Deputy Prime Minister
This document that we are launching today is unique. It is a programme for five years of partnership government. Even if you have read a hundred party manifestos, you have never read a document like this one. A joint programme for government based on shared ambition and shared goals. Compromises have, of course, been made on both sides, but those compromises have strengthened, not weakened, the final result.
From different traditions we have come together to forge a single programme for a united government, drawing on the strengths and traditions of both of our parties.
Just flick through the pages. This is a programme for fundamental and comprehensive reform that will transform our country for the better. We want this coalition to be defined by three words: freedom, fairness and responsibility.
Freedom: because we believe that the freer you are, the more you can achieve. People should be free to make their own choices, and fulfil their own potential, not be held back or held down by an over-mighty state. We will disperse power and restore freedom, and so build a stronger society where people are once again trusted to take control of their own lives.
Fairness: because we believe a fair society is one where everyone has the opportunities they need to live the life they want. We will ensure that every child gets a fair start in life and that no one is held back by the circumstances of their birth, and anyone who struggles or stumbles is given a helping hand.
And responsibility: because we believe a strong, united society is only possible when people take responsibility for their own choices, and make the effort to support one another. We will ensure that those who work hard and strive to do well will see the fruits of their labours, and those who take responsibility for themselves and their communities get the support they deserve.
But today, it isn’t just about ideas. Today is about action. This document sets out page by page, line by line, detailed ideas for changes that will make your life better. From now on, we get down to work.
What does that mean for you? If you are running a business, it means the banks will start lending to you again on fair terms. Unnecessary red tape will be cut back and government will play its role to promote the new industries, the new economy of the future. If you are a teacher, it means that government will stop interfering in what you do in the classroom, and will start giving you the money and the freedom you need so that all the children in your school can thrive. If you live in a rural community, it means more affordable homes for local people in empty farm buildings and on community land. It makes a fair deal from the supermarkets for farmers so your community can thrive.
If you are a pensioner, struggling to make ends meet, it means your pension will rise in line with earnings again starting next April. If you are out of work, it means help to find a job, but penalties if you refuse. If you are a police officer, it means less time in the police station and more time catching criminals. If you are a soldier, it means getting all the support you deserve on the front line. If you are a mother or a father, it means you will be able to share your paternity and maternity leave, and share the joys and challenges of parenting more equally.
And you’ll get more control over how new homes and developments are built in your area, the right to register with any GP you want, a freeze in your council tax if your council participates in our scheme, a comprehensive plan so you know we really will do all we can to tackle climate change.
These are practical changes you will see in your everyday life, because for me new politics isn’t just a theory. It is not something I want for the sake of it. New politics is about delivering the change you want. We will reform politics from top to toe. The job of reforming the House of Lords, begun nearly a hundred years ago, will be finally completed. Party funding and lobbying will be cleaned up. You will get a referendum on the voting system, so you have a greater say on who represents you in Parliament. Government will be transparent. You will be able to get your hands on all the information you need. You will be able to sack MPs who abuse the rules and we will pass a Freedom Bill to restore and protect your liberties.
Of course, these are difficult economic times. The challenge of restoring the public finances to health is both enormous and vital. As a government, we are united in saying that tackling the deficit is our first priority. Not because we relish cuts - far from it - but because, without sound finances, none of our ambitious programme for change and renewal will be possible. All parts of government now have the challenge of a lifetime to find savings so we can stop mortgaging the future of our children with unsustainable debts.
So let’s be clear. Those spending proposals, set out in our initial coalition agreement, are our first priority for any new money. Fairer taxes, real-terms increases for the NHS, restoring the earnings link in pensions, the pupil premium, meeting our commitments on international aid: any other new spending proposals in this programme will be delivered only as and when resources allow.
Money may be short, but that does not mean our ambition is small. We understand that there is so much more to government than simply spending money. There is so much we can change, so much we can achieve, if we think differently, challenge assumptions, and for once, think about the ‘what’ and the ‘how’ of government, not just the ‘how much’. That is what this coalition government will do.
