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David Cameron: The age of austerity

"It’s good to be here in Cheltenham, and to see this great Party so united, determined and optimistic.

Look what we’ve achieved since our Spring Forum in Gateshead last year.

We’ve now got more councillors than Labour and the Liberal Democrats – combined.

We’ve won our first by-election from Labour in thirty years.

And we’ve got the first Conservative Mayor of London.

All this - because of you and your round-the-clock hard work.

Because every strand of this Party – the volunteers, the councillors, professionals and parliamentarians came together to work side by side in common cause.

It doesn’t get said enough: thank you.

PARTY CHANGE

But we haven’t just been winning elections together.

We’ve been changing our Party together too.

Candidates who represent Britain as it is today.

Social action projects in our local communities.

And new issues to campaign about.

Yes we’re the party of strong borders, law and order and low taxes – and we always will be.

But today we’re also the party of the NHS, the environment and of social justice too.

Ours has been a voyage of connection.

Not just with the modern world and the challenges of the hour.

But with the rich heritage of our own political tradition – that strand of Conservatism that celebrates the local, the civic and the social.

We have strengthened our liberalism and rediscovered our Conservatism building a movement that isn’t just about the individual, but about the community not just about the ‘me’, but the ‘we’ not just about the market, but about society too.

That’s what we’ve achieved, and we can be hugely proud of it.

AGE OF AUSTERITY

But it has all been in preparation for what lies ahead.

The election could be just a year or so away.

This will not be any old election.

Its outcome will shape Britain for a very long time.

And it is an election we must win.

There are deep, dark clouds over our economy, our society, and our whole political system.

Steering our country through this storm; reaching the sunshine on the far side cannot mean sticking to the same, wrong course.

We need a complete change of direction.

I’m not just talking about changing one group of Ministers for another.

Or one set of policies, plans and proposals for another.

I’m talking about a whole new, never-been-done-before approach to the way this country is run.

Why?

Because the world has completely changed.

In this new world comes the reckoning for Labour’s economic incompetence.

The age of irresponsibility is giving way to the age of austerity.

Labour’s Debt Crisis.

The highest borrowing in peacetime history.

The deepest recession since the war.

Labour are spent.

The money has run out.

Now some people say: let’s get through the recession, let’s get through the election we can keep on spending more, keep on borrowing more, and deal with the debt crisis later.

Wrong - seriously wrong.

The alternative to dealing with the debt crisis now is mounting debt, higher interest rates and a weaker economy.

Unless we deal with this debt crisis, we risk becoming once again the sick man of Europe.

Our recovery will be held back, and our children will be weighed down, by a millstone of debt.

So this is no time for business as usual.

This is no time for more of the same.

There is only one way out of this mess, and that is through massive change.

I’m frustrated it’s not happening.

I’m impatient to get on with it.

And today I want to explain what the change needs to be.

RESPONSIBLE POLITICS

First, the age of austerity demands responsible politics.

Over the next few years, we will have to take some incredibly tough decisions on taxation, spending, borrowing – things that really affect people’s lives.

Getting through those difficult decisions will mean sticking together as a country – government and people.

That relationship, just as any other, is strengthened by honesty; undermined by dishonesty.

Gordon Brown doesn’t understand how important this is.

Despite the gravity of this debt crisis despite the serious consequences of not dealing with it he still can’t stop his politics of spin; smoke and mirrors; treating people as fools.

Remember, two years ago it was the election that never was.

He told us he bottled it because he thought he was going to win.

This time last year it was the 10p tax con.

He taxed the poor for the sake of a headline, claimed that no-one lost out, and then spent billions of pounds compensating them.

Last week it was the U-turn on YouTube.

After telling us to wait for the independent enquiry on MPs’ expenses, he suddenly popped up to announce his own plan.

And what was that great new plan?

Paying MPs to turn up for their job.

No receipts.

No questions asked.

More taxpayers’ money.

Less accountability.

But the most cynical trick yet came in last week’s Budget.

Everyone could see through what they were trying to do:

“Don’t look at this vast hole in the public finances over there look at this pathetic piece of class war posturing over here.”

When I see Brown and Darling, I’m reminded of those people who come to your door; one pretends to read your gas meter, while the other robs your house.

50p income tax when you have a budget deficit of £175 billion?

That’s not responsibility - it’s distraction burglary.

There’s no responsibility left in Labour.

They’re already set to have the highest borrowing in the G20.

And yet, unbelievably, this Government is planning to spend and borrow even more.

They’ve just announced a spending increase - not a cut, but an increase - of £20 billion for next year.

They’ve delayed the cuts until after the election.

Now I wonder why that could be?

