Willie Rennie speech to the David Hume Institute


In a speech to the David Hume Institute on 13 January 2014, Scottish Liberal Democrat leader Willie Rennie argued that only the Liberal Democrats can build a stronger economy and a fairer society, giving opportunity to everyone:

Can I begin by thanking the David Hume Institute and ICAS, the Law Society of Scotland, the Royal Society of Edinburgh and the Institute and Faculty of Actuaries for organising and supporting this series of lectures.

This is the second in which I have participated. I certainly hope that they can become an established part of the political debate in Scotland.

It gives a rare opportunity for the party leaders one by one to set out – under the same conditions – their offer to voters and their vision for the future.

It gives a platform to make important moves forward.

Last year I was able to announce in this room that I had asked Ming Campbell to reconvene his Commission, to have a Campbell 2 to set out an ambitious timetable for implementing more powers for the Scottish Parliament.

I will say more about that later. But you will recognise immediately that what I set out to this forum twelve months ago will help shape Scotland for generations to come.

Last year my title was “In Britain, In Europe, In Work”.

I will look back briefly at where we are with those. We – Scotland – are still in all three. But each remains at risk from the policy stances of each of my opponents. I will explain why.

I will take a further look at work and the economy and how we have progressed over the last five years since 2010.  It has been the most astonishing period in politics and economics that I can remember.

I will show how critical it was that politics and economics are linked.  That recovery and growth in the UK economy are linked to the decision of the Liberal Democrats to put the national interest first and to form a stable government capable of tackling the crisis they inherited.

Looking to the future I will make the case to anchor the next five years in the centre ground.  That we avoid a return to see-saw politics and see-saw economics.

By doing that I believe we can continue moving from rescue to recovery. That means we can look to the future, building the kind of country we want to see.

We need to avoid the mistakes of the past and accelerate our journey in a liberal direction.

So I will expand on the hopes I set out last year for the future development of the Scottish economy, and for how future prosperity should be felt by every person, whatever their background.

Above all, I will show that the essential, liberal offer should be a strong economy and a fair society that gives opportunity for everyone to get on in life.

In Britain. In Europe. In Work.

So let me start by reminding you of where I left off last year.

I chose “In Britain, In Europe, In Work” as my theme.

I showed that many of the arguments for Britain leaving the European Union had echoes and parallels in the arguments made by those wanting to leave the UK – that “decisions should be made only by people who live here” and so on.

I showed how Britain remaining part of the EU was important for three million jobs across Britain and how Scotland remaining part of the UK was important for the ten per cent of jobs that rely on the single market.

In Britain. In Europe. In Work.

The good news is that we are still in all three.

And there are 168,000 more jobs in Scotland since 2010 – a record number.

But all three are still at risk.

Each from parties hoping to make gains at the UK General Election.

Labour still show – and people know it – that they have not learned the lessons of their mistakes. They let the banks run wild, allowed consumer debt to spiral to one and a half trillion pounds and let national borrowing become so high it placed the economy at massive risk when the banking crisis hit. Their plans are still to borrow more than we can afford, putting us all at risk again. You cannot trust Labour with the economy.

The Conservatives risk jobs in two ways.

They are set upon a lurch to the right that will give us permanent austerity – slashing jobs in the NHS, schools and essential public services. They want to shrink the state to reach an ideological destination shared with the Tea Party in the USA. They always have.

But it is the risk they will take on Europe that risks most jobs.

The Conservatives are still in chaos on Europe. Their most senior people, from the Prime Minister down, can’t answer straight questions about how they will vote in their own proposed referendum on membership.

And there is still a risk to Scotland’s place in the UK, and to the jobs and prosperity that rely on us being part of the UK.

The SNP want independence by the back door.

As a minimum they say they want a form of ultra-extreme devolution that doesn’t exist anywhere else in the world and which would inevitably tip Scotland into independence.  They call it Home Rule but that great advocate of Home Rule William Gladstone would be appalled at the sleekit redefinition of this liberal policy.  William Gladstone was no nationalist and Alex Salmond is no home ruler.

But that’s not the only risk from them.

The SNP have a habit of redefining what an election was about after the votes have been counted. They change and change again their position on fundamental issues.

That is a strong charge for me to make.

But look at 2011 Scottish election.

The election was all about issues such as the council tax freeze. But after the votes were counted the SNP said it was an endorsement of the devolution of alcohol excise duties.

I can tell you not a single one of the thousands of voters I met during or after that campaign had said anything about that.

They say they don’t vote on English matters at Westminster. But now they say they might.

They told us the day before the referendum that it was a once in a generation thing. Alex Salmond and Nicola Sturgeon stood beside a poster saying “One Opportunity”. The day after that referendum they started planning the next one.