Five years of radical reforming government, a stronger society, a sound economy, an accountable state, and power and responsibility in the hands of every citizen. This joint programme is the first step on that road. It is a road we look forward to travelling together. Thank you. I would now like to introduce the Home Secretary.
As the Deputy Prime Minister has said, our coalition is united behind three key principles. And the first of those is freedom. We believe that a strong country needs strong citizens, free to make their own choices, not limited and hemmed in by state control. Now this might sound like stating the obvious, or the irrelevant. In a modern, open, democratic society such as Britain, we can take our liberty for granted; but if there is a lesson from our history, it is that freedom is never won.
Each generation, those of us who believe in freedom, in human potential, in the idea that the strength of our society comes from the energy and industry and creativity of our people, must make the case for freedom and fight for it over and over again. And that is certainly true in our country today. Over the past decade, we have seen the balance of power tip dramatically away from the individual and towards the state. The argument for more state power is that it is necessary for our safety, but the irony is that much of this authoritarianism has been ineffective, failing to guarantee our security, even sometimes endangering it, while at the same time undermining our fundamental rights.
So this coalition will be different. We will be hard-nosed defenders of our security and our freedoms. So yes, we will never compromise the security of our citizens, and we will do all that we can to protect them from every threat to their safety, be it terrorism or crime on their streets. But we will also restore civil liberties where they have been lost, and protect them where they still exist. Abolishing ID cards, stopping the powers people have to enter your home, bringing in rigorous regulation of CCTV, outlawing the fingerprinting of children at school, removing the ludicrous offences that have been created in the past decade.
But rebalancing the relationship between the state and the individual means more than just limiting the powers of the state. It means giving more control to people. This is the most radical programme of decentralisation this country has ever seen; from Whitehall to the Town Hall, from the central to the local, from bureaucrats to patients, parents and pupils, this coalition will disperse power and restore freedom, because we believe liberty builds bigger people, able to do more, change more, and achieve more.
And it’s now my pleasure to ask the Business Secretary, Vince Cable to speak.
The second principle of the coalition is fairness, and without agreement on that, on the concept of fairness, the coalition would never have happened. We defined fairness as being a society where protect the weakest, the most vulnerable and where everybody has the opportunity to fulfil their potential.
The principle of fairness is even more important in difficult times than in good times. These are difficult times and we have this priority - to deal with the budget deficit. And I just want to make it absolutely clear that I fully support the efforts of the Chancellor of the Exchequer, George Osborne, to deal with this problem urgently, because the problem of the financial crisis in Europe over the last few weeks has underlined the absolute priority for establishing confidence in the country. But the success of the government won’t simply be measured by whether we deal with the budget deficit, but how we deal with it. And the programme of government makes it clear what our approach will be. And the approach is that the burdens have got to be fairly shared - and in the difficult times ahead, we won’t balance the books on the backs of the poorest.
The coalition is also about more than the short term rescue of the economy. It is about stability, it is about government for the long term, changes that will last, and so we will put the principle of fairness at the heart of the economy in the long term. It will drive tax policy, because our aim is fairer, not higher, taxes. And that’s why we’ve said we will increase the personal allowance for income tax to help lower and middle earners, lifting low earners out of tax, giving people an incentive to work, and we will increase the personal allowance to £10,000, making real-term steps towards meeting this policy objective. We will prioritise this over other tax cuts.
We will also put fairness at the heart of our reforms of the banking system. The banks that have been rescued or underwritten by the taxpayer must be treated as the servants, not the masters, of the economy. We will reform the banking system, ensure that banks support business and economic growth, through improved access to finance, and we’ll also put fairness at the heart of our education system. A good education is one that gives every child a fair start in life, making sure no one is held back by the circumstances of their birth. We will reform the school system to tackle widening education inequality and give greater power to parents and pupils to choose a good school. Our pupil premium will allow schools with the most disadvantaged pupils to deliver what private school pupils already take for granted - in other words, small class sizes, the best facilities, and resources to attract the best staff.
This coalition is a genuine partnership based on progress and reform, and a new era of politics will be underpinned by fairness. Thank you. I’ll hand over to the Chancellor.
