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Willetts: We must be the Party of bold economic reform

Speech to Conservative Party Conference 2005

"Let me begin by saying thank you. Thank you for all the hard work you put in day in day out on behalf of the Conservative cause across the country. To give your time to a political party is true public service.

We can all take pride in knowing that we left Britain in 1997 in far better shape than we found it in 1979. In fact we transformed our country. We helped to create the Britain we see around us today. That is why our patriotism must not just be a love of our country as it was, but also as it is now. And we are in politics because of what we believe it can be in the future.

The challenge we are focusing on this afternoon is essential for achieving a better Britain: a dynamic, enterprising economy.

But under Labour our economy is encrusted with regulations, subsidies, and taxes, like a ship covered with barnacles. That is why we need a Conservative agenda, cutting regulation, cutting subsidies and cutting taxes. And more than that, we should be opening up new markets to British business at home and abroad. That is what the DTI must stand for.

But this Government doesn't really know what to do. So instead they review, they consult, they report. At the last count they had racked up an extraordinary 505 separate consultation exercises in the DTI alone. And if all else fails, they can always re-name the Department.

For a few days earlier this year it looked as if the DTI was going to be renamed, the Department of Productivity, Enterprise and Industry, or "DOPEY" for short.

In fact they called it something a lot worse than that. I won't repeat it, but let's just say that the whole episode was an almighty cock-up.

Then the Minister changed his mind. He said going back to the old name just involved using one screwdriver to take down three letters and screwing them back up. So you tell me. How much would it cost this Labour Government to change three letters with a screwdriver? Yes, you've got it - £29,500. So the taxpayer got screwed as well.

It was a silly diversion when Britain faces massive economic challenges.

Earlier this year the European Union faced just such a challenge. After ten years of negotiation, our markets were opened up to clothes from around the world. Chinese sweaters and jeans poured in. And what did the European Commission do? They panicked and suddenly imposed new limits on imports from China. Bra wars had begun. We ended up with 47million sweaters and 17 million pairs of jeans impounded in warehouses across Europe. And what on earth was Peter Mandelson to do with 7 million bras?

A Conservative Government would have no truck with such protectionism, especially when its victims are some of the poorest countries in the world. Europe, and indeed America as well, should be ashamed of their tariffs. We must fight to sweep them away.

Some people have their worries about this new global economy. They fear that we can lose our identity. But I don't see it like that. We won't thrive by offering the same as everyone else does. We will thrive by being different from everyone else.

Do you remember when British Airways removed the Union Jack from the tailfins of all their planes? They thought the only way to show they were really global was to remove what made them distinctive. But it was that very distinctiveness, that Britishness, which the world wanted. And we all remember the lady who dropped her handkerchief over a model plane decorated with obscure tribal art - Margaret Thatcher. She dropped her handkerchief and British Airways dropped their re-design. Rarely has a handkerchief been dropped to such effect.

There is a deep truth here, which we understand, but which Tony Blair and New Labour will never get. We value what is distinctive. Globalisation will reward what makes each nation distinctive. That's why globalisation holds no fears for us. But Labour want to make us the same as everyone else. That's what lies behind their constitutional vandalism, their obsessive regionalism, and their European federalism.

In fact in the global economy each country will specialise more and more. Who knows, perhaps by 2050 it will work like this:

• The world's factory - China

• The world's office - India

• The world's mines - Russia

• The world's policeman - America

And Europe?

- the world's care home.

Where does Britain fit in? I see Great Britain as the world's market place. I can see us as the world leader in so many of those services that make markets work - law, accountancy, advertising, insurance, finance. And there will be industry as well, where we have some real world beaters from racing cars to pharmaceuticals.

We could achieve so much. But we are held back by a Government that only thinks about today's headlines, not next year's growth. Business investment is at a record low. That is why so many people have that niggling fear that we are running on empty. We may have economic growth but it's thin growth. We are borrowing from future generations, rather than investing for them.

We must be the Party that tackles the massive economic challenges Britain faces. Some of you may remember that I used to be the Party's spokesman on pensions. We've got a pensions crisis, but Labour never put forward any long-term solutions to get us to save more. We are the Party who came up with the ideas to put things right.

Now I am responsible for our Party's energy policy. And what do I find? Exactly the same story. We face a growing crisis because we aren't building enough power stations. In fact if we have a cold winter there is a real threat of the lights going out in our offices and factories: and all because the Government doesn't reward investment in the future. With one exception: Ministers do have a strange obsession with wind farms - and that's the trouble with Labour's energy policy - it's all wind.