I find it inconceivable that their target to win every Scottish constituency in May will not result in an attempt by them to get independence by the back door, regardless of what they say now.

The former First Minister told newspapers last week he now only wants ‘home rule’, not independence. But only 20 months ago he said that ‘home rule’ was independence.

Confused? Well you should be. And this would all be an intriguing word game if it wasn’t all just one ballot paper away from happening.

All the evidence is that if you vote for them today, you won’t find out until tomorrow what they are claiming it all means.

Those who thought that winning the referendum by almost half a million votes was enough to put the issue to bed for a generation or even a lifetime need to think again.  The nationalist campaign continues.  They will use your vote in May – for their cause, not for anything else.

We are through the referendum but the UK is still at risk.

We are through the European Elections but Europe is still at risk.

We are through the recession but the economy is still at risk.

Still in Britain. In Europe. In Work. But all three are still at risk.

2010-2015

I said at the start that I would look in some detail at the period 2010-2015.

It is a story that begins in May 2010 with a coalition government formed against a backdrop of a sovereign debt crisis sweeping Europe – Athens literally ablaze, Italy and Portugal teetering on the brink and the United Kingdom, with its broken banking system and vast budget deficit, dangerously exposed.

It is a story that will record the shared sacrifices that were required to get the economy back on track and the public finances back in black.

And it is a story of those sacrifices beginning to pay off.

Remember back to that week of the General Election in 2010.

The world waited to find out if Britain would get a government at all, if that government was likely to last and if that government had the capacity to turn around the country’s financial situation.

Britain wasn’t alone. Italy, Portugal and Greece were in turmoil too.

But Britain’s deficit was the largest in the G20 and the largest structural deficit in the G7.

The stock markets were nervous. The international money exchanges waiting.

It was that moment that the Liberal Democrats put the national interest first.

So, today, employment is at the highest level in the whole of our history, unemployment is falling, wages are rising faster than inflation and we have joined the fastest growing economies in the G7.

The national interest demanded a government that could tackle the crisis and we delivered.

Liberal Democrats saw the national interest and responded. Putting national interest before party interest and staying the course when others repeatedly predicted we did not have the staying power.

We took responsibility for Britain’s future at one of the most difficult times in our nation’s economic history.

In the best traditions of our philosophy and our party – not because it would be easy, but because we knew it was right.

That is why the international comparison today is so stark.

Last week unemployment in Italy hit 13%. Greece is still in crisis.

Yet in Scotland employment is up 168,000 since 2010.

In the last year alone unemployment has fallen by 44,000.

We have made this progress by creating the conditions for business.

We have implemented targeted tax cuts:

•    68,000 businesses in Scotland are getting up to £2000 off their National Insurance bill – a big boost to small business.

•    Corporation tax will fall to 20% in April, making it the joint lowest rate in the G7.

•    To make work pay we have cut tax for 2.2million people and taken 236,000 Scots out of tax altogether. You'll remember in 2010 the Tories were not interested in these tax cuts for workers.  They had a manifesto of tax cuts for the richest but said tax cuts for the rest of us were unaffordable. These are the very same tax cuts for workers that David Cameron now proclaims and these are the very same tax cuts for the rich that Nick Clegg stopped.  

•    In 2010, the UK was ranked fourteenth in the Global Innovation Index. Today we are ranked second.  To go further the UK Government is increasing the R&D tax credit rates – for SMEs to 230% and to 11% for large businesses.

We are helping the supply of finance:

•    We’ve the Green Investment Bank based here in Edinburgh.

•    The Government backed Business Bank.

•    Export finance, enterprise capital and many other funds.

On technology:

•    The UK Government is investing over £1 billion in improving broadband and mobile infrastructure with disproportionate sums invested in Scotland.

•    The Technology Strategy Board is investing over £200m to establish a network of elite Catapults, including here in Scotland with the Offshore Renewable Energy Catapult in Glasgow.

These are the measures that turned things round.

That was the national interest.

The recovery wasn’t automatic. Look around Europe to see that.

We took the necessary steps to balance the books to give confidence to the markets that Britain was a good place to do business.  And we provided the conditions for business to generate the jobs and taxes to pay for the public services we all value.  We reshaped that economy to make it sustainable, environmental and innovative.

Anchoring the economy in the centre ground is how we do it.

This economic centre ground argument is not new for Liberals and Liberal Democrats.

Russell Johnston once said, “Liberal positioning in politics is like the nose in relation to the rest of the face: somewhere in the middle and out in front”

David Steel wrote in his book A House Divided on the 1978 Lib-Lab pact: “Each swing of the political pendulum threatens to take the country on yet more violently diverse directions to left and right…The political see-saw crashes up and down ever more violently to our discomfort.”