Chancellor of the Exchequer
Thank you very much, Vince. The third principle that unites the work of this coalition is responsibility. And responsibility is easy to understand but difficult to define. Put simply, it is doing the right thing even when that is difficult: understanding your obligations, not just to yourself, but to those around you, to those you have never met, even to those who have not yet been born. But this value has been steadily eroded from our national life over decades. Spool back to the source of so many of the great problems we face as a country today, and they come back to a lack of responsibility. Our enormous debts, our massive welfare rolls, our deteriorating environment: at the root of these problems may be one person, a collection of people, or even a whole culture, saying, ‘Let’s do what we want, instead of what is right’.
So this coalition will put everything it does through this simple test: if it encourages responsibility we should do it; if it encourages irresponsibility, we shouldn’t. We must start with government. We will bring responsibility to our public finances, saving £6 billion this year. And on Monday, we will be making further announcements about that.
This might not always be the easy thing to do, but it is right. We need to show the world that Britain can tackle its debts and live within its means if we are to sustain the recovery. We will bring responsibility to rebuilding our economy, not taking the easy route of pumping the bubble back up, repeating the mistakes of the past decade, building another unsustainable boom, but creating a new economic model, where we save and invest for the future instead of building an economy on debt. And we will invest in the jobs and industries of the future; industries such as that will not just produce wealth for our country, but will protect our planet too. We will bring responsibility to our society, radically reforming the welfare system.
We will do the difficult thing; the hard thing, the thing that no government has managed to do, and break the culture of welfare dependency that is wasting so many lives and so much money by saying to those who can work, ‘You should work’, and to those who can’t work, ‘We will always look after you’. Bringing the value of responsibility back to the heart of our national life will not be a simple or short-term task, but this coalition government will play its part, by getting behind those people who want to do the right thing, and always doing the right thing ourselves, however difficult that may be.
I’d now like to hand over to the Prime Minister.
Thank you, Chancellor, and good morning, everybody. Since becoming Prime Minister just over a week ago, I have been trying to answer that great question in politics, which is, ‘Where does power lie?’ I’ve had a good look around Number 10 Downing Street, I’ve even wandered into the Cabinet Office, I’ve found the Deputy Prime Minister’s office, I even went yesterday to the meeting of the permanent secretaries in Whitehall, and today, I finally made it to the Treasury courtesy of George.
But the truth is power lies in clarity about what you want to do, and in determination about seeing it through. That is what this document, that is what this coalition agreement, that is what this programme, that is what this morning is all about. And the events of the last two weeks have been extraordinary. The first hung Parliament in over three decades, Conservatives in government for the first time in thirteen years, the first coalition government in over 65 years, the first Deputy Prime Minister from another party since the Second World War.
Along the way, the circumstances that we have been finding ourselves in are not ones that I’d originally planned for. But I have approached each twist and turn and fork in the road with two things in mind. First, an optimism about what we can achieve, but second, a gritty realism about what we should do. For me, politics is about public service in the national interest. That is the aim, that is the goal: that is what I went into politics to achieve. I’ve done what I’ve done because I thought it was the right thing to do.
Given the massive challenges this country faces, particularly the deficit, the national interest was not served by a minority government limping along. It was served by strong, stable, decisive government that could really act in the long-term interests of our country. But the more I see of this coalition in action, the more I see its potential. Not just in solving the problems that lie before us, but solving them with a shared set of values. Not just in working together day to day as governments have to do, but in changing our country for years to come. Not just in providing the strong, stable government I spoke about, but in being a genuinely radical reforming government.
And that is evidenced, I believe, by the document we are publishing today. It is a full programme of reform for a full Parliament by a partnership government. In its pages are plans for a new green economy, where we set enterprise free, for fairer taxes, for open and accountable government, for radical school reform and for building the Big Society. Next week, in our first Queen’s Speech, these transformative ideas will start moving from the pages of the document onto the statute book, beginning the work of change.
