In full: Ed Balls’ speech at the Labour Party Annual Conference 2012

Conference, we meet here in Manchester, two years on from our

leadership election, a contest held in the shadow of a General

Election defeat.

And we all know what’s supposed to happen when political parties lose

elections: acrimony and division, the party turning in on itself, out

of touch with the views of the country.

Well Conference, two years on, in this generation, we have bucked that

trend. I can’t remember our party ever being so united, so determined

to win back the trust of the people.

And with our economy in recession, and the unfairness and incompetence

of this Tory-led coalition now laid bare, let us show we are the

people to rebuild Britain, strong and fair for the future.

And Conference, making the case for change, setting the agenda - on

reform of our media, and banks, responsibility in our economy from top

to bottom; showing the strength of purpose and moral

conviction which won him the job and which will get him to Downing

Street; Conference, let us pay tribute to my friend, our leader,

Britain’s next Prime Minister, Ed Miliband.

Conference, I am proud to serve in Ed’s Shadow Cabinet - now with more

than 40 per cent women, the first time that has ever happened in

British politics.

And what a contrast to David Cameron’s Cabinet: where the men get the

jobs, the women get the sack and only the chaps get the knighthoods.

Let me ask you this: what does it take to get sacked from David

Cameron’s Cabinet?

Swear at a police officer and call him a ‘pleb’? And you’re defended

to the hilt.

Get caught red-handed texting market sensitive information to News

International? You get promoted.

Flat-line the economy and deliver the most unfair and shambolic Budget

in living memory? And you stay in post - more than that, you’re

allowed to do it part-time.

Do all those things and David Cameron will let you keep your job. But

not if you’re a woman.

Conference, what kind of Prime Minister thinks it’s fair to sack a 54

year old woman from his Cabinet because she’s ‘too old’ - and then

give the job to a 56 year old man instead?

Let me tell you: a Prime Minister who only appoints five women in the

first place, sacks three of them, demotes the other two - and then

attacks the Labour leadership for not being ‘butch’ enough.

Butch? Butch? Whatever did he mean? And if David Cameron is butch,

where does that leave George Osborne?

Perhaps this is why George Osborne will never be sacked. A Prime

Minister and a Chancellor destined to go down fighting together. And

this time, let’s see them riding off into the sun-set. Butch

Cameron and the flat-line kid.

And Conference, doesn’t it feel good to be back here in Manchester?

Or, should I say, to be back here in Labour Manchester: four Labour

MPs, three world class universities, two world-beating football teams,

one Labour Council. And not a single Tory Councillor in this

whole city - not a single one.

Let us pledge today to keep it that way, and elect the brilliant Lucy

Powell as Manchester’s first ever Labour woman MP.

And let me say too, I can think of no-one better to be Manchester’s

first ever Police and Crime Commissioner than the wise and highly

respected Tony Lloyd.

And Conference, at a time of such tragedy for policing in this city,

our whole country remembers two brave officers who lost their lives

doing their duty, and we pay tribute to all those public

servants up and down the country - police officers, fire-fighters, our

armed forces - who every day put their lives on the line to keep us

safe.

And Conference, as we rightly praise the success of London 2012, let’s

not forget it was Manchester’s hosting of the 2002 Commonwealth Games

which showed the way, proving that Britain was ready to

stage the biggest international sporting events.

So Conference, we salute Graham Stringer and Sir Richard Leese as we

salute all those people who brought the Olympics to London, and made

them such a success - Tony Blair and Prince William, Ken

Livingstone and Gordon Brown, Lord Coe and Boris Johnson, too many

others to mention.

But let us remember that none of them would have been able to play

their part if not for the one person who made it all possible.

Conference, please join me in thanking Dame Tessa Jowell.

Conference, it was Tessa’s officials who told her it would be a

disaster to bid for the 2012 Games. It would cost too much, the

stadiums would never be ready, London’s transport wouldn’t cope,

the security would be a nightmare.

Tessa could have listened to all those concerns, but she didn’t. She

persevered. We won the bid. And the rest is now part of our national

history.