And as Russell Johnston’s metaphor implies, by building a strong economy anchored in the centre ground we can set out in front an inspiring future for a fairer society where there is opportunity for everyone.

The Liberal centre ground prevents the see saw crashing up and down.

The Liberal Democrat vision

So I want to talk a little bit about how I see the route to prosperity in Scotland in the future.

First let me speak about participation in the economy, as I did here last year.

If our country is going to be a success in the 21st century and beyond then it is going to need the talents and efforts of everyone.

If you want a fair society then no one should be left out of the economy or their community.

Too many are at the moment. Even with high employment rates, they can be higher still.

Fundamentally, the route to participation is education.

It has been the route out of poverty and to a life of achievement for a hundred years. The Scottish tradition of education was founded on that notion.

We still don’t do enough.

I have spent the last three years as my party’s leader determined to get a big shift in where we have been putting the emphasis as a country.

If we are going to break the cycle of inter-generational poverty and remove those stubborn barriers that condemn too many people to the margins, then we have to make a radical change.

That’s why I have been campaigning about childcare and badgering ministers for more provision for two-year-olds.

Investment in a child’s education before the age of three is the investment that gets the biggest return: in terms of that child’s achievement and in the benefits to wider society from them being an engaged and successful part of their community.

So I was delighted that from last August 8,400 two-year-olds got a free place in education and childcare. And it rises to 15,000 next August. We still lag England but we are making progress.

Later on in life we need places at colleges and apprenticeships for those who want them.

Colleges have been hit hard in their budgets in recent years.

We need to support colleges.

There have been more than a million extra apprentices across the UK since 2010.

The Scottish Government has maintained high levels in Scotland.

We can do more to foster a demand for apprentices from companies who don’t have them yet.

We should help everyone get on in life by supporting more women into science, maths and engineering.

And Liberals will always want to overcome the remaining barriers that prevent people from ethnic minorities or the LGBT communities from achieving their potential.

We have come a long way from the time when people from those groups were cut out of promotion and shut out of opportunities.

More and more employers see the value in a diverse workforce that reflects those they serve and can draw on the biggest pool of talent available.

Steps such as equal marriage have started to entrench strong liberal values. There is still more to be done.

And a final issue of participation is one that I want to take right up the political agenda - mental health.

It is estimated that one in four of us will experience mental ill health in our lifetimes. 2.3 million people with a mental health condition are out of work and research has identified mental ill health as the primary reason for claiming health related benefits.

And we heard just last week how 11,000 local government workers have been absent from work because of a mental illness.

The human cost is immense. And the economic cost from lost participation is equally large.

Despite this, mental health has for too long been the Cinderella service of our NHS. An increase in awareness of the costs associated with mental ill health has, by and large, not been matched by increased investment in Scottish mental health services.

Just last week I heard from a constituent who told me that her daughter was self-harming but had waited for one year just to see a consultant.  That’s twelve months from referral from the GP.  In those crucial early stages of a mental illness time is critical.

That is why I have joined Nick Clegg to put improving mental health services front and centre of my keynote speeches and priorities.  Today I can announce that, working with my party’s health spokesperson Jim Hume, we will set out on a listening exercise.

I want to hear about the problems faced by charities, by people with mental health problems, by councils and by providers.

I want to hear about those problems so that we can find solutions which help us prevent mental ill health, tackle stigma and support those with mental health problems.

Boosting mental health services will be one of our key future priorities.

All of these things will create in Scotland an expanded, talented, educated, motivated and healthy workforce.

Then, we need to make sure there are the exciting opportunities available to them.

We boost the economy by creating the conditions for business and creating opportunity for everyone using the potential of good education and good health.

Scotland has the comparative and technical advantage in big industries like renewable energy, food and drink and life sciences. We have a high quality tourism offer.

But there are still some big challenges.

One of the biggest is that facing the oil industry. Returning briefly to the theme of last year’s lecture I can say that with the broad shoulders of the United Kingdom government we can be flexible to provide a taxation regime that incentivises industry investment.  We can do that without a dramatic impact on the funding of our schools, hospitals, universities and other public services.

The UK introduced tax allowances in the autumn statement. In addition to the cut in the Supplementary Charge on Corporation Tax there are new allowances for cluster areas, basin wide investment and survey exploration. 

Having discussed the matter with Nick Clegg, Danny Alexander and Alistair Carmichael I can report there is no lack of political will to take the necessary action to support the industry.  

The UK Government is active.  With its broad shoulders it is supporting this important sector.

And for the growth in the rest of the economy we have set out some of the steps we will take:

•   Expanding the British Business Bank so that it performs a more central role in the economy, focusing on long term capital for middle-sized business.

