Full transcript | George Osborne | Speech to Conservative Spring Conference | Cardiff | 5 March 2011

The Chancellor trails his budget in speech to the Tories' spring conference.

The Chancellor George Osborne has just finished speaking to the Conservatives' spring conference in Cardiff. Osborne promised that he will deliver an "unashamedly pro-growth budget" on 23 March (a claim I'm certain the NS's economics editor David Blanchflower will look forward to testing when the time comes). He also announced that the budget will contain provisions for the creation of enterprise zones and appeared to hint that the increase in fuel duty will be cancelled. Here's a transcript of the entire speech:

Ladies and Gentlemen, we begin our Spring Conference here in Wales celebrating all we have achieved since we last met a year ago - and conscious of the heavy responsibilities we shoulder in the year ahead.

Twelve months ago, we were in opposition - agitating for change, anxious for the fate of our country, angry at the damage a disastrous Labour government was doing to our economy.

Twelve months later, we are in government - delivering change, improving our country, and pulling our nation back from the precipice of the economic calamity on which we found it teetering.

Twelve months ago, we were governed by a Labour Prime Minister whose manifest unsuitability to lead our country was apparent not only to the whole of the country but, we know now, to the whole of his Cabinet too.

Twelve months later, we have in David Cameron a Conservative Prime Minister whose strength and conviction and compassion is clear for all to see.

Twelve months ago we had just three Welsh Conservative MPs.

Twelve months later we have almost three times that number, from Cardiff to Carmarthen West, from Montgomeryshire to Aberconwy and the Vale of Glamorgan.

What a great result you had here in the Principality.

What a testament to you, Cheryl, and Nick and everyone here who worked so hard.

Thanks to you all, the voice of Welsh Conservatives is today heard loud and clear in the Palace of Westminster.

Now, with the referendum on the Assembly powers delivered within our first year in office - exactly as we promised - and with the result an emphatic 'yes', we can look at the financing arrangements and the Holtham floor.

But first, let us all make sure the voice of Welsh Conservatives is also heard loud and clear in Cardiff Bay after May 5th.

Let's take the fight to Labour who have been in power here for too long.

What I want to talk to you about today is not the successes of the past, but the trials that lie ahead.

And my message is simple.

We are on a hard road to a better future.

We have to be realistic about where we're coming from - and optimistic about where we're going.

They say that to govern is to choose.

And on that day last May, when we won more seats than in any general election since the War and we became - after thirteen long years of opposition - the contender for government, we faced choices.

Choices the consequences of which we live with today.

Great as our advance had been, we didn't have an overall majority.

We chose to form a Coalition with another political party, the Liberal Democrats - rather than trying to govern with a parliamentary minority.

We decided to put our party differences aside and work together in the national interest.

And yes, of course, that choice meant compromise.

But it was a choice that has given this country - at one of those times in our history when she needs it most - a strong, decisive government, able to lead, able to reform, able to pass its laws without the nightly threat of Commons defeat and the paralyzing daily risk of collapse.

Let us imagine the damage our economy would suffer if the Chancellor of the Exchequer was standing here before you, less than three weeks before he delivers his Budget speech, unable to know whether the Budget measures he announced would survive a parliamentary vote and make it into law.

And we made another choice.

We chose to offer a referendum on AV - because without that offer, there would be no coalition and no strong government.

And the consequence is a referendum in just over eight weeks time.

But this Party has never been afraid of letting the people decide.

Let me shock you: on AV, I agree with Nick Clegg.

It is, as he says, a 'miserable little compromise'.

Let us go out there, over the next eight weeks, and make the case against the alternative vote.

It is unfair on voters.

It means politicians are unaccountable.

And the party leader who gets the most votes can end up losing.

If you don't believe me, just ask David Miliband.

So we chose to have a referendum - now let's make sure on May 5th the British people choose to keep the voting system that served this country so well for so long.

There's another, very important choice we made last May.

A choice whose consequences we are living with each and every day, here in Wales and across Britain.

We chose the hard road to a better future, and we chose it over the easy way to ruin.

Our nation was on the brink of bankruptcy.

One pound in every four we spent was borrowed.

Our families were more indebted, our banks were more over-borrowed, the government deficit we inherited was higher than any other major country in the world.