And Conference, this is the lesson we all should learn. With wise

leadership and long-term vision and a strong partnership between

government and citizens, business, trade unions and the voluntary

sector, we can do great things, we can lead the rest of the world and

we can rebuild Britain for the future.

But if you listen to the doubters, if you never take a risk, if you

flinch when obstacles are in the way, you will never get anything

done.

And if you spend your whole time fighting short-term political battles

- Dave versus Boris, Boris versus George, George versus Vince - you

will never rise to the long-term needs of the country. And in

the end, you let people down and lose their trust.

And nowhere is that more obvious than in our economy today.

Thank goodness the Olympics has given us a short-term shot in the arm,

that might just be enough to take us out of recession this quarter.

But that is no substitute for a long-term strategy. Not when families

are struggling to make ends meet. Not when food and fuel prices are

going up, but wages are frozen and tax credits cut.

Not when so many young people have been unable to find work or stay-on

in education. Not when so many small businesses are struggling to

raise finance so they can survive until the year-end.

Not when so many working people in the private sector and public

sectors are worried about their jobs and their pensions - the human

cost of this economic failure.

Remember what David Cameron, and George Osborne and Nick Clegg

promised: that faster tax rises and deeper spending cuts would secure

the recovery and make Britain a safe haven; that theirs was the

only credible plan to deal with the national debt; and that we were

all in this together.

Conference, the recovery secured? We’re just one of only two G20

countries in recession - the longest double-dip recession since the

Second World War.

A credible plan to deal with our debts? Because we are in recession,

the deficit is now not going down, it’s going up - up by 22 per cent

so far this year. Rising borrowing not to invest in the

jobs of the future but to pay for the mounting costs of this

government’s economic failure.

Conference, there is nothing credible about a plan that leads to: a

double-dip recession, thousands of businesses bust, a million young

people out of work, billions wasted on a soaring benefits bill,

and borrowing going up not down. That’s not credible, that is just plain wrong.

And as for ‘we’re all in this together’, we don’t hear that line anymore.

Not from a Chancellor who presented the most unfair and unpopular

Budget in a generation. A Chancellor who tried to raise taxes on

pasties, caravans, churches and charities, but who refuses to look

seriously at proposals for a mansion tax.

A Chancellor who in six months’ time will raise taxes for pensioners

on the very same day he cuts the top rate of tax for the very richest

- a £3 billion tax cut, giving £40,000 a year to a

millionaire.

Conference, what kind of government asks millions of pensioners to pay

for a tax cut for millionaires?

What kind of government believes low-paid women will only work harder

if you take away their tax credits and make them worse off, but

millionaires will only work harder if you give them a tax cut to

make them better off?

Conference, isn’t this the truth, we know what kind of government this

is: failing on the economy, failing on the deficit, hitting the many

to help a privileged few. Arrogant, complacent, out of

touch.

Conference, it’s the same old Tory government. David Cameron, George

Osborne, Nick Clegg. The same old Tories, every one of them.

But you know what the worst thing is? For two years they’ve told us

all this pain will be worth it in the end, that it’ll be short-term

pain for long-term gain.

But what we are now seeing is short-term pain already doing long-term damage.

Look at the facts: over 33,000 companies already gone bust since the

General Election; investment plans cancelled - or diverted overseas;

our economy weaker, capacity lost, more prone to

inflationary pressures when the recovery finally comes; child poverty

rising, and long-term youth unemployment becoming entrenched,

damaging them for the rest of their lives.

And Conference, if we carry on like this - a divided coalition,

muddling through, no vision, waiting for something to turn up - the

danger is that two lost years becomes three and four and that we

slip into a lost decade of slow growth, high unemployment and stagnation.

Lost investment, lost output, lost jobs, lost exports, lost tax

revenues - a decade when we fail to make the investments and the

reforms we need to make our economy stronger and fairer for the

future.

And Conference, it doesn’t have to be this way.

While Britain has been stalled over the past two years, other

countries have been forging ahead. Last year private investment in

Germany rose by over seven per cent. One million extra students

enrolled in university in America. China is building 80,000 miles of

roads a year and is now planning 70 new airports.

