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Philip Hammond: Protecting front-line public services requires bold decisions

Last week, the man who has spent a decade wrecking our economy stood up in Brighton to plead for another five years to "finish the job".

And he expected to be taken seriously.

No vision, no argument, no judgement. No apology

Just a long, unfunded shopping list of spending pledges with no price tag.

Maintaining his track record of fiscal incontinence long after the Treasury is empty,

Showing no understanding of the scale of the debt crisis he has created,

The Walter Mitty of British politics to the very end.

And all capped with the bare-faced lie that our troops in Afghanistan have all the equipment they need.

We, in this party, know where the heroes are...... and it isn't 10 Downing Street.

No mention of the doubling of the national debt;

Nor the ruination of a pension system that was once the envy of Europe;

The sale of our gold reserves at a quarter of what they would fetch today;

Or the surrender of that hard-won EU rebate ;

Instead, he boasted of his "experience". 

Presumably, his experience of taking over an economy with falling borrowing and unemployment, rising exports and strong growth from Ken Clarke in 1997....

.... And turning it into a giant Ponzi scheme built on a mountain of debt.

The British people have had enough of their "experience" of his management of our economy.

Poll after poll shows that Cameron and Osborne, not Brown and Darling, are the team trusted to sort out Labour's mess, and to lead us into the recovery.

What Brown presided over was not prosperity, but the illusion of prosperity. 

Fuelled by an unsustainable house price bubble, an irresponsible banking boom and an unaffordable public spending binge. 

Now the bubble has burst and we are in the worst recession since the war.

Some, indeed, might call that "Boom & Bust". 

But I have some good news:

The recession will come to an end. 

And so, too, will Gordon Brown's misrule of our country.

We don't know precisely when. But on either count, it can't be soon enough. 

Our task is to build for the future; for the re-birth of Britain as a sustainable, diverse, high-productivity, economy,

Built on savings & investment, not borrowing and debt.

We know what needs to be done:

Ken Clarke is working to make Britain the destination of choice for global investors and high-tech manufacturing, and the most attractive location in the world for wealth and job creating entrepreneurs.

George Osborne has set out our detailed plans for proper regulation of the financial markets under the watchful eye of the independent Bank of England -

To ensure that never again can the excesses of a tiny minority threaten the livelihoods of the great majority.

And Theresa May, David Freud and David Willetts have developed our Get Britain Working programme to tackle the scourge of youth unemployment, and to make sure that the victims of Brown's recession do not become a lost generation.

Under David Cameron's Conservatives, Britain will be a place open for business, with a strong and sustainable economic model for the recovery. 

But there is an elephant in the room;

An elephant that Gordon Brown ignored for most of the summer. 

And even now, one he only acknowledges on good days:

The gaping hole in Britain's public finances.

At last year's conference I predicted what I called then an "almost unimaginable" budget deficit of £90 billion for this year. 

One year on, the official figure is nearly double that and Ministers are briefing privately that it could be £200billion -

That would be more than £3,300 for every single person in the country, this year alone.

£380,000 per minute being added to our national debt;

A debt which our children and our grandchildren will still be paying off in a generation's time.

A clear and present danger now faces our country:

A deficit of this size, left unchecked, will undermine the economic recovery which should bring the growth and the jobs, and above all the hope, that Britain so desperately needs.

That is why it is time for change.

Because mending the gaping hole in the public finances is the most urgent challenge facing this country;

And it is one we Conservatives have shown we are ready, willing and able to address.

No Shadow Chancellor can ever rule out raising taxes, but in our judgement, we are at the point where further significant tax increases will seriously erode Britain's competitiveness.

So we concluded months ago that public spending would have to bear the brunt of the burden - and that will mean cuts.

So did Labour, as the leaked documents have now revealed.

But while David Cameron was telling the British people the truth, however tough,

week after week, Gordon Brown was denying it.

Pedalling his bogus dividing line of "Tory cuts versus Labour investment".

Daring to label David Cameron "Mr 10%"

while secretly planning his own 10% cuts.

Taking people for fools. Again.

Until eventually, when he was almost literally the only person left in Britain who believed it,

and his own Cabinet could stand it no more,

he was forced to admit defeat and execute the biggest, most humiliating, U-turn of his career.

Slinking off to Liverpool to utter the C-word to the TUC.

Now, having lost that argument,

He has invented a new dividing line:

"Tory cuts now versus Labour cuts later".

Desperate to put off spending cuts into the distant future.

Burying his head in the sand.

But he is still wrong, and what he is proposing would be a disaster for Britain:

Borrowing and spending yet more, to try to mask the severity of the recession until after an election.

Like the VAT stimulus that stimulated no one, but added an extra £1 billion a month to our mountain of debt.