The model of growth pursued over the last decade was fundamentally broken.

That note left by Labour's departing Treasury Minister said it all: there was no money left.

And confronted with this situation - with the world looking into our eyes, judging whether we had the mettle to deal with the enormity of the problems we had inherited - it would have been easy to pull the bedcovers over our heads and hope somehow the problems would go away.

We didn't do that.

We faced up to the task in hand.

Within two weeks, we had made immediate savings to this year's spending plans - and brought Britain a breathing space in the European debt storm.

Within five weeks we had launched fundamental reforms to Labour's failed system of regulating banks - protecting the taxpayer, putting the Bank of England in charge and making sure that never again is a bank too important to fail.

Within fifty days, we had produced an emergency Budget that won credibility around the world and brought stability at home.

Within five months, we published a comprehensive plan to tackle the largest budget deficit in our nation's peacetime history - and do it in a way that protected our NHS and our schools.

And it's shameful that the Labour/Nationalist Welsh Assembly Government is cutting the NHS budget when I've given them the resources to protect it.

We took the steps to bring our country back from the brink, out of the financial danger zone.

We can be immensely proud of having had the courage to do that.

And the benefits of what we have achieved are real, tangible to everyone.

Not just in the avoidance of crisis or the absence of the daily dread of the world bond markets

But in the fact that our fiscal policy allows our independent Bank of England to keep interest rates lower than they would otherwise be.

Today, Britain has a budget deficit greater than that of Spain or Portugal.

But our businesses and families can borrow at interest rates similar to those of Germany and France.

That is the boost we have provided to our economy.

Has it been easy? No.

Has it been popular? Not with everyone.

Was there an alternative? No there was not.

It's a good test of the credibility of your political opponents to imagine what would happen if we actually listened to their analysis and followed their advice.

Labour deny there's a structural deficit.

No credible organization in the world agrees with them.

They say the cuts can be delayed.

Their own former Chancellor, Alistair Darling, says the cuts should start right from this April.

Their great idea is to say that in four years time we should have the same budget deficit as Portugal has today.

Just imagine if this country did what Labour suggest.

Imagine if I was to actually stand up on Budget Day and say I'm abandoning the plan - if I said that we're not going to tackle the deficit.

Now imagine the reaction.

The panic in the markets.

The credit rating downgraded.

And yes, the sky high market interest rates.

Think what that would bring.

The investment cancelled.

The businesses destroyed.

The jobs lost.

Britain next in the queue behind Ireland and Greece.

Here is a truth universally acknowledged: every Labour Government destroys our economy and brings us to the brink of bankruptcy.

We are not going to let that happen to our country again.

Ed Balls, and Ed Miliband, don't want to confront the truth about what needs to be done to clean up the mess - because they can't handle the truth: it's their mess.

Of course they had different responsibilities.

Ed Balls should have taken more care in writing Gordon Brown's budgets.

And Ed Miliband should have taken more care in photocopying them.

But they can't handle the fact that they were the two people at the Treasury when it all went wrong.

That they were the two people who went on a reckless gambling spree with this country's finances;

who placed all our bets on the City of London and saw the taxpayer pay the price

who borrowed and borrowed and borrowed on our nation's credit card, and mortgaged our children's future.

who destroyed our manufacturing industry, suffocated our small businesses with red tape, taxed those who went out looking for work to pay more benefits to whose who didn't.

Miliband and Balls.

Two left-wing politicians who don't understand anyone who wants to get up and get on, anyone who want a better life for their family, anyone who want to create wealth, and start a business, and create jobs, and leave something to their children.

Anti-enterprise. Anti-business. Anti-aspiration.

Anti everything that creates growth and jobs.

That's Miliband and Balls.

They've brought our country to the brink of bankruptcy in the past and they do it all again if they ever got the chance.

And we're not going to let that happen.

Enough of them and their past.

What lies ahead for our country?

I said at the beginning that we have to be realistic about where we're coming from - and optimistic about where we're going.

Britain is coming out of the deepest recession since the 1930s and the biggest banking crisis in our history.

We spend 120 million pounds every day just paying the interest on the national debt.

That's why I warned and warned again last year that recovery was always going to be challenging and choppy.

