Show Hide image UK 19 July 2014 Tim Farron's Beveridge Memorial Lecture: full text The Liberal Democrat president calls for "a new consensus" at the Social Liberal Forum conference. Print HTML William Beveridge never led our country or our party. But he changed both in a spectacular way. He was a humble man, a good man and so I am going to make an assumption that he’d want to know what social Liberals plan to do next, rather than hear us eulogise about him. It’s a massive honour to be asked to give this lecture – I fully count myself as a Beveridge liberal. Mostly because he believed in ambitious government that could improve the lives of its citizens. So I want to use this lecture to say that we should reclaim Beveridge’s ambition, his sense of mission of looking beyond what might be deemed possible towards what we believe is necessary. I want to reflect on the Beveridge consensus which was of course superseded 35 years ago by the Thatcherite consensus. We should shoulder Labour out of the way and fully reclaim the Beveridge consensus as being Liberal by its birth, but we should then also seek to reclaim the free market from the Thatcherites. Liberals of every shade should support the free market – but the Thatcherite consensus that has had its hold to an extent on all of Britain’s parties, is fundamentally anti free market. Laissez faire and the absence of regulation, the privatisation culture in the broadest sense, is a betrayal of the free market. It is the triumph of the oligarch and the monopoly, it is the defeat of the little guy, it is the roadblock to innovation, it has led to the economic disaster that in government we are trying to fix. So a new consensus will rest in large part on this party being the party of freedom in every sense, including freedom in the market place. A new consensus must adopt the spirit of Beveridge and Keynes, and to my mind that spirit is one of ambition, an inspired and inspiring confidence that government can make a difference; that in the face of huge challenges, politics and economics can provide positive solutions to make things better, that government should roll up its sleeves, not wring its hands. Beveridge was clear that we must roll up our sleeves for an express purpose – to slay the five giant evils of his age. He identified them: ignorance, want, idleness, squalor and disease. He identified the slayers of those evils too: state education, a welfare state, full employment, decent homes and the National Health Service. Can we identify those evils, or their descendants in Britain today? Maybe we wouldn’t use the same language, but what Beveridge called ignorance surely stalks our land still; with millions excluded from access to the digital revolution, and so many isolated socially or physically. And lets not pretend that the divide between the schools of the wealthy and the schools of the rest does not constitute an evil that robs millions of the opportunity to reach their potential. Is want dead? Hardly, inequality goes way beyond education – millions, young and old, live in poverty, many of them in work, all of them with their freedoms curtailed and often crushed by enslavement to crippling debt. Idleness sounds pejorative doesn’t it? Yet there are 2.5 million without work, and many more without enough work. A million under 25 out of work – but alongside it, another evil joins idleness in the workplace: exploitation. People in work on wages so low that they need welfare to bail them out, or a pay day lender. Squalor? Well the slums may not blight the country now, but the criminal lack of homes, overcrowding, thousands on the streets, hundreds of thousands in unfit accommodation. All of these are a squalid stain on our society. The diseases we face today are often the diseases of age – cancers, dementia, health needs that follow the course of painful decline in health and the newly prominent diseases of old age. And at all ages we increasingly, rightly now, face up to the reality that so many millions lives are blighted by mental illness, most commonly depression. So, wasted potential, poverty, exploitation, housing need, mental health – they’re not the only evils we face, but they present an enormous challenge for any society that wishes to call itself civilised. It will take more than 40 minutes to fix those challenges, so forgive me if I concentrate what I say on the areas I have been working on in housing and poverty – but lets be clear that none of these current evils can be solved by sticking to the post-79 consensus of passive, neutral, inactive government and that all of those evils can be beaten by active, ambitious, liberal government. We must decide that we want Britain to end the waste of its best talent through educational inequality, poverty, exploitation, poor housing and poor mental health – and we should design government in order to make it so. You should expect the ambition to change British politics to come from right here. It is no accident that the great strides forward over the last 150 years have been inspired by Liberals, Mill, Gladstone, Hobhouse, Keynes and Beveridge. You should