It is a special pleasure to speak to Conference in the city where I had my political baptism of fire. Glasgow is a great city and Glaswegians are warm, hospitable and humorous.
But Glasgow has experienced one party, Labour, rule for decades. And I was part of the Labour political machine here in the 1970s. On one level it worked. Insanitary slums were razed to the ground. We built 30,000 new social homes for rent in a decade – 5,000 in one year, a scale unimaginable today.
There was also an unhealthy tribalism and a Tammany Hall political machine in which union bosses had excessive influence in picking candidates and deciding policy. Judging by Falkirk, and other Labour fiefdoms, nothing very much has changed.
That is one major reason why we must not concede to Labour the mantle of radical progressive politics. We must assert our party’s ownership of that tradition, which in Scotland runs for over a century: from Asquith, Gladstone and Campbell-Bannerman through to Jo Grimond, David Steel, Charles Kennedy, Bob McLennan, Ming Campbell, Jim Wallace and many others.
The challenge today is to reinforce that Liberal tradition which is at risk of being compromised by working with what, on Clydeside, are called ‘the hated Tories’. And that’s when people are being polite.
Like you, I’ve spent most of my political life fighting against those ‘hated Tories’. But despite that I believe that it was both brave and absolutely right for the party, under Nick Clegg’s leadership, to work with the Tories in an economic emergency, in the UK national interest.
Theresa May once described the Tories, a decade ago, as the Nasty Party. After a few years trying to be nice and inclusive it has reverted to type: dog whistle politics, orchestrated by an Australian Rottweiler. Hostility towards organised labour, people on benefits and immigrant minorities. The list of people the Tories disapprove of is even longer: public sector workers, especially teachers; the unmarried; people who don’t own property. Their core demographic excludes pretty much anybody who wouldn’t have qualified for the vote before the 1867 Reform Act.
These prejudices can perhaps be explained, in part, by their age profile. I suspect I would qualify – on age, not ideology – to be a member of the Young Conservatives.
But I think the other reason is deeper: a cynical calculation in difficult times that fear trumps hope; that competence requires callousness.
That is not our kind of politics. It is ugly. And we will not be dragged down by it. That is why our Liberal Democrat message about Fairness is key. We can legitimately claim ownership of fair tax policies which have lifted millions of low earners out of income tax. It is our policy. Don’t let the Tories steal it. I can remember in opposition bringing this proposal to conference, at a time when George Osborne’s top priority was cutting inheritance tax for millionaires.
And our commitment to taxing unproductive wealth – valuable property – through a Mansion Tax, is economically sensible and popular; but above all, fair. Don’t let Labour steal that either.
Fairness takes us so far – but in my view not far enough. We are not just a nicer version of the Tories. There are fundamental differences about how to create a stronger economy and more jobs.
We are five years on from the biggest market failure of our lifetime. Financial capitalism collapsed and was rescued by the state. Labour was in charge and had fallen asleep at the wheel. They were negligent. The Tories’ friends and donors were at the heart of the greed and recklessness which lay behind that disaster. Today they yearn to return to ‘business as usual’. Whilst we work with them, pragmatically and constructively, to clean up the mess, we must not allow them to turn the clock back.
In essence, the Tories have a simple world view; private good, public bad. Labour offers the polar opposite. As Liberal Democrats we value both public and private sectors. I support private business, big and small. I also support mutual and employee ownership. And even Tony Benn couldn’t claim to have launched two state-owned banks; the Green Investment Bank – based in Edinburgh- which we promised three years ago has already committed £685 million to green projects. And the Business Bank, which I launched at Conference exactly a year ago is now mobilising private capital to support new banks, local banks and non bank finance. It is the key to stopping the suffocation of good small business by the big banks.
By contrast, the Conservatives’ spiritual home is in the United States. They have become the Tea Party Tories. They want to throw overboard any tax or regulation which gets in the way of their blinkered small state ideology. Deep down they believe that there is no alternative to unhindered individual self-interest; that attempts to tackle big disparities of income and wealth takes us down the road to socialist serfdom.
Our rejection of dogma also leads us to an eclectic mixture of markets and regulation. In government we are rightly getting rid of the red tape which throttles small business and holds back entrepreneurs. But some regulation is essential. And that is why I work – with Ed Davey and colleagues – to resist Tory pressure to emasculate environmental regulation, as in their ludicrous war on windmills.
That is also why we have seen off demands from a Tory donor to make it possible to fire people for no reason whatsoever.
Let no one tell you that Liberal Democrats have not made a difference. Without us in government, we would be ruled by people who think the problem with this country is that workers have too much job security.
Instead, I will act against abusive practices in zero hours contracts, like exclusivity arrangements which prevent workers seeking alternatives, even when they are given no work. I have secured agreement in government to launch a formal consultation on the best mechanism to tackle abuse.
We have had to take some tough and necessary economic decisions with the Tories. There is of course common ground on the need to cut the budget’s structural deficit and promote private enterprise. There are welcome signs of returning confidence. But let us not be carried away, and let’s not get sucked into a petty point scoring, Labour-Tory Punch and Judy show on the economy.
It took many years of mistakes to create the financial crisis. It has taken five years to start to dig our way out. We mustn’t now settle for a short term spurt of growth, fuelled by old-fashioned property boom and bankers rediscovering their mojo. We have seen it all before and there are already amber lights flashing to warn us of history repeating itself.
