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Osborne: economic policy for a new generation

In his speech to the Conservative Party Conference, Shadow Chancellor, George Osborne said:

"For the first time for my generation this Party has a serious chance of winning the next general election.

The first chance in years to do things and not just say things.

That's because in the last ten months we started to do something difficult.

Something people didn't believe we would do.

Something, to be frank, I wondered whether we could do.

We have faced up to the need to change and together we are turning this party into a winning force again.

As our opponents talk to themselves we have looked out at the world.

As our opponents fight over how to get rid of their leaders, we are united behind you, David, our inspirational new leader.

We all saw the Labour Conference last week.

As far as I could tell, the way to get the biggest round of applause there was to announce that you were quitting.

What a spectacle they were.


Fighting each other.

Talking about themselves not the country.

United only when attacking other parties.

We've been there.

We've done that.

We're never going back.

So in this debate we have done something we don't normally do here - we have listened to people who are not paid-up members of the Tory tribe.

Will Hutton from the Work Foundation. Jenny Watson from the Equal Opportunities Commission. We enjoyed listening to you and I hope you have enjoyed engaging with us. We all thank you for coming.

Last week Tony Blair spoke to his Conference about the Google generation. Well, this week the Google generation got the guy who runs the company to come and speak to us.

Thank you, Eric, for flying half way round the world to give us your extraordinary vision of the future.

And this is my chance too to thank my superb Treasury team for all their hard work. Theresa Villiers, Mark Francois, Mark Hoban, Paul Goodman and Andrew Selous.

Together, each month, we face Gordon Brown and his Ministers across the Dispatch Box - let me say it's a job we all find more fun now we've discovered that Ed Balls was once a member of the Conservative Party.

It's true.

Don't worry, Ed, we won't tell anyone. We're as embarrassed about it as you are.

Today's debate has touched on issues that we haven't always talked about at our Conferences - but issues which affect every family in the country.

I know that there may be a few who think childcare is something to be discussed in mothers' groups not on conference floors.

Or that equal pay for women should not get an equal billing.

Well we in this hall think they're wrong.

These issues go to the heart of what it means to be a civilised society.

And we have Conservative answers.

Childcare help that isn't dictated to parents - but supports the choices parents make for themselves.

Extended flexible working in the fight for equal pay and a better family life.

For we know it is the family, not the state, that brings up our children, and forms the building blocks of our communities.

These issues matter because the family matters.

Let us resolve this: never again will we abandon this crucial battleground to our political opponents.

For the left always responds in the same clumsy and ineffective way: regulate, dictate, ban, control, tell people how to live their lives.

It is so old-fashioned. So out of touch with our times. It is so - how can I put it - Gordon Brown.

Let me do something politicians do all too rarely. Let me acknowledge some of the achievements of my opponent.

I think making the Bank of England independent was an idea whose time had come.

I think sticking to the tough spending plans inherited from Ken Clarke was the right thing to do.

I believe Gordon Brown's efforts with Tony Blair to help Africa's poor are genuine and they have our total support.

Part of our new approach to politics is never being embarrassed to say when you think your opponent is right;

and it means you earn the right to be heard when you say where they have gone wrong.

Gordon Brown has made many mistakes.

His £5 billion tax raid on our pensions was a disaster for which pensioners will pay a heavy price for many many years to come.

His decision to spend £2 trillion pounds on public services while blocking their reform was a truly catastrophic error of judgement.

His obsession with command, control and complexity have, in the words of Alan Milburn, caught millions in the means-test and left "poverty more entrenched".

His combination of higher taxes, more regulation and bigger government has hit family incomes and made it more difficult for us to compete in the world.

He talks about his moral compass. Well we know about this Chancellor's compass.

Taxes are heading north; pensions are heading south; the jobs are vanishing east and the new economy is going west.

Our message to voters must be clear: if you want change you will have to vote for change.

But we must also be clear with ourselves: it is not enough to attack our opponents.

There's that famous saying that oppositions don't win elections; governments lose them.

I think it's only half true.

Yes, if the country isn't looking for change then it's very difficult for an opposition to succeed.

We have learnt that the hard way.

But when governments become unpopular, as this government is unpopular - and when the public are looking for change as they are looking for change today - then the spotlight falls on the opposition.

Well the spotlight is certainly on us now.

We are no longer being judged merely as an opposition.

For the first time in a decade we are being judged as a future government.

So there are tests which we have to pass.

We have to show that we are disciplined.

We cannot any more promise the earth safe in the knowledge that we will never be asked to deliver it.

We have to show that we are serious.

We cannot any more pretend that complex problems have simple answers.

Above all we have to show to the people of this country that we are responsible.

We cannot promise to fund every worthy cause, please every passing protestor and slash every unpopular tax confident that we won't ever have deliver a real Budget.

The speeches you hear at this conference - they are no longer just words.

The pledges we make this week - they are no longer just press releases.

Let the message from our Conference be this: we are tired of the luxury of opposition. We want the hard choices of government.

Hard choices about how Britain can compete in the new global economy.

A huge shift of economic power is taking place on our planet from west to east and from rich to poor.

Choices that were once the preserve of the few are becoming available to the many in their own living room.

Individuals have access to more information at a click of a button than whole governments could gather just a few years ago.