then be unsurprised that the next consensus will have its birth in our party too. Why? Because our party alone is liberated from the shackles of vested interests that stultify and deaden our political opponents, whose very raison detre is to suppress innovation, and new ways of doing things, for fear that the vested interests might lose their pre-eminence. So, if Britain is going to change, then that change is going to start here. And I see every reason why that change should start her, now, today. Mill, Gladstone, Hobhouse, Keynes and Beveridge are long gone. And we know that the historical record of isms, ideologies and idealists are the obsession of the few. If you are in squalid housing, in debt because you can’t earn enough to get by, desperate because your kids are in classes of 30+ and falling further behind…. Then neither the glorification of Beveridge nor the demonization of Mrs Thatcher give you one shred of comfort. So let’s not wallow in the past, let’s stake out a future. One that William Beveridge would be proud of and one that belongs to us and belongs to now. The post war consensus of a mixed economy, support for a welfare state and strong public services is one that held sway during the bleakest period in electoral history for the Liberals – and yet that consensus is one that many Liberals and Social Democrats feel a sense of ownership of. That consensus broke down during the 1970s. It broke down for a variety of reasons, not least that the shared economic policy of Labour and Tory governments from 1945 was deemed to have failed, amidst international crises, the break down in industrial relations within the UK and inflation of over 12%. The breakdown in consensus was marked by a steep decline in voter loyalty to Labour and the Conservatives, it saw the beginning of electoral strength for the Welsh and Scottish Nationalists, for a short time the rise in the National Front, but most notably it saw the rise in the Liberal Party, and then the Alliance and ultimately the Liberal Democrats. Up until 1974, 70% of people in classes C2, D and E voted Labour and 80% of people in classes A, B and C1 voted Conservative – at pretty much every election. From the elections in 1974 onwards that began to steadily break down, whether its now solidifying into a different set of loyalties is hard to say. It seems to me that tribal politics is still alive and well, but those loyalties are formed by who and what you are against far more than who and what you are for. The electoral hit that the Liberal Democrats have taken since 2010 seems to be much less about punishing us for the decisions we have made, and more about punishing us for the company we have kept! But politics should be about positive plans for a better Britain, not fear and loathing for one tribe or another. We should want the British people to choose the Liberal Democrats for what we are for, more than who we are against. So let us stake out a vision of what and who we are for….. We should be for active, ambitious, liberal government. We’re not for turning the clock back to pre-Thatcher. We’re for saying that Thatcherism’s day has been and gone. It failed, just as the state socialism that preceded it failed. The consensus broke down for good reason, lets never forget that. The 1970s bring back dreadful memories of a weak economy, hopeless state management of that economy, gross inefficiency and poor quality in public services, of rising prices and rising unemployment. Add this to disastrous and paralysing industrial relations and you have a toxic brew. A toxic brew cooked up throughout the 70s by the way, by both the Conservative government of Ted Heath and the Labour government of Harold Wilson and James Callaghan. The end of the consensus came because voters lacked confidence in government as a whole and was coupled with a decline in voters’ confidence in their historic parties of choice. Now doesn’t that sound familiar? Perhaps the movement from one consensus to another is always set against such a backdrop? In which case, we should be even more convinced that this is our moment. So Margaret Thatcher’s election in 1979 was a revolutionary moment, it was the formal breaking of the post-war consensus. And we have much more to learn from her than we might imagine. She was the ultimate insider insurgent. For much of her time in power she perfected the art of being consummately in power and yet permanently anti establishment. Her economic solutions were wrong and have had a lasting and damaging impact – handing control over our major utilities to foreign investors and poorly regulated oligopolies, abdicating responsibility for managing our economy at all, weakening the infrastructure that underpins our economy and weakening and dividing our society. But Margaret Thatcher set herself up as the enemy to the postwar consensus – not just to the unions, or to the nationalised industries, but to Whitehall mandarins and their ‘can’t do’ attitudes – the ultimate small c conservatives – their resistance to radical solutions, and their apparent enjoyment of the Butskellite passing of the parcel between