The next General Election could well take place in 2010 and we must put before the country our vision of Britain in the following decade, our 2020 vision. So here are three economic policies make Britain fit for the future.

First, we must make the case for civil nuclear power to tackle the energy crisis with least damage to the environment. Second, we should exempt small businesses from EU Directives.

Thirdly, we must press for complete free trade between Europe and North America - the Transatlantic Free Trade Area.

As the economy and society change we Conservatives should stand for keeping what is best in our country. But the reason so many of our fellow citizens are fed up with politics is that Governments are never there when you need them and they're always there when you don't.

Sometimes it feels like the world is turned upside down. Here is a press report of an open prison.

"Inmates at an open prison nicknamed HMP Butlins, regularly pop out for alcohol and smoked salmon from Tesco. An officer reported last year that when he went to Tesco after his shift he was astonished to see inmates loading a trolley with lager, Southern Comfort and smoked salmon."

Even so, they have a high rate of absconding from this prison. Why on earth are the prisoners absconding? Here's the answer and I quote,

"Some prisoners re-arrested after fleeing the gaol said they wanted to escape the culture of alcohol there." So nowadays you have to break out of a jail in order to sober up.

So we've got to set the world straight and that means getting our thinking straight.

I remember sitting next to the late, great, Sir Dennis Thatcher, and asking him what we should do now we were in Opposition. He said: "We must get back to basic Conservative principles" And then he added rather furtively, "but don't ask me what they are." He understood that Conservatism does not rest on a sacred text or a set of abstract ideas around which our Society has to be remade. But I believe there are two fundamental principles:

We believe in personal freedom, rooted in our historic liberties and protected by the common law and limited government. That underpins our commitment to a flexible market economy. That makes us the natural vehicle for people's aspirations for choice, enterprise, and opportunity.

But there is something else as well. We understand that personal freedoms can only exist within a strong society. There is also a deep human need for belonging and community. That's why families matter so much. This is the Conservatism that people feel at home with.

Conservatism has more experience of combining these two principles of freedom and community than any other political party. It is what has kept us at the heart of British politics. In the 19th century we tried to protect communities from a liberalism that seemed unaware of the limits to markets: Wilberforce, Shaftesbury and Disraeli committed the party to the elevation of the condition of the people. In the 20th century we fought for personal freedom and a market economy against state socialism. Today we face a different opponent again: a new Labour Party which claims for itself our twin principles, calling them economic efficiency and social justice. But they have no coherent account of where each principle has priority. Economic arrangements which should be flexible and mobile, Labour weighs down with social obligations: and social relations which should be instinctive and informal are turned into contracts.

The challenge for us is once more to communicate our beliefs in a way that wins the hearts and minds of the British people. And it shouldn't be difficult because they are not just abstract principles; they are the two great sources of a satisfied and fulfilling life. But let's be honest with ourselves. All of us, and especially people like myself in the Shadow Cabinet, have failed to do that in the past eight years.

I don't want hand-wringing or apologising. But we need to show that we've learned the lessons of successive election defeats. That means we must do three things: it means we must transform the way we conduct ourselves; it means a thorough review of our policies; and it means a complete overhaul of our organisation.

Let me read you this warning: "our party on the old lines will never have a future in the life of this country". Who do you think said that? No, it wasn't Francis Maude yesterday. It was Bonar Law, speaking to a conservative Party Conference after three successive election defeats.

What about this brutal description of a landslide defeat as the result of "a long pent-up and deep-seated revulsion against the principles, practices and membership of the Conservative Party". That was Quintin Hogg after we lost in 1945.

The only reason we have a Conservative Party today is because previous generations of Conservative modernisers had the honesty to recognise that a landslide defeat meant that the electorate was trying to tell us something, and they had the courage to do something about it. We must display the same honesty and the same courage today.

There must be no lazy repetition of empty words just because we think that's what Tories have to say. There must be no more clever evasions when there is overwhelming evidence of what we need to do. And, please, after this, there must be no more leadership contests for a long, long time. I have made my choice for David Davis as the right man to lead our Party. And shortly you will have to make yours. But whoever we choose the challenges will be the same.

And all of us have to rise to those challenges with energy, with enthusiasm and with unstinting loyalty to our new Leader.

We must once more be the Party of bold economic reform.

We must once more be the Party which knits together the different threads that make up modern Britain.

Only then will we be called once more to serve our great country.

Only then will we win, and win and win again."

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