The Prime Minister says I am a Jeremiah. But you will recall from your reading of the Old Testament that Jeremiah was right. He warned that Jerusalem would be overrun by the armies of Nebuchadnezzar. In my own Book of Lamentations I described how Gordon Brown’s New Jerusalem was overrun by an army of estate agents, property speculators and bankers.
The problem we have now is that the invaders are coming back. They have a bridgehead in London and the south east of England. They must be stopped. Instead we need sustainable growth.
That involves rebalancing the economy across the UK in favour of exports and investment – the central purpose of our government’s industrial strategy. We should celebrate the success stories of motor vehicles and aerospace, the creative industries and educational exports and the partnership between government and business in all of these sectors. Manufacturing is coming back through rebuilt supply chains. We are attacking the country’s scandalous neglect of skills through our successful relaunching of large scale apprenticeships. We have given priority to Britain’s world class science and have created a chain of innovation centres – the catapults – of which there are two in Glasgow, promoting new, business-led, technologies for advanced manufacturing and new offshore renewables.
We are building a genuine cross-party consensus around these government interventions so that they endure. But, make absolutely no mistake, without Liberal Democrats they would not have happened.
But if sustainable recovery is to be achieved, we must meet the enormous challenge of house building. Demand growth has been outstripping supply, driving up both rents and prices. Property is simply unaffordable for families without big incomes or access to the bank of mum and dad. Yet we are nowhere near recapturing the house building drive which pulled Britain out of the slump in the 1930s. Barely 100,000 homes a year are being completed, a quarter of what was being achieved in the 1960s. In addition, two million social homes have been sold since Mrs Thatcher began in 1979and no less than three quarter of a million of them were sold under Labour. Hence the enormous pressure on families trapped by a lethal combination of low pay, rising rents and tighter benefit rules.
The priority right now is increasing housing supply through private and public sectors.
Conference took a strong step forward this morning with the proposal to give councils greater borrowing capacity to get on and build social housing. The country desperately needs delivery of homes not dogmatic arguments over tenure.
I hoped that we would find common ground with the Tories at least in one area: supporting an open, outward looking country. Indeed we said with one voice: Britain is open for business.
Sadly, that message has changed. Brazilian and other students who would bring economic and wider benefits to British universities are being told they are burdensome immigrants so they go to the United States instead. Many Chinese tourists and businessmen are so fed up with the hassle and humiliation involved in trying to visit Britain to invest here that they are taking their money to Germany and France.
What they hear is that we are closed for business. That must change.
Moreover, our status as a popular destination for job-creating investment from Japan, the USA and mainland Europe could be compromised by careless talk from some of my cabinet colleagues – let alone the backbench Bones and Hollobones – about Britain leaving the European Union and the Single Market. Britain’s future in the European Single Market is being put at risk by the Tories. Yet millions of British jobs depend on our protecting that relationship.
Let’s remember that we voted to join the present Coalition. We did not vote to join a coalition with UKIP.
Of course, the Tories are frightened by the public reaction to overseas workers. But there is something deeply opportunistic about people who lecture our workers, and the rest of Europe, about the need for free and flexible labour markets, but then squawk with panic when those free and flexible labour markets bring in foreign workers.
The politics of identity is toxic, and difficult. At times of hardship, those outside the elite of rich and powerful tend to blame outsiders. But we need to address the underlying problem. At present most workers’ pay is being squeezed in real terms. This has averted an unemployment disaster in the short term. But there is no long-term future in Britain being a low pay, low productivity economy. We cannot just wave a magic wand and make the problem go away but we can be more ambitious in showing the way forward. I have asked the Low Pay Commission to advise how we might achieve a higher minimum wage without damaging employment.
The deeper lesson is that business has to be responsible as well as profitable.
Three years ago at Conference I said in my speech that we must shine a bright light in the dark corners of capitalism. I thought I was paraphrasing Adam Smith, the sage of the Scottish Enlightenment; but much of the press thought that Karl Marx had risen from his grave in Highgate cemetery to join the Coalition Government. That was before either the Libor or hacking scandals broke; and the revelation of industrial scale tax avoidance by prominent companies. Trust was very badly damaged.
Responsible capitalism is, actually, what sensible business wants. And I have worked with business amongst other things to achieve binding shareholder votes on executive pay; to make real progress in getting women properly represented on company boards and getting institutional investors to think longer term. Jo Swinson and I have a lot more work to do to advance family-friendly working and to establish an open register of who owns companies, to help curb tax dodging. And I am preparing to legislate to make it easier to prosecute and ban rogue directors who repeatedly walk away from their debts and their customers. We Liberal Democrats see business as a partner not an adversary in creating responsible capitalism.
I’d like to end, as I began, in Glasgow. There is a stretch of the Maryhill Road in the north of the city that connects the ward I once represented with the constituency Jo now represents in parliament. One thing has not changed in all those years. Despite the efforts of different governments in the UK and Scotland there is an enormous gulf – as Jo said in her opening speech, seven years of life expectancy – between the prosperous and educated at one end and a seriously deprived community at the other.
I want our party to be arguing for the unity of the United Kingdom. But unity is not just about Scotland and England. It is also about north and south. Public and private. Rich and poor.
In our tribally divided politics, the country badly needs the one party that can bridge these dangerous divides.
This isn’t just a matter of splitting the difference between other parties’ policies but setting out a clear and distinctive vision.
The country needs a party which is competent in office but also committed to fighting prejudice and entrenched privilege. We are that party.