indistinguishable Labour and Conservative governments. She challenged traditional patrician conservativism too and was as much loathed by the knights of the shires as the union barons. She didn’t just – rightly – end the illiberal union closed shop, she - for a while at least – ended the closed shop for the old etonian Oxbridge elite. We should admire her for both. Lets not overlook the fact that Mrs Thatcher succeed in establishing a second postwar consensus. A consensus in favour of unregulated markets, of an unambitious can’t do state, of hands off government. It was a consensus across the political divide. Labour resisted at first but then bought it hook line and sinker. Back in the 40s and 50s, it took a few years for the Tories to accept the Beveridge consensus, and similarly it took Labour a decade to accept the Thatcher consensus. But accept it they did. Labour’s decision to buy into Thatcherite economics when it removed the restraints on the banking sector in 1997 is arguably the point at which the financial disaster in 2008 became inevitable. It’s a consensus that Liberal Democrats – to our huge credit – have largely refused to buy into. But in our four years in government, under the immense pressure of the financial crisis, we have not been able to take advantage of an opportunity to subvert it. And of course we won’t subvert it if we make the mistake of thinking that our future lies as a party of laissez faire economics. It is good that my friend Jeremy Browne has challenged the party with his new book, Race Plan. Liberals should never be afraid of debate, we are indeed a broad church. I do not want to excommunicate Jeremy, I want to convert him! Jeremy’s position is intellectually coherent, honourable…but I don’t think he’s right. We should not accept that passive, neutral government creates a strong liberal framework. Of course it doesn’t. Small government means weak citizens. We want citizens to be free to choose to live their lives as they wish, and free from the threats, forces and impediments that would prevent them doing so. Freedoms to, and freedoms from. Never mind economic liberalism versus social liberalism – its time to stake out the case for comprehensive liberalism based on a true understanding of what creates and what prevents freedom. Laws that prevent you worshipping as you choose, living with whom you choose, reading what you choose curtail your liberties no more and no less than the poverty, the ill health and the inadequate education that robs you of your choices. I demand that Liberals should defend our citizens from all of those threats. There is no political market for a centre right laissez faire liberal party amongst the British electorate, or for a party that sets itself up as the permanent see-saw coalition partner. To aim to be either would be to neuter our movement and invite electoral annihilation on the same scale of our friends in the German FDP who chose a similar path. To follow the FDP example would be to abdicate responsibility for our economy. Just when our economy needs vision and leadership, we would be offering to give it none. The same as our political opponents. There is no future in this, it is not our future, it is not even liberalism. My argument is that the post 1979 consensus should now be considered dead. It doesn’t need an FDP-style rebrand, it needs a decent burial. We are Beveridge liberals, not because we think that the clock must be turned back to pre 1979, but because we share the values of the architects of that earlier consensus. Not just Beveridge, but Keynes too. Neither of those two were dogmatists, they were not concerned about what the apparatus of the state must look like – big or small – instead they were interested in the end results, the wellbeing of all citizens. Keynes promoted the notion of interventionist economics, that governments had both the responsibility and the ability to affect their economies to benefit their citizens, principally by increasing demand by public spending in order to create economic activity to create jobs. Keynes was seen as the counter point to laissez faire economists on the one hand and Marxists on the other. An economic pragmatist, whose motives were a genuine concern for the welfare and standard of life of all citizens but especially those who were the poorest. And Beveridge – well, arguably Beveridge changed everything. He took his opportunity, and he did it in impossible circumstances. Beveridge was an MP for one single year – hounded out of parliament by a BMA sponsored campaign in his Berwick constituency, because he had proposed something called a national health service. Beveridge was a member of the smallest minor party in a coalition government, the country faced the existential crisis to end them all as war raged across Europe. And yet, against this backdrop, Beveridge had the audacity to think the biggest and best of ideas and to make them happen. And he also did this against the backdrop of the tightest fiscal contraction this country had ever seen. That is a lesson for us today as we seek to build a new consensus. If we want to recast