The car scrappage scheme that has seen £8 out of every £10 spent by the Treasury go abroad. 

Spending money we cannot afford because he did not fix the roof while the sun was shining.

But what has got Britain through the last year has been falling interest rates, not VAT cuts.

What helped us avoid even more job losses, home repossessions and business failures was the Bank of England's actions, not Gordon Brown's.

That's why David Cameron and George Osborne have been right to take the tough political decisions and stand firm against more unaffordable borrowing,

And to focus instead on keeping interest rates low to support Britain's businesses and families in the recovery.

When you need to borrow £200 billion a year, you do need to listen to what the potential lenders are saying.

And the message from the markets is clear:

Our creditworthiness is in question for the first time in decades; Britain needs to go further and faster than Labour is prepared to go in closing the fiscal gap.

Alistair Darling's promise to halve the deficit by 2014 will still leave it as big a share of our national income as when Denis Healey went cap-in-hand to the IMF.

If we do not act decisively and convincingly to bring spending down there is a real risk that long-term interest rates will have to rise.

That would be a disaster for businesses that want to invest to create new jobs.

It would be a disaster for homeowners and households who are struggling to keep up with payments on £1.4 trillion of debt.

And it would be a disaster for our public services - because we live in the shadow of a potential "debt trap".

By 2013 we will be spending £63 billion a year on interest on the national debt.  Twice what we spend on Schools. More than we spend on Defence and Transport put together.

If interest rates go up, we will have to find yet more money to service the debt, and that would mean more cuts to other public spending.

So, protecting our front-line public services needs bold decisions, not dither and delay.

A clear commitment to living within our means.

A credible plan to cut spending and restore fiscal discipline.

Brown claims we would target front-line services.

His latest grotesque misrepresentation is that we'd do it for fun.

That is a shameful lie.

He could not be more wrong, and we will prove him wrong.

Any fool can spend money.  Gordon Brown has demonstrated that in spades.

And any fool can cut a budget.

The challenge is to do it in a way that delivers more with less.

It's a challenge that Labour has failed miserably.

And one that dozens of Conservative-controlled councils across the country have already delivered on.

And it is the test by which we expect to be judged if we form the next Government.

So the question at the next General Election is not "who will cut spending".  Whoever forms the next Government will - and if they don't they'll soon be on the plane to the IMF.

The question is "which team has the skills, the determination, the commitment, the vigour and the unity of purpose, to take up this challenge?

to deliver the intelligent cuts that are needed to protect and secure our frontline public services for our children and our grandchildren to enjoy?".

Labour cannot do it. It's not in their DNA. They have tried .... and failed.

The irony is that it is Labour's cuts that would decimate front line services, because Labour will not, cannot, embrace the reforms that are needed.

The reforms a Conservative Government will deliver.

Reforms to the way central government works:

Taking out layers of management;

Linking senior civil servants' pay and promotion to the way they manage taxpayers' money;

Publishing details of all spending over £25,000;

Creating a powerful Office of Financial Management to put Value for Money and the battle against waste at the very heart of  Government;

And reforming the way public services are delivered too.

Not by fiat issued from Whitehall.

But by changing the culture from the bottom up:

By decentralising power and decision-making to the professionals in the front line of public service delivery.

And because you can't innovate from inside a straitjacket

we will set our front-line public service workers free from the straightjacket of Labour's controls.

We will tell them the results we want, and the budgets available to deliver them.

But treat them like the professionals they are.

Recognise that they, not some pen-pusher in Whitehall, are best placed to find the solutions that will work in their hospital, their school, their neighbourhoods.

And the most successful organisations, that excel at cutting waste, improving services and saving money,

should be able to reinvest those savings in services.

So a Conservative Government will end the short-sighted, self-defeating policy of clawing-back all the savings made from allocated budgets.

And we will end, too, the lunacy of annual "use it or lose it" budgets that create a mad panic of wasteful spending at the end of every year.

Instead, we need to see more and more public service delivery budgets being based on the results delivered - like the NHS pay-per-treatment tariff system 

ensuring that a tightening of budgets delivers real efficiency gains, not cuts in services.


We do not delude ourselves that any of this will be easy,

Or that it will gain us short-term popularity.

David Cameron and George Osborne have already shown their willingness to take the tough decisions in our long-term national interest.

To argue the case for what is right, not what is fashionable, or easy.

So now there is just one road block to reform

The reform Britain so desperately needs.

The same roadblock that has thwarted all attempts at reform over the past 12 years.

But change is coming.
 
We have not spent the summer in denial;

we have used the time to pick the best brains in the public service, in the academic world and in the private sector.

To prepare our plans and research our ideas.

Britain is ready for change.

And we are ready to deliver it.

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