•   Developing the Business Growth Fund to make it work alongside the Business Bank to meet Britain’s shortage of equity capital for growing firms.

•   Supporting innovation through greater public funding on a longer timescale, with a ring-fenced science budget. More ‘Catapult’ innovation and technology centres and a green innovation arm within the Business Bank.

•   Continuing to reform business tax to ensure it stays competitive, making small and medium-sized enterprises the priority for any business tax cuts.

•   Completing the roll-out of high speed broadband, to reach over 99% of the UK.

As I started off by saying, we should lock in macroeconomic stability, including low inflation, and reduce the risks of a return to a volatile economic environment.

Britain needs a stable and competitive environment for growth; this is essential to attract and sustain new businesses and new jobs.

Now with the General Election only months away the choice in the election is clear. 

Examining the economic plans we can see that Labour will borrow too much, risking the economy again.

The Conservatives will cut too much, threatening public services and sacrificing the least well off.

The SNP want independence by the back door risking the economy and public services.

The Liberal Democrats will borrow less than Labour and cut less that the Conservatives. We will balance the budget by 2018, cut taxes for low and middle earners and ensure decent public services, creating opportunity for everyone

And that is a very Liberal Democrat message. And it is only a Liberal Democrat message.

SUPPORT IN THE JOURNEY THROUGH LIFE

So the Liberal Democrat approach at every stage on an individual’s journey through life helps them participate in a strong economy and a fair society where they each have opportunity.

Childcare and early education, focused on the youngest children, is the best route out of poverty, to break the inter-generation poverty that for too long in Britain has meant that if you are born poor you are most likely to die poor as well.

Strong education that equips every individual to achieve their potential.

Skills that pave the way to good job, in dynamic industries of the future and in science, green technologies and manufacturing.

Mental health services that mean the 25% of people who have a mental health problem during their lifetime do not have to sit on the sidelines of society and the economy.

Lower taxes on income to make sure work always pays and that people on low and middle incomes keep more of what they earn.

And personal freedoms, that come from a liberal society, that means the whole of society can benefit from the talents and contributions of every individual.

And I should add, as I promised at the start, that nations, regions and communities will be empowered as never before.

Power should be transferred to rebalance the economy away from London.

Last year I said that every part of the UK should have nimble governments able to build on the strengths of their economy and develop the skills and investment needed.

I announced Campbell 2, tasked to propose a timetable for the transfer of more powers to the Scottish Parliament.

Despite initial opposition to a joint approach from Labour and the Conservatives there was astonishing and rapid progress.

The Liberal Democrats had already set out our plans in Campbell 1.

Last spring Labour and the Conservatives set out their ideas.

The Secretary of State for Scotland agreed to host the different parties once the referendum was completed.

Holyrood leaders signed up in August.

Westminster leaders in September.

All that meant that on the 19th September, Lord Smith could start his work.

It was the Liberal Democrats who set the pace in the negotiations too with our idea to create a Scottish welfare system for the first time.  The Smith Commission published on schedule. All five parties signed up. All five in the one room for the first time to agree our constitutional future.

I spoke to the Deputy Prime Minister this morning in London and can report that the clauses are now due in a fortnight.

You heard it here first.

From Campbell 1 to the Burns Night clauses I am proud of the pace for reform that Liberal Democrats have set.

We have shown the way.

We have persuaded others to join us.

And we have delivered.

CONCLUSION

And I think that perhaps sums up what I have been speaking about this evening.

In government we’ve proved our commitment to building a stronger economy by tackling the budget deficit, helping business create two million jobs, including 168,000 in Scotland, helping create record numbers of new apprenticeships and freezing fuel duty.

In government we’ve proved our commitment to make Britain fairer by cutting income tax by £800 for 24 million low and middle earners; ensuring the biggest ever rise in the state pensions; and giving thousands of 2 year olds free childcare every week.

We have proved in government we stand for fairness by blocking Conservative plans to run schools for profit, allow employees to be fired without cause, and to pay public servants less if they work outside London.

That record of action allows us to set out with confidence our campaign for the future.

Over the next five years the Liberal Democrats in government will balance Britain’s books while raising the income tax threshold, giving workers and pensioners a further £400 tax cut; increase spending on the NHS across the UK which will add to the money available for health in Scotland, with mental health and local services being the top priority; and devolve more power from London to Scotland to rebalance the economy and create a fairer country.

The Liberal Democrats have both the commitment to devolution and the influence at Westminster to ensure Scotland gets the powers we have been promised.

And that is why I have been able to say that only the Liberal Democrats can be trusted with both a strong economy and a fair society giving opportunity for everyone.


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