Last week, Labour had their chance to set out their alternative, to show how they would lead us out of this crisis and they completely blew it.

And now, I just think people are completely sick of it.

Sick of Labour’s cynicism; sick of their incompetence; sick of their irresponsibility.

MORE FOR LESS

So it will fall to this Party to offer the responsible politics the country expects in this age of austerity.

But it expects more from us than a hair shirt and a stern lecture.

Over the past three years, we have set out a particular vision of the good society.

A fairer, safer, greener Britain - where opportunity is more equal.

Good schools. A better NHS.

Our broken society – on the mend.

Our battered economy – rebuilt, with modern, hi-tech enterprise; well-paid, rewarding jobs; where our standard of living and quality of life rise together.

We have explained that we want to achieve these progressive aims through Conservative means:

Personal responsibility. Social responsibility.

Taking power from the state and giving it to individual people and communities.

Is this vision dead?

Does the age of austerity force us to abandon our ambitions? No.

We are not here just to balance the books.

There’s more to our mission than coming in like a bunch of flint-faced accountants and sorting out the finances. By the way, I want to make it clear I’ve got nothing against accountants.

The last time I talked about flint-faced accountants I got a letter from the wife of an accountant saying: “Dear David Cameron…my husband isn’t flint-faced – he’s actually very good looking.”

The question is: how does government help achieve these wider aims in the age of austerity?

And the answer is: by delivering more for less.

That in turn means four big changes for government and the role of the state.

First, a return to traditional public spending control.

Second, a new culture of thrift in government.

Third, curing our big social problems, not just treating them.

And fourth, imagination and innovation as we harness the opportunities of technology to transform the way public services are delivered.

TRADITIONAL SPENDING CONTROL

So the first, and most obvious part of delivering more for less is to deliver the ‘less.’

The days of easy money are over, and we have no option but to weed out spending that is not essential.

In opposition that means not making pledges you can’t keep – and we haven’t.

It means not signing up to spending plans you can’t afford – and we didn’t.

We’ve made a good start by making sure we won’t arrive in government with a whole bunch of unaffordable commitments.

We opposed the £12 billion Labour wasted on the VAT cut.

We were against the fiscal stimulus.

We said they should reduce their spending plans back in 2008.

And now we’re saying they should abandon their irresponsible plan to increase spending in 2010.

Controlling public spending and delivering more for less must start right now.

Not next year, not after the election – now.

We’ve made it clear that a Conservative government would spend less than Labour.

We’re not frightened of their idiotic ritual chants about “cuts.”

Everybody knows that Labour’s Debt Crisis means public spending cuts.

And instead of putting them off, Labour should be making them today.

Here’s how they could start – by reversing those extensions of the state that do more harm than good and which Britain would be better off without.

So scrap the ID cards scheme.

Cancel the ContactPoint database.

And get rid of Regional Assemblies and all that useless regional bureaucracy.

Those may be easy choices for Conservatives.

But we’ll need to make hard choices too.

It is not easy, or popular, for governments to take money away from people.

But when there are still millions of people in this country living in poverty, and when the age of austerity means we must focus on the real priorities can we honestly say it’s right for people earning over £50,000 a year to get state benefits in the form of tax credits?

With a Conservative government, tax credits will be there to help make society fairer, not the state bigger.

And we must apply the same discipline throughout government.

That means making sure that public sector pay and pensions reflect the realities of the economic situation.

Let me make it clear to everyone who works in the public sector: we will honour existing pay deals, including any three year pay deals.

But many of them end next year.

And this is the deal we’ll be offering you then:

We will help you by getting rid of the central direction and bureaucracy that undermines your professional autonomy and morale.

And in exchange we will ask for your help in solving Labour’s Debt Crisis by keeping the cost of public sector pay only as high as the country can responsibly afford.

Ever since I became leader of this Party in 2005, people have been asking me to tell them, not in general terms but in specific detail what a new Conservative government would do on tax and spending in a Budget in 2010.

George and I have resisted that pressure and I believe experience shows we’re right.

Detailed plans or shadow budgets would become quickly out of date.

But in the weeks and months ahead, the Shadow Cabinet will redouble its efforts to identify wasteful and unnecessary public spending.

Make no mistake: I am very clear about how much more work there is still to be done in order to identify significant future savings.

We will carry out this work.

We will do so responsibly.

And in time, we will set out the hard choices that lie ahead.

A GOVERNMENT OF THRIFT

But cutting spending the country can do without is not going to deliver the scale of change we need.

Delivering more for less can’t just be about top-down cuts imposed by ministers.

We need a massive culture change at every level of government, to make the state careful, not casual, with public money.