I think this document is significant. This coalition government has produced, in a rather short period of time, an extensive and detailed reform agenda. There is a reason why this has been possible. Yes, it is because the urgency of the hour required compromise and negotiation. Yes, it is because we had politicians on both sides who were willing to put aside party interests in favour of the national interest, but also because the more we talked, the more we listened, the more we realised that our visions for this country and the values that inspired them are strengthened and enhanced by the act of the two parties coming together.
Of course, we cannot stand here and say this process has been an effortless fusion of our two manifestos. There has been negotiation. Some policies have been lost on both sides. Some have been changed and we have had to find ways to deal with the issues where we profoundly disagree. I want to be completely frank about that. I do not want to disappoint people later. I want to be clear now. To the millions of people who voted Conservative at the last general election, the good news is that we will deliver our promises on the jobs tax, on a referendum lock on Europe, on a cap on immigration, on radical school reform, on welfare reform, and much more besides. However, the bad news is that some policies have been changed. To me, though, aside from the good news and bad news, the real news is that Britain has something that all Conservatives believe in profoundly, which is strong and stable government in the national interest to do the right thing.
For me, the most important value underpinning this programme is the value of responsibility. On the steps of Downing Street, I said I wanted to help build a more responsible society, a Big Society: one where we do not just ask what our entitlements are, but what our responsibilities are; one where we do not just ask what we are owed, but what more we can give. A guide for that society is that those who can, should, and those who cannot, we always help.
You can see how the value of responsibility is woven through this policy programme. It is there in our plans to reform welfare. We will say to those who can work that you should work. If you do not and refuse a good job offer, your benefits will be cut. It is there in our plans to strengthen families. As we make savings from our welfare reforms, we will start to phase out the couples’ penalty in the tax credit system that pays couples to live apart, which for years has sent out a completely crazy signal about what is responsible and what is not. It is there in our plans to cut crime. We are going to score a thick line between right and wrong though every community with our plans of real reform of our criminal justice system. The value of responsibility is there in our plans to limit immigration, because controlling our borders is the right thing to do by the people of this country.
Creating a responsible society has always been my mission in politics and that has not changed. For the most part, there has not been disagreement or compromise. We have found many areas where there was complete agreement in both mission and method. One of those areas is rebalancing the powers held by the state and the individual. Both our parties think the state has become too big for its boots. Together, we will dismantle the architecture of state interference with our new Freedom Bill. The Home Secretary has spoken about how we will do that, with particular emphasis on protecting our civil liberties. This programme shows how we intend to go much further than that, cutting the number of quangos, opening up the whole process of government, what it does, how it spends your money, pushing power out to families, communities and individuals. This new government will tear down the big, bossy, bureaucratic, unaccountable state and replace it with one that answers to you.
There are other areas where, instead of just adopting those policies that previously overlapped, we have tried to combine our parties’ best ideas and attitudes to create something that is greater than the sum of our two manifestos. Take our plans for the NHS. We have taken Conservative thinking on markets, choice and competition and brought it together with the Liberal Democrat belief in advancing democracy to a much more local level to create a more radical reform agenda than the one that either of us had before. We are going to have GPs with authority over commissioning, patients with much more control, and elections for your local Primary Care Trust. The Liberal Democrat-Conservative plan for the NHS is, therefore, more bold, radical and decentralising than either of us had planned for, and I want that to be a major part of the story of our coalition.
Let me end by saying this: I am a Conservative Prime Minister leading a coalition. Nick is a Liberal Democrat Deputy Prime Minister helping to drive this coalition forward. We will always be clear about that. From its inception, this coalition has been about cooperation and engagement. It has been animated by a spirit of openness. It has been driven forward by shared values and a shared purpose.
Now, we want to open this process out to the whole of our country. We want you to be involved, reclaim your democracy, have your say. This document and the programme for government contained within it will now enter a period of public scrutiny, consultation and comment. You will be able to guide its mission, policies and priorities. Next week, in the Queen’s Speech, we will be announcing plans for a new public reading stage of all bills, so that you can help shape and form them. As Nick explained in his speech yesterday, we also want people to play a full part in developing our Freedom Bill, suggesting regulations that can go, laws that should be discarded and incursions of state power that should be rolled back.