And here in Britain? Private investment? Down over 2 per cent last year.

More students? No, over 50,000 fewer.

And not one of the road projects David Cameron announced last year

even started in construction.

And when you look at this picture of stagnation and inaction in our

economy, it’s no wonder the deficit is now rising.

We warned two years ago that drastic spending cuts and early tax rises

- too far, too fast - risked choking off the recovery and making a

difficult situation worse. We warned that you either learn the

lessons of history or you repeat the mistakes of history.

Because this is the fundamental truth: if more people are on the dole,

not paying taxes, you can’t get the deficit down. If businesses are

going bust, not hiring new workers, you can’t get the

deficit down. If the economy’s not growing, you can’t get the deficit down.

And that is why we must act now to kick-start the recovery, tackle the

causes of rising borrowing and start to make our economy stronger for

the future.

A year ago, we set out five actions the government should take - then

and now - to boost growth:

Tax bankers’ bonuses and build 25,000 social homes for rent and

guarantee a job for 100,000 young people.

Genuinely bring forward long-term investment in infrastructure.

Temporarily reverse the damaging VAT rise.

Give every small firm taking on extra workers a one year national

insurance tax break.

And cut VAT to 5 per cent for a year on home improvements and repairs.

But Conference, since last year David Cameron’s government has done

next to nothing.

Their economic plan is failing - and they don’t know what to do. Plan

A, Plan B, Plan A plus - with this government, I just don’t see any

plan at all.

Conference, one year on, the need to kick-start the economy is even more urgent.

So we must go further. With 119,000 construction jobs lost in two

years and a 68 per cent fall in the number of affordable homes being

built, we need bold and urgent action now.

So with Hilary Benn and Jack Dromey, this is what I propose. The

Government is anticipating a windfall of up to £4bn from the sale of

the 4G mobile phone spectrum.

In the good times, Labour used every penny of the £22bn from the sale

of the 3G licenses to pay off national debt. But in difficult times,

we urgently need to put something back into the economy.

So with this one-off windfall from the sale of the 4G spectrum, let’s

cut through this Government’s dither and rhetoric and actually do

something. Not more talk, but action right now.

Let’s use that money from the 4G sale and build over the next two

years: 100,000 new homes - affordable homes to rent and to buy -

creating hundreds of thousands of jobs and getting our

construction industry moving again. Add to that a stamp duty holiday

for first time buyers buying homes up to £250,000 and we can deliver

real help for people aspiring to get on the property ladder.

Conference, a clear and costed plan to kick-start the economy and get

people back to work. Building the homes that we need now and for the

long-term. Building our way out of recession and re-building

Britain for the future.

And we also need reform to boost long-term investment and skills - the

only routes to rising living standards for working families.

Chuka is right to say we need a modern industrial policy to support

long-term wealth creation, with strategic support for our advanced

manufacturing and service industries.

And we need to work and campaign together to tackle tax avoidance, end

bogus self-employment, prevent a race to the bottom through regional

pay; and enforce the minimum wage, help parents balance work

and family life and make sure our labour market is genuinely flexible

and fair to working people, and let’s go further and promote the

living wage.

And we know too our banking system needs cultural change and radical

reform - reform which this Government is only interested in watering

down.

That is why Ed Miliband and I are clear, we do need:

A full, open and independent public inquiry into the culture and

practices of our banking system.

Radical reform to separate retail and investment banking.

Active support for mutuals and co-operatives.

A continued campaign for an international financial transactions tax.

And a proper British Investment Bank - fully backed by the Treasury.

And Conference, let me say this about the hundreds of thousands of

working people, earning ordinary salaries, who work hard every day

behind the counters of our high street banks.

They were as shocked and dismayed as everyone else at the gross

irresponsibility and greed of a few millionaire bankers at the top who

caused such damage and gave their industry a bad name. Working

people who want tougher regulation, who want banks to work for the

long-term interests of our economy, and who do not deserve to be

pilloried for their hard work and service.