These changes are exciting and liberating but for many people they are daunting too.

For the old assumptions are being torn up.

Last month I went with David to visit the Institute of Technology in New Delhi.

One of the computer science students we met said to us: "You know, a few years ago all the top graduates went to Silicon Valley. But not anymore". "The best jobs are in India now" she said.

We've got this cosy view in Britain that everything will be fine in the future. The Chinese and Indians can do the cheap unskilled jobs and we'll do the clever stuff.

Well let me let you into a little secret: no one has told them that.

Every age has its precious commodity. Once it was salt, then silk and iron ore, then oil.

The precious commodity of the future is education - and Britain doesn't have enough of it.

So what do I think we need to do to make Britain competitive again?

We could start by getting science and maths back into our schools.

A-level maths entries have halved. Now university science departments are closing. That's exactly the wrong track for the new global economy.

And the culture, not just in Whitehall, that sees as the answer to every problem a new regulation must change fundamentally.

We need to fix our broken planning system so that businesses can expand and young families can buy homes.

Sixty thousand pension schemes have closed since Labour came to power. One hundred and twenty five thousand people have lost their pensions.

It will be up to us to rebuild a pension system that has been comprehensively, single-handedly destroyed by this Chancellor.

And there's one more thing.

I want lower taxes.

Because lower taxes would help Britain to compete.

I think we're crazy as a country to be raising our taxes when most of our competitors are cutting theirs.

I look at Ireland and I see what lower business taxes can achieve.

I believe that lower taxes extend the space of freedom in our society.

I believe they help people to take greater social responsibility over their own lives, and the lives of others.

And when it comes to spending over the economic cycle I want our economy to grow faster than our government.

But let me tell you something: there is no such thing as a tax cutting Shadow Chancellor.

Surely we must have learnt from three election defeats this simple truth?

We must win the argument on the economy.

We will never do that if people believe our tax policy comes at the expense of their public services.

That will not happen.

We will share the proceeds of growth between the lower taxes this country needs and the increases in spending on public services every government should provide.

And we will never ever win the argument on tax - or anything else for that matter - if people fear for one moment that we might endanger the stability of the economy.

Endanger the low mortgage rates and low inflation families depend on.

If we haven't learnt that in our long years in opposition then we have learnt nothing.

High mortgage rates, and the failed ERM experiment that produced them, are part of the reason we have been out of office for a decade.

Well I am not going to allow that to happen again.

I want people to know this from us: that we will never take risks with inflation or interest rates.

I want people to know this from us: we will never link our currency or join the euro.

I want people to hear this Party say with one voice that economic stability will always come first.

And let that be clear when we talk about taxes.

Do you know who our last successful Shadow Chancellor was? I mean the last one who became the real Chancellor?

Geoffrey Howe. Almost thirty years ago.

He wrote to me last week. He wished me good luck and he enclosed a copy of the speech he made to this Conference in 1978.

Then, as now, the country was wondering whether we were ready for government.

That's why Geoffrey said that the first priority of the Thatcher Government would be to 'conquer inflation' with a 'framework of stability'

That was his priority then and it is my priority now.

Let no-one ever portray sound money as a betrayal of Conservative principles.

For sound money is the oldest Conservative principle of all.

As Margaret Thatcher herself said:

"I am not prepared ever to go on with tax reductions if it meant unsound finance"

She was right on that as on so much else.

Sound money is the only sustainable path to lower taxes.

It is also the bedrock upon which we will build simpler, flatter, and fairer taxes.

Let us end for good the secret, underhand, stealthy taxation of the British public that has been the hallmark of this Chancellor.

Let us end for good the monstrosity of the tax affairs of the poorest being more complicated than the tax affairs of the richest.

The independent Tax Reform Commission is helping us with a menu of ideas to do that.

We will rebalance our tax system. I want to shift the tax burden from families, jobs and investment onto pollution and carbon emissions.

We will tax the bad not the good.

That will be our approach.

And to those who still want us to make up front promises of tax cuts now, we say:

we will not back down.

We will not be pushed or pulled.

We will stick to our principles.

We will do what is right.

I am not going to write my 2009 Budget in 2006.

For the British people are sick of politicians who promise more than they deliver.

We will deliver more than we promise.

And in doing so we will have a chance of restoring people's faith in our political process.

That loss of faith is greatest among my generation.

I am not from the great and brave generation that stormed the Normandy beaches and defied the Blitz.

I am not from the generation that built the welfare state

or the generation that pushed the boundaries of the permissive society;

or even the generation that fought for freedom, defeated socialism and won the Cold War.

I am of the generation that inherited a world shaped by these struggles.

And now we have our own struggles to confront.

The struggle for jobs in an age of competition.

The struggle to educate in an age of knowledge.

The struggle to conquer poverty in an age of plenty.

The struggle to save our planet in the age of climate change.

The struggle that each generation must face to have the strength of our convictions and the courage of our principles;

the strength to prove that hope is always better than fear;

the strength to believe that our future can always hold more promise than our past.

So, yes, we are grateful for what we have been given but we are not satisfied with the world we leave to our children.

We haven't changed the Conservative Party just to win an election.

We have changed the Conservative Party to shape the future of our country and destiny of our world.

We are the generation that freedom produced.

We will not let you down."

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