This coalition, I believe, has the potential to be a great reforming government, united behind the three principles of freedom, fairness and responsibility, but above all, united in the purpose of bringing strong, stable, decisive government to our country. Thank you for coming this morning. Thank you for listening. We are happy to take questions.
Prime Minister, thank you. Is there not a problem emerging with this coalition already, which is you, the Prime Minister, and the Deputy Prime Minister look happier with each other than you are with either of your own political parties and they are beginning to notice? If I may add one point, is there not another problem, which is, governments are not defined by documents like this? They are defined by events. Take the crisis in the eurozone. He would want Europe to integrate. You would want to block it at all costs. How are you going to make up your minds?
Let us take the second question first. Clearly, you are right that governments are defined by events and how you respond to them. For that, you need two things. You need to have a programme that sets out what you want to achieve and the way in which you want to achieve it, because that helps you. One of the aspects so important about this document is to have a guide for what you want to do, because it helps you in how you respond. The second factor is that you need good relations at the heart of government and also good processes to make those relations work. While Nick and I agree about a new politics, there is one part of something rather old politics that I want to bring back, which is having good, effective government that works through proper processes, sitting around a table, rather than hunched on a sofa. Bringing back some of those processes and the good relations you can already see building up between ministers will help deliver the sort of quietly effective government that I aspire to lead.
In terms of our parties, I do not accept what you say. I sense in the Conservative Party that there is a real enthusiasm for the fact we have the strong, stable government that we want to deliver. Of course, people will be disappointed that some policies have had to be discarded as a coalition comes together. However, what I find is, just as I feel as a very pragmatic politician, that the more we work together, the more I can see it is not just about day-to-day events, but a shared vision, so other colleagues are beginning to see that too. Also, in a very practical way, what would a government be able to achieve in a minority or even in a small majority, compared with what we can achieve with a decent majority? People are beginning to see that as well. Of course, it is going to take a different way of managing both our parties, I suspect, in terms of taking them with us. That is already evidenced by the number of meetings I have held. Of course it will take that. It will take that, but it is well worth it, and the more people see the coalition working, the more people will see it is the right thing to do.
We notice that the 31 chapter headings in here are in alphabetical order, but it just so happens that banking is the first one. There is an immediate problem with banking and there is a general consensus that banks are not lending enough to small businesses. Yet, you have decided to set up a commission on the issue of separating out the investment and retail branch arms of banks, which could take up to a year to report. There seems to be a constant theme throughout the document, for example, on long-term social care and disability, another commission. There are an awful lot of commissions in here. I wonder why that is.
I’ll ask George to answer first and maybe Vince will want to say something on banks, but let me just - it is a separate issue. Getting banks lending is about net lending agreements and about actually getting the money out of the banks into business. That is separate from the important question of what you actually do about the structure of banks, where I think there’s much more agreement than many people would have thought.
George and then Vince.
Chancellor of the Exchequer
To pick up on the point you made, there is an urgent priority, which is to get lending going to small and medium-sized businesses and I think all of us had the experience in the general election of every single day virtually going to a small and medium-sized business as part of the campaign trail and wherever you were in the country hearing basically the same problem. And Vince and I are agreed that that is an absolute urgent priority. Now, we both had different ideas about how to do that: the Liberal Democrats talked about net lending for the nationalised banks; we had a loan guarantee scheme. We might do both, we might do one or the other, but we are agreed we’re going to sit down and work out which one works and gets the money into the economy.
There is a separate issue then on the structure of banking going forward and the relationship between retail banking and investment banking. I think this is a really interesting and challenging problem for the United Kingdom. We have a very large financial services sector, it employs a lot of people, it’s a very important industry for us, but it’s also clearly done a lot of damage to the British economy. There’s a real debate with a lot of intellectual effort required to discuss this relationship between retail and investment banking. And setting up a high-powered commission that will report in pretty short order, given the scale of the issues and the complexity of the issues it needs to investigate, setting that up and allowing the different views held by all sorts of different people - some people on the right passionately in favour of splitting the banking, some people on the left passionately against it - but bringing it together in this way I think shows a grown-up approach that allows these arguments to be aired and then decided upon rather than simply dismissed.