Every pound of public spending has been earned on the shop floor, the factory floor, in the office.

It’s not government money, as Labour like to say.

It’s your money.

If Labour remembered that, maybe they wouldn’t have wasted over £2.3 billion – yes £2.3 billion – refurbishing the offices of the Ministry of Defence.

That’s more than they take in one year from Air Passenger Duty.

So next time you’re in your airline seat, just be grateful you’ve helped buy a comfy new chair for some bureaucrat.

This kind of extravagant waste is absolutely run of the mill in government.

From the £90,000 wasted on pot plants in the Department of Transport to over twelve billion wasted on the NHS computer they don’t think twice about splashing your cash.

Why?

Because of the culture of profligacy Labour have created.

Where spending money is a good in itself, regardless of what it gets you.

Where Ministers brag about getting a bigger budget than the next guy.

Only in government do people automatically think that the way to get things done is to spend more money.

But it’s just not true.

Our education departments employ nearly four thousand people, and Britain is ranked seventeenth in the world league table for maths.

Sweden is at number ten, and their education department employs just three hundred people.

In the London Borough of Southwark, a new social enterprise called Southwark Circle is delivering vastly improved care services for less money designed by elderly people for elderly people using local social networks to bring real improvements to people's lives.

Our government spends nearly £400 million a year on advertising to reach sixty million people while Wikipedia, one of the largest websites in the world, spends about one per cent of that to reach 280 million people.

Sweden’s education department. Southwark Circle. Wikipedia.

They’re all delivering more for less.

If they can do it, why can’t our government?

Well I believe it can – by replacing Labour’s spendaholic government with a new government of thrift.

Here’s how we’re going to go about it.

With a Conservative government, if ministers want to impress the boss, they’ll have to make their budgets smaller, not bigger.

On my watch it will be simple: if you do more for less you get promoted if you do less for more, you get sacked.

If we’d had this approach over the last twelve years, I don’t suppose there’d be a single Labour Minister left.

But this culture of thrift must apply to the civil service too.

So we’ll impose a new fiduciary responsibility on senior civil servants – a contractual obligation to save the taxpayer money.

And every government department needs a proper finance director.

Some of them today aren’t proper accountants – flint-faced or not.

With such huge sums of public money at stake a Conservative government will make sure we have the professional financial controls the taxpayer has a right to expect.

FROM TREATMENT TO CURE

But let’s not pretend that cutting waste, and turning round the culture, will be enough to deal with the decade of debt that will be Labour’s legacy.

Achieving more for less in this age of austerity is not just a technical question of managerial efficiency.

It is a philosophical question too.

It’s about your approach to the big social problems that government must help address.

And we have a fundamentally different approach to Labour.

Because Labour always want to expand the state, they focus on treating social ills leaving the state with an ongoing role.

Because we want to expand society, not the state, we focus on curing social ills so the state is no longer needed.

For example, when it comes to poverty, Labour’s approach is just to treat the symptoms by spending more money.

Our approach is to understand why people are stuck in poverty in the first place, and help them break free by tackling welfare dependency, addiction, debt, poor schooling and above all, family breakdown.

There is no way this country will prosper in the twenty-first century, let alone deal with the debt crisis if we keep asking taxpayers to foot the £100 billion a year bill for the broken society.

So our plans for school reform, welfare reform and strengthening families plans which might once have been seen as just socially desirable in the age of austerity become economically essential.

REFORM AND INNOVATION

And here’s another way our philosophical differences with Labour give us an advantage in the battle for budget discipline.

We don’t believe in top-down central control: we believe in local control.

We don’t believe in taking power, we believe in giving it away.

And that’s the principle behind many of our most important reform plans: taking power from the central state and giving it to local people.

So in education we’ll end the state monopoly and allow new schools to be set up, giving parents real school choice for the first time.

In the NHS we’ll scrap those bureaucratic process targets and instead publish the health outcomes that matter, so patients can really choose where to be treated.

And in prisons we’ll redefine their purpose: from places where criminals are just locked up, to places where criminals are rehabilitated.

We’ll invite social enterprises, private companies and community organisations to help run our public services not in a limited, half-hearted way, like Labour have, but with passion and enthusiasm, because we really believe in it.

And we will pay these new providers by the results they achieve, so there’s a real incentive to improve.

Trusting people, sharing responsibility, decentralising and devolving power.

When it comes to running public services, that’s the way you get new ideas, new people, new ways of doing things.

And guess what, when you do that, you not only get better results.

You save money too.

In a phrase, you get more for less.

TECHNOLOGY

And there’s one more way to combine financial discipline with our positive vision.