Conference, the financial crisis did expose deep-rooted problems in

our economy.

After the global financial crash, it was always going to be difficult

to get the deficit down. And even if we do get the economy growing

again, even if we do reform our banking system for the future,

we’re still going to face tough choices in the years ahead.

But the longer this Government staggers on with a failing economic

plan, the worse it will get and the harder the job will be. Hard times

will last longer than all of us hoped. And we cannot promise

to put everything right straight away.

That is why, however difficult this may be, when we don’t know what we

will inherit, we cannot make any commitments now that the next Labour

government will be able to reverse particular tax rises

or spending cuts. Because, unlike Nick Clegg, we will not make

promises we cannot keep.

Of course we’ll make different choices - we’ll do things in a fairer

and more balanced way and put jobs and growth first.

But Conference, as I said to the TUC, we must be upfront with the

British people that under Labour there would have been cuts and that -

on spending, pay and pensions - there will be difficult

decisions in the future from which we will not flinch.

Before the next election - when we know the circumstances we will face

- we will set out for our manifesto tough new fiscal rules to get our

country’s current budget back to balance and national

debt on a downward path.

Not a meaningless fiscal rule like George Osborne’s - a promise to

balance the books in five years time, with that five year period

moving forward every single year.

Conference, our fiscal rules will be monitored, independently, by the

Office for Budget Responsibility, and we will take the action required

to meet them. And when we sell off the Government’s

shares in the banks every penny will go to repay the national debt.

Conference, fiscal responsibility in the national interest.

And because we all know there can be no post-election spending spree,

in our first year in government we will hold a zero-based spending

review that will look at every pound spent by government:

carefully looking at what the Government can and cannot afford,

rooting out waste and boosting productivity, building on the work that

Rachel Reeves and Jon Trickett are leading.

But we will do things differently to this Government. Not slashing

budgets without a care in the world - damaging the economy, hitting

women harder than men - but assessing every pound of

taxpayer’s money including for its impact on growth and fairness.

Not opting for short-term cuts that look ‘easy’ but which end up

costing more in the long-term - like deep cuts to youth services, to

adult mental health services and to public health.

And not ducking the hard long-term issues we know we haven’t properly

faced up to and which transcend parties and parliaments and where we

badly need a cross-party consensus. So let us get a

long-term plan to support the most vulnerable in our society -

looked-after children and adults needing social care.

Because this is not just about policy, but about the kind of country

we want to be and the way we do our politics.

Where we face important long-term challenges, we must seek a consensus

that puts short-term politics aside and puts the national interest

first, just as we did over a decade ago when we made the Bank

of England independent.

And nowhere is such a consensus more essential than on our national

infrastructure.

The lesson of the Olympics is that if we approach major long-term

infrastructure projects by building a cross-party sense of national

purpose then we can deliver.

And yet, it took 13 years from the opening of the Channel Tunnel to

complete the High Speed Rail link to London. Crossrail was delayed for

decades.

And why is this so often the case? Yes, our cumbersome planning

system. Yes, legitimate concerns for the environment. Too often in the

past, governments have assumed that vital public infrastructure

can only be funded by public investment - and then baulked at the bill.

But, above all, successive governments - including our own - have

ducked or delayed vital decisions on our national infrastructure,

allowing short-term politics to come first.

And just look at this government: will Boris or Dave win on Heathrow?

Will Conservative MPs block High Speed rail? Will George see off Zac

on renewable energy?

What a ridiculous way to run the country. No wonder business is fast

losing confidence in this government’s ability to make long-term

decisions.

But Conference, it is not just a problem of this government or this

parliament - and we have to be the party to break this cycle.

Because if we don’t, if we put off major decisions for another

generation, it will be our children and grand-children who will face

the consequences.

Let me give you some examples. We must decide how and when we are

going to deliver super-fast broadband across the whole of the UK and

avoid a two-tier Britain.

We must decide whether we need to replace our antiquated National

Grid, or risk more power cuts in the future. We must decide as a

country on a clear plan to invest in nuclear power, wind and tidal

power and other renewables so we can lead the world in delivering

clean, de-carbonised energy and green jobs.