I think the Prime Minister’s already made the key point that the two issues of net lending and the structure are separate issues. The net lending issue is very urgent, because there is clear analysis now from the Bank of England and elsewhere - not just anecdote - that the demand is rising as we get recovery, the supply of funds is not coming forward and we’re going to have to act urgently and decisively to deal with that.
Just to return to this idea that there are a lot of commissions in this document, there’s another one about the bill of rights, for instance, it does rather look as if each time you hit a problem you have a commission, you push the decision off. Are you not just papering over the cracks between your two parties which are going to break out sooner or later?
When you look at this document the amount of sentences that start with ‘We will’ and do not include the reference to a commission is, I think, incredibly striking. There are so many commitments that are doable, deliverable, bankable in this document and I think it’s a great credit to Danny Alexander and Oliver Letwin, who did a huge amount of the heavy lifting.
Let’s be clear about what’s happened here. Within about a week we have produced a full programme for government and we’ve also produced within a week a set of savings in terms of in-year savings to start to get the budget deficit under control. One of the privileges of my new responsibilities is talking to prime ministers across Europe and having introductory phone calls. This process in many other countries takes 40 days, takes 80 days. Two parties who hadn’t previously worked together at the national level have managed to crunch that in about nine. I think that is very impressive and I think it’s the shortage of commissions rather than the amount of them that Her Majesty’s press corps should be looking at.
Prime Minister, just to clarify two things; one is the promise to eradicate the bulk of the deficit; you’re now just promising to accelerate the reduction of it. And the second one is the promise to reduce immigration into the tens of thousands rather than the hundreds of thousands; that appears not to be in your programme.
Let me take the second first then I’ll ask George to answer the first of your questions.
In terms of immigration, what you can see is that there’s a cap going to be put in place and, yes, that is with the ambition of getting to levels of net migration that were prevalent in the 80s and 90s, which is tens of thousands not hundreds of thousands. That is the ambition. That’s what we want to achieve and we have a set of policies that will deliver that. It’s clearly a big change that needs to take place and we need to now set out how we’re going to put the cap in place and how the consultations on that operate. This is again an important part of the agenda that was secured in the negotiations that we had bringing the coalition together.
Chancellor of the Exchequer
If you significantly accelerate the reduction in the structural budget deficit you will eliminate the bulk of the deficit at least over the Parliament. Of course the phrase I was using during the general election was a phrase borrowed from the Governor of the Bank of England and I think a pretty remarkable event last week was the Governor of the Bank, on the very first day, coming out and welcoming - he doesn’t normally comment like that on fiscal policy, but given the severity of the economic problems we face and given this challenge of high inflation and the need to keep interest rates lower for longer for reasons of encouraging the recovery, I think for him to come out and say that was significant.
So they are exactly the same thing and it is at the heart of the agreement, it is on the first page of the coalition agreement that I helped negotiate last week and it is, of course, absolutely central to this programme. Indeed, it’s there on the back page in a nice green box, right there, ‘The deficit reduction programme takes precedence’ and that’s very, very important.
Can I ask what this proposal is to fund 200 all-postal primaries, targeted seats which have not changed hands for many years? I’ve never heard of that proposal before. And could I also ask you: you’ve kept the goal of ending child poverty by 2020; will you not change the definition of what child poverty is as well?
On the primaries, I’ll say a word about that before asking Nick his response to his political reform, we had an all-postal primary in South Devon in Totnes in the Parliament and I think it was a very good way of engaging a huge number of people. Now, there’s obviously a particular logic of doing this in seats which tend not to have changed hands, because you’re bringing - it is expensive, it does cost money, but you’re opening up primaries into areas where the constituency hasn’t changed hands, so there’s a greater logic for doing it. That is the idea. That’s the proposal. I think all parties will see its great merit and I think it’s something that we can deliver.
I’ll ask Nick to expand on that and then, George, if you want to answer the question on child poverty.