And then there are the headwinds that are not in Britain's, or any one country's, control.

The soaring cost of world food.

The painful rise in the world price of oil, pushed higher still by the crisis in Libya.

The Jasmine revolution seems like a desert storm that has swept out of a clear blue sky.

But it has been long in its coming.

While we are all righty focused on the threat from Islamic extremists, Conservatives have always understood that there is a far more powerful force.

The desire of people everywhere to be free.

Not just something for the people of London, Edinburgh and Cardiff to enjoy.

But on the streets of Tripoli and Benghazi, in the internet cafes of Tunis and Cairo - they want the same thing as we want.

To have a voice and be heard. To have a stake in our world. To leave something better to our children.

They want what we want. Freedom.

There is no one precise model for all countries and all the governments.

But let's be clear.

Freedom and peace are not alternatives - they are indivisible.

Democracy and stability are not alternatives - they are indivisible.

British interests and the values of liberty and open society are not alternatives - they are indivisible.

The British people and the cause of freedom - we are indivisible.

As Chancellor I also believe political freedom will bring over time - as it always does - economic prosperity.

Our world will become a freer and richer place.

But in the short term it adds to the challenge.

I know how hard the rises in world oil prices are hurting families in Britain.

When it costs £1.30 for a litre of petrol; £80 to fill up a family car; I know people feel squeezed.

And I say this to people watching:

I hear you.

This April I'm freezing council tax, cutting income taxes for 23 million people and increasing child tax credits payments to the low paid.

But we've got another of the Labour Party's pre-prepared rises in petrol tax also coming this April - one penny above inflation.

I won't take risks with economic stability, or wreck the public finances.

But I promise you I am doing everything I can to find a way to help.

Help the people that this Government will always help: people who work hard, who save, who want to provide for their family without depending on the state for everything.

We are on your side.

For Conservatives understand something absolutely fundamental about Britain that socialists have never understood - and never will.

Governments don't create growth by themselves.

It's people who create growth.

It's the strivers, the entrepreneurs, the engineers, the innovators, the savers, who create growth.

To learn a new skill, to get a new job, to start a new business, to want to leave something to your children.

These are the most natural human impulses of all.

And that is why for all the realism about our past and present, I am so optimistic about the future.

For if you take those impulses of millions who strive to get on, bring them together and make those impulses a reality, then you will have a bigger economy and a better society.

In the last ten months we've delivered a great deal to help.

We've cut the tax rates on businesses large and small.

Funded new apprentices.

Stopped Labour's hated jobs tax, and reduced employment costs for millions.

We've lifted nearly a million of the low paid out of tax altogether.

We've funded new transport and new broadband - including here in Wales with rural broadband to Pwllheli and the great announcement this week of the electrification of the line to Cardiff.

But today in Britain there are still too many obstacles standing in the way of people of enterprise and aspiration; too many forces of stagnation determined to frustrate those who want to get on.

In my Budget in less than three weeks time, we will confront the forces of stagnation that stand in the way of success; bring down the barriers that stop Britain getting back on its feet.

The Budget is going to be unashamedly pro-growth, pro-enterprise and pro-aspiration.

It will look at the planning delays, the new regulations, the bureaucracy and the costs that hold business back and stop jobs being created.

Not just in London, or the South East - but across Britain.

Do you know one of the greatest scandals of the Labour years?

For every ten jobs created by business in the south, just one job was created in the north and the midlands.

Here in Wales, the gap with the richer part of our nation grew greater.

84,000 manufacturing jobs were lost.

We have to go in a different direction.

However important financial services may be, we can't place all our bets as Labour did on the City of London.

We need other parts of Britain, and other sectors of our economy, to grow and succeed.

Wouldn't it be good if Britain made things again?

We want to see a manufacturing revival.

In the world economy's race to top, we want Britain to be the winner.

Today I confirm that in the Budget we will introduce new enterprise zones across parts of Britain that have missed out in the last ten years.

They will be centres for new businesses and new jobs where taxes will be even lower and more restrictions on growth removed.

They will be in places in our land with great potential - but which need that extra push from government and local communities working together.

I am delighted that Nick Bourne and the Welsh Conservatives have said they want to make these new enterprise zones work here in Wales too.