We must decide how we are going to protect our country from rising sea

levels and exceptional rainfall, including whether we need to replace

or reinforce the Thames Barrier to prevent London from

flooding.

And we must decide, alongside vital decisions on rail and airport

capacity, how we are going to get more freight off the roads and onto

the railways - it won’t help that our grand-children are all

driving electric cars if they are still sat in gridlock on the M6 or the M25.

On all these issues, if we don’t start to plan now, what will we say

in 30 years’ time when our children ask: ‘why didn’t you act when

there was still time?’

That is why we need a comprehensive long-term plan to rebuild

Britain’s infrastructure for the 21st century, and a cross-party

consensus to deliver it.

And it is why, too, at a time when Government budgets are tight, we

must think innovatively about how we can finance these vital projects

over the coming decades, drawing on the private sector and

long-term pension savings.

So Ed Miliband and I have asked Sir John Armitt, the chair of the

Olympic Delivery Authority, to consider how long-term infrastructure

decision-making, planning, delivery and finance can be radically

improved.

And I can announce today that Sir John has agreed to lead this work

and to draw up plans for a commission or process, independent of

government, that can assess and make proposals on the long term

infrastructure needs of our country over the coming decades and help

build that consensus.

Not repeating the mistakes of the past, but learning from them.

Building a consensus which crosses party lines, without chopping and

changing one parliament to the next. A consensus to re-build

Britain for the future.

And Conference, there is another lesson we must learn from our history.

Many people have said over recent weeks: ‘this has been Britain’s

greatest ever summer’.

But let me remind you of an even greater summer still: the summer of

1945 - the end of six hard years of war - when our nation welcomed its

heroes home from the battlefields of Europe, Asia and

the Atlantic, and celebrated together the defeat of fascism.

Conference, our predecessors were elected that year to rebuild a

country ravaged by conflict.

They faced even greater challenges than we face today: an economy

enfeebled by war; a national debt double the size of ours today. And

they made tough and unpopular decisions: to continue with

rationing; to cut defence spending; and to introduce prescription charges.

But that Labour Cabinet also remained focussed on the long-term task

ahead. And they learned from history and rejected the failed austerity

of the 1930s.

And that meant they could put in place long-term reforms, enduring

achievements, vital to our country’s future: the Beveridge report; new

homes for heroes; the school leaving age raised; and, for

the first time ever, a National Health Service free to all, based on

need not ability to pay - over 60 years later, celebrated in our

Olympics opening ceremony for all the world to see, still today

the greatest health service in the world.

Conference, they were very different times. But it is our task to

recapture the spirit and values and national purpose of that time.

Just think of the people in whose footsteps we now follow. Working men

and women who, in the years before, had see a hardship many of us will

never experience.

But their suffering did not teach them selfishness, it taught them

solidarity. And they never settled for second best in the struggle for

education for all, free health care and proper rights at work.

Conference, we owe it to them - but more than that, we owe it to our

children and their children to come - to learn from that example, to

make the tough decisions but not to sacrifice their

futures.

Because when our grandchildren look back at us, what will they say?

Will they say we cast a generation of young people on the scrapheap of

unemployment?

Will they say we dismantled the NHS and made it harder to go to university?

Will they say we plunged Britain into a decade of economic stagnation

while other countries raced ahead? Will they say we left Britain less

prosperous, more unequal, more unfair?

Or will they say - even as we made tough and painful decisions - that

ours was the generation that got a record number of young people into

apprenticeships as well as university.

Ours was the generation that safeguarded the NHS, and started the

rebuilding of our national infrastructure.

Ours was the generation that tackled our debts by growing and

reforming our economy - and making sure the banking crisis that caused

those debts could never happen again.

Ours was the generation that broke from the cycle of political

short-termism and started to rebuild Britain anew in the long term

national interest.

So let us go forward. Not flinching from tough decisions. Giving our

young people hope. Rebuilding Britain for the future.

That is our challenge. That is our mission. Let us rise to it together.

Thank you.