Deputy Prime Minister
The Prime Minister said it. This is part of a process which will just open up the culture of safe seats. We’ve got scores and scores and scores of MPs in constituencies where they basically have their seats for life, no questions asked, where the constituency has been in the same hands since the Second World War and part and parcel of the many reforms we’re going to introduce is to, of course, increase accountability, increase choice. Having these primaries made available to all the political parties, targeted in those areas where constituencies have always been in the same hands for decades is part of that process.
I’ll just add the point I don’t take anything for granted. I shall be in my constituency on Friday having a constituency surgery in the proper way.
Chancellor of the Exchequer
The document makes clear we want to maintain the goal of eliminating child poverty by 2020. Of course, we start with this big challenge, which is the Labour government didn’t get far enough down the road on its own terms, but it’s a very important ambition for us. It’s about creating a fairer society. I think our insight that we bring to the table is it’s not just about money. Of course, poverty is about relative income, but it’s also about life chances and I think a huge part of this programme and a huge part of the Queen’s Speech will be the big structural reforms to education and welfare in particular, which I think will help raise the life chances of people born into poverty and give them a route out.
I’m not sure you answered the question of whether you’re going to change the definition. I can see you may change the way in which you try to bring about that.
Chancellor of the Exchequer
There is legislation on the statute book which we didn’t oppose and the definition is set out in that statute.
I do think there are some additional things we should look at in terms of poverty, which is the time people spend in severe poverty and also the gap, as it were, between severe poverty and a better quality of life. I do think that that is something that needs a lot of attention, because it’s persistent, deep poverty that people are trapped in that I think we need a particular amount of attention to and I think that’s something that Iain Duncan Smith will be taking forward in his department.
Two things. First of all, on the defence section here you’re committing yourself to renewing Trident, but unlike your manifesto there’s no mention of a commitment to a continuous at-sea deterrent based on submarines. So is it possible that this document will allow your government to replace Trident with a nuclear weapon system that’s not submarine-based that doesn’t provide continuous at-sea deterrent?
The short answer to that is no. Our commitment is as set out in the manifesto. If it wasn’t continuous at sea, it wouldn’t be a proper deterrent. But the words in there are very clear about what the Liberal Democrats are still entitled, quite rightly, to do, which is for them to pursue alternatives. But it’s very clear in terms of the commitment.
You had another question.
There was a question on Europe earlier on. Could you just clarify, presumably your position is that you would oppose any change in the existing EU treaties that would move the European Union further towards economic governance.
Yes. We don’t believe there should be further transfers of power in that way. That’s something that the coalition has agreed about. We want to make what is there now work better. We’ll be positively engaged in the European Union, but we don’t believe there should be further transfers of powers. And there’s also this referendum lock in terms of further transfer of power. But as a sign of how we want to be engaged and involved, later today I’ll be going to France and having a meeting with President Sarkozy and tomorrow a meeting with Chancellor Merkel as part of that process.
Can you tell us when you expect a referendum to be held on electoral reform?
That is something that we are discussing. Clearly, in the bill that will bring in the referendum there are very important points from our point of view in terms of equalisation of seats, a smaller House of Commons. All these things need to be done together, but the exact timing of the referendum we will be discussing and we’ll be announcing and I hope before too long you’ll have clarity on that.
Just to be clear on the banking sector, is the scrapping of the FSA now officially off the agenda and could there still be a separate consumer protection agency?
Chancellor of the Exchequer
The central principle is that the Bank of England does macro-prudential regulation and has oversight of micro-prudential, but we are discussing exactly how that is delivered through the institutions and the impact that has on the future of the FSA and, indeed, a consumer protection agency.
Going back to postal primaries - you haven’t got it in mind to try and launch a postal primary in that seat, have you?
No. The short answer to that is no. The idea is when a relatively safe seat is selecting a new candidate, this should be an option that’s available. Many constituencies would like to do this, but what stops them is there is a cost because you are sending a ballot paper to every home. But I think in the interests of opening up our democracy, making our parties more democratic, consulting and getting more people involved in politics this is a good step forward.