Treasury Minister taking a Finance Bill through Parliament, I remember a Labour MP saying indignantly: “You’re just trying to turn Britain into a tax haven”. “Thank you,” I replied. “I take that as a huge compliment”. Because, when the public finances permit it, Conservatives will always want a low tax Britain. A Britain with sensible regulation, where people want to put to work their ideas, their energy, their investment; to create wealth and jobs and prosperity for the future. A vigorous, dynamic enterprise Britain.
Public sector pensions and facilities time
And another thing. With my LibDem colleague Danny Alexander, I’ve been leading the discussions on reforming public sector pensions. Now, we value our public servants. They educate our children, nurse the sick, help look after elderly and disabled people, keep our streets clean and safe. The public service ethos is part of the glue that holds together our society. That’s why we want public sector pensions to remain among the very best available, with guaranteed pensions, index-linked and inflation-proofed. But today public sector pensions urgently need reform. People are living longer – ten years longer than in the nineteen seventies. So we need to ask people to draw their pensions a bit later, for a better balance between life spent in work and life spent in retirement. And we must ask them to pay more towards those pensions, for a better balance between what staff pay towards their pensions, and what other taxpayers pay; other taxpayers who for the most part have no prospect of enjoying pensions as good as these.
We’re discussing these reforms with the trade unions, and we hope we can reach agreement. There’s much to discuss, to ensure we get this right. But let there be no doubt. These reforms are essential. And we are utterly determined to see them through, because it’s the right thing for Britain’s long term future.
Trade unions are an important part of a free society, of Britain's Big Society. But as Eric said earlier, the support they get from the taxpayer has got way out of hand. Just in the Civil Service alone this so-called facility time is costing no less than £30 million a year. Can you believe that there are around 150 civil servants who are actually full time trade union officials, all on the public payroll? We can’t go on like this. That’s why I’m announcing today that we’re consulting on limiting the time civil servants can spend on trade union work, and on ending the employment of full time union officials at the taxpayer's expense.
Conclusion
So there’s lots still to do. It is the historic destiny of the Conservative Party to repair the damage inflicted by Labour. It needs strong leadership, hard work, determination and resolve. And the prize at the end is a Britain rebalanced, reinvigorated, an enterprise Britain again leading the world.