We need to set people free again.

The entrepreneur who can't get finance from the bank, and doesn't know where else to turn.

The small business owner who wants to hire her first member of staff, but worries she'll go bust if she gets taken to an employment tribunal.

The local manufacturing company that wants to expand its workshop, but can't because the town hall bureaucrats won't give them permission.

The friends at work that quit their jobs at the big firm, and risk everything on their new start up - and search in vein for an enterprise zone, where the rates are low and the planning controls don't stand in the way.

The student who nurtures a secret ambition to be an engineer, but thinks her friends will laugh at her - "Britain doesn't make things anymore" they tell her.

The sales director that dreams of breaking into new markets abroad, but can't find anyone to show him how.

The nurse, the doctor, the teacher, the police officer, the council worker - who sees every day how things could be done better, and money could be well spent, if only they were allowed to use their common sense and do the things they were trained to do.

The postal worker and the train driver who serve their community with pride, see their country needs their help, and sees instead their union taking them out on strike.

The multi-national chief executive that looks around the world for where to invest in a new green energy project and create hundreds of jobs - but can't justify to their board the risks of investing in Britain.

The young woman, setting out on life, with a great idea for a new business - but who sees nothing but obstacles in her path.

The young man, who wants to get off benefits and into a job, and make something of his life, but can't see the point if the Government takes away more than 90 pence for every pound he earns.

These people - all of them - are the people who are going to build a better future for Britain.

And in the Budget to come, and in the years ahead.

We.

This Party.

This Government.

This Chancellor.

We are all going to be on your side.

Jonathan Derbyshire is Managing Editor of Prospect. He was formerly Culture Editor of the New Statesman.

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Live blog: Jeremy Corbyn hit by shadow cabinet revolt

Three shadow cabinet members resign following the sacking of Hilary Benn. 

11:47 The hope among Labour MPs is that Corbyn will "do the decent thing" and resign if (or rather when) he loses the confidence vote due on Tuesday. They are convinced they will win a majority but believe that reports of "80 per cent support" are wide of the mark. 

11:40 Labour's only Scottish MP, Ian Murray, has just resigned as shadow Scotland secretary. As I noted earlier, this means the job will have to be done by a non-Scottish MP or a peer. 

11:21 Shadow Scotland secretary Ian Murray (see 09:11) and shadow transport secretary Lillian Greenwood are expected to be the next to resign. 

11:11 Shadow minister for young people Gloria De Piero has become the latest to resign. It's worth noting that De Piero is a close ally of Tom Watson (she's married to his aide James Robinson). Many will see this as a sign that the coup has the tacit approval of Watson (who is currently en route from Glastonbury). 

De Piero wrote in her resignation letter to Corbyn: "I have always enjoyed a warm personal relationship with you and I want to thank you for the opportunity to serve in your shadow cabinet. I accepted that invitation because I thought it was right to support you in your attempt to achieve the Labour victory the country so badly needs.

"I do not believe you can deliver that victory at a general election, which may take place in a matter of months. I have been contacted by many of my members this weekend and It is clear that a good number of them share that view and have lost faith in your leadership.”

10:58 Shadow defence secretary Emily Thornberry has backed Corbyn, telling Michael Crick that "of course" she has confidence in his leadership. She is the fourth shadow cabinet minister to back Corbyn (along with McDonnell, Abbott and Trickett). 

10:52 Our Staggers editor Julia Rampen has written up Benn and McDonnell's TV appearances. 

"Two different visions for the Labour Party's future clashed today on primetime TV. Hours after being sacked from the shadow cabinet, Corbyn critic Hilary Benn was on the Andrew Marr Show ruling himself out of a leadership challenge. However, he issued a not-so-coded cry for revolt as he urged others to "do the right thing" for the party. Moments later, shadowhancellor John McDonnell sought to quell rumours of a coup by telling Andrew Neil Jeremy was "not going anywhere". He reminded any shadow ministers watching of the grassroots support Labour has enjoyed under Corbyn and the public petition urging them to back their leader."

10:46 Asked to comment, Tony Blair told the BBC: "I think this is for the PLP. I don't think it's right for me or helpful to intervene." 