Today, technology means everyone can have the information that was once kept by the privileged few.

In the hands of a party like Labour, that believes in central control, this opportunity is stifled.

Just look at computerising the NHS.

Labour say: let’s call in the expensive consultants. Let’s commission a massive IT project. Let’s make the state more powerful with a new, centralised computer to store everyone’s health records.

The result: NHS Connecting for Health, costing over twelve billion pounds.

One part of it is the Electronic Patient Records system - a central state-run database designed to let GPs, hospital doctors and nurses share your medical notes.

Now I want you to imagine how we’d have gone about it, if we’d had the chance.

We would have said: today, you don’t need a massive central computer to do this.

People can store their health records securely online, they can show them to whichever doctor they want.

They’re in control, not the state.

And when they’re in control of their own health records, they’re more interested in their health, so they might start living more healthily, saving the NHS money.

But best of all in this age of austerity, a web-based version of the government’s bureaucratic scheme services like Google Health or Microsoft Health Vault cost virtually nothing to run.

So this is where some really big savings could be made.

Not just shaving a bit off this budget here; that cost there.

Instead replacing whole chunks of the expensive, bureaucratic government machine with more modern methods - for a tiny fraction of the cost.

But it will only happen if you have a government that actually believes in giving power away.

TRANSPARENCY

And in an age when we’re asking people to put up with tax rises and spending cuts to pay for Labour’s Debt Crisis we can use technology to give people even more power – through transparency.

If a company is failing and new management comes in, transparency is the first thing they demand - opening up the books and seeing how every penny is spent.

It’s going to be the same with us.

So today I can announce our ‘People’s Right to Know’ plan – a democratic check on wasteful spending.

Every item of government spending over £25,000, nationally and locally, will have to be published online.

If you want to see how it could work, look at the Missouri Accountability Portal.

It will show you why transparency is such a powerful tool in controlling public spending.

And it can have an especially powerful effect when it comes to salaries.

Spending on public sector salaries has soared under Labour.

Where this has gone to nurses, doctors, teachers, police and other frontline stars, that is money well spent.

But it’s certainly not true of the wage bill for the swarm of unaccountable quangos that has infested our country under Labour.

In the age of austerity, where we’ll be asking frontline public sector workers to help us keep pay levels down we cannot leave the pay of public sector bureaucrats untouched.

People have a right to know exactly how much they’re getting.

So we’ll publish online all public sector salaries over £150,000.

Let’s see which officials have been getting rich at the taxpayer’s expense - and whether they’re worth the money.

Today we’re publishing a list of some we already know about.

Ed Richards at OfCom – he earns over £400,000 a year.

In fact, if you took the top thirty salaries at Ofcom, the communications watchdog, you could provide the whole of Cheltenham with free broadband access.

And then there’s the British Waterways Board.

The salaries of their top four employees – Robin Evans, Nigel Johnson, James Froomberg and Phillip Ridal – add up to £900,000.

That’s thirty nurses.

In the age of austerity we’ve got to ask ourselves what we really value in the public sector: and I know what the answer is.

It’s not the fat cats but the frontline workers.

CONCLUSION

This is the post-bureaucratic age.

With imagination and determination, we can deliver more for less.

For me, this is very personal.

Fifteen years ago, I was in the Treasury as we had to deal with public finances that had got out of control; debt that had got too high.

We had to put up taxes, and I hated it.

But it was the right thing to do and that lesson has stayed with me.

That’s why I’m a fiscal conservative.

That’s why, when it came to that big decision to oppose the VAT cut and the so-called fiscal stimulus, I didn’t consult a focus group or an opinion poll I just knew it was the right thing to do.

And there’s something else.

I know that if we win the election, we’ll be judged a successful government if we deal with the debt crisis - and a failure if we don’t.

Believe me, I get that.

I think people know by now that I want us to stand up for the poorest in Britain and to show that fiscal responsibility can go hand in hand with a social conscience.

And they know I will stand up for the aspiring and the enterprising, kicked in the teeth by a Labour Party reverting to type.

We will show that social responsibility can go hand in hand with personal ambition.

But what people also need to know is that I will stand up for responsibility and thrift.

Those are values this country needs today.

Labour’s leaders say only they stand for fairness.

Fairness?

These Labour ministers, saddling future generations with debt?

These Labour ministers, making our children pay the price of their incompetence?

Their “fairness” is utterly phoney.

So let’s turn our anger into passion and our passion into action to give Britain the leadership she needs.

Yes if we win the election, we may not see the full fruits of our labours in the lifetime of our government.

But if we stick together and tackle this crisis our children and grandchildren will thank us for what we did for them and for our country."

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