10:38 On the leadership, it's worth noting that while Corbyn would need 50 MP/MEP nominations to make the ballot (were he not on automatically), an alternative left-wing candidate would only need 37 (15 per cent of the total). 

10:27 Jon Trickett, one of just three shadow cabinet Corbynites, has tweeted: "200,000 people already signed the petition in solidarity with the leadership. I stand with our party membership." 

10:14 McDonnell has told the BBC's Andrew Neil: "I will never stand for the leadership of the Labour Party". He confirmed that this would remain the case if Corbyn resigned. McDonnell, who stood unsuccessfully for the Labour leadership in 2007 and 2010 (failing to make the ballot), added that if Corbyn was forced to fitght another election he would "chair his campaign".  

10:12 Tom Watson is returning from Glastonbury to London. He's been spotted at Castle Cary train station. 

10:07 A spokesman for John McDonnell has told me that it's "not true" that Seema Malhotra, the shadow chief secretary to the Treasury, is canvassing MPs on his behalf. Labour figures have long believed that the shadow chancellor and former Labour leadership contender has ambitions to succeed Corbyn. 

09:51 Appearing on the Marr Show, Hilary Benn has just announced that he will not stand for the Labour leadership. "I am not going to be a candidate for leader of the Labour Party." Tom Watson, Angela Eagle and Dan Jarvis are those most commonly cited by Corbyn's opponents as alternative leaders. 

09:46 Should Corbyn refuse to resign, Labour MPs are considering electing an independent PLP leader, an option first floated by Joe Haines, Harold Wilson's former press secretary, in the New Statesman. He argued that as the representatives of the party's 9.35 million voters, their mandate trumped Corbyn's.

09:38 Here's Stephen on the issue of whether Corbyn could form a shadow cabinet after the revolt. "A lot of chatter about whether Corbyn could replace 10 of his shadow cabinet. He couldn't, but a real question of whether he'd need to. Could get by with a frontbench of 18 to 20. There's no particular need to man-mark the government - Corbyn has already created a series of jobs without shadows, like Gloria De Piero's shadow minister for young people and voter registration. That might, in many ways, be more stable." 

09:32 Despite the revolt, there is no sign of Corbyn backing down. A spokesman said: "There will be no resignation from the elected leader of the party with a strong mandate".

09:11 Shadow Scotland secretary Ian Murray is one of those expected to resign. As Labour's only Scottish MP, the post would have to be filled by an MP south of the border or a peer. 

09:01 Diane Abbott, Corbyn's long-standing ally, has been promised the post of shadow foreign secretary, a Labour source has told me. 

The shadow international developmnent secretary is one of just three Corbyn supporters in the shadow cabinet (along with John McDonnell and Jon Trickett). Though 36 MPs nominated him for the leadership, only 14 current members went on to vote for him. It is this that explains why Corbyn is fighting the rebellion. He never had his MPs' support to begin with and is confident he retains the support of party activists (as all polls have suggested). 

But the weakness of his standing among the PLP means some hope he could yet be kept off the ballot in any new contest. Under Labour's rules, 50 MP/MEP nominations (20 per cent of the total) are required. 

08:52 Welsh First Minister Carwyn Jones has joined the revolt, telling BBC Radio Wales that events make it "very difficult" for Corbyn to lead Labour into the next election. 

08:50 Tom Watson, a pivotal figure who Labour MPs have long believed could determine the success of any coup attempt is currently at Glastonbury. 

08:26 Following Hilary Benn's 1am sacking, Jeremy Corbyn will face shadow cabinet resignations this morning. Shadow health secretary Heidi Alexander has become the first to depart.

The New Statesman will cover all the latest developments here. John McDonnell, Corbyn's closest ally, is appearing on The Andrew Marr Show at 9:45.

"This is the trigger. Jeremy's called our bluff," a shadow cabinet minister told me. He added that he expected to joined by a "significant number" of colleagues. The BBC's Laura Kuenssberg has reported that half of the 30 will resign this morning. 

Corbyn is set to face a vote of no confidence from Labour MPs on Tuesday followed by a leadership challenge. But his allies say he will not resign and are confident that he will make the ballot either automatically (as legal advice has suggested) or by winning the requisite 50 MP/MEP nominations. 

George Eaton is political editor of the New Statesman.