and revitalise Britain then we must understand that we must be wise and disciplined in our spending on revenue, but utterly devoid of timidity when it comes to capital investment. Labour’s approach appears to be the opposite – despite the deficit, they are incapable of making the tough decisions to reign in public revenue spending and equally incapable of making the tough and far-sighted decisions to invest to expand our infrastructure to build the Britain of the future. Lets not get too misty eyed about the first post war consensus because it became adulterated, detached from the principles that underpinned it, why? Because while it was conceived by Liberals it was enacted and managed by those who were not Liberals. But the fundamentals behind that Liberal consensus were a concern for our fellow citizens and an ambition that we could turn that concern into something real, that liberated them in every sense. And that is the critical difference between the consensus triggered by Beveridge and the consensus triggered by Mrs Thatcher. Beveridge’s consensus was ambitious, the consensus of Thatcher, Major, Blair, Brown and Cameron is unambitious. It says that government cannot make the difference, it says that all we can do to help business is to back out – that all that businesses need is the free for all of Beecroft, that all our economy needs is another inflated south east housing boom, that our infrastructure needs will be met by unaccountable monopolies doing it in their own good time. That consensus has failed, utterly. The Beveridge consensus is a Liberal legacy not just because Beveridge was a Liberal but because its motivations are Liberal. Its ultimate demise was due to the fact that those who took ownership of the consensus were simply not Liberals. Dare I say that Labour’s embracing of that consensus owed most to the fact that a large welfare state and public sector pandered to their inbuilt tendency to want to control people. And that the Conservatives support for that consensus owed most to the Tory patrician tendency to want to sedate an otherwise restless proletariat. Political ideologies that are on their way out, tend to mark their demise with unmistakeable events. Communism in eastern Europe died at the fall of the Berlin wall. The post war consensus died at the winter of discontent in 1978/79. The Thatcher / Reagan economic experiment surely should have died at the collapse of the banks in 2008, yet somehow that corpse is still twitching. The financial crisis was the clear physical proof that the economic experiment that supplanted the Beveridge consensus had failed utterly. But don’t misunderstand me, the Thatcherite consensus that Cameron sustains and Miliband has no answer to, has been demonstrated to have failed not just in the crash of 2008 and the poverty, misery and inequality it has inflicted, but also in the absence of so much of the infrastructure we need to plan for the future. Lets just be honest and acknowledge that we still have pathetic rail links, a massive housing shortage, a massive skills shortage, laughable broadband connectivity, an appalling energy crisis and the ultimate crisis of climate change. The Thatcherite consensus has damaged our society and it has weakened our economy. Conservatives have often talked about their admiration of Victorian values – if only they really did admire those values, because Victorian values included ambition to build an infrastructure, to create a transport, communications and logistics backbone to our economy, to make a difference, to see a problem and not worry about whether fixing it would fit with your ideology, but to just get on and fix it. There is no point lamenting that the past was better, that’s UKIPs job, there have been so many deliberately missed opportunities, but we are where we are. What matters now is that we must be clear that a new consensus is about much more than putting healing balm on our country’s wounds, its also about rebuilding and strengthening us for the long term. So our new consensus must be based on a belief in active, can do government whose focus is on tackling the biggest challenges we face in the confident belief that we can overcome them. Housing need may just be the greatest of the evils that we face. The atrophy of our social housing stock over the last 30 years, the staggering rise in house prices in the last 20 years, the burgeoning class of people who own more than one home and a failure of supply to meet demand means that Britain is in the midst of a deepening housing crisis. If bread had risen in price by the same proportion as housing costs since 1980, then a loaf of bread would today cost you £8.50. The average deposit for a first time buyer in the early 80s was 12% of their annual income. The average deposit for a first time buyer today, is 83% of their annual income. So while 1.6million privileged people have a second home, the number people in housing need is growing by the week. Getting on for 3 million adults under 35 now live with their parents and that will rise by a quarter by the end of this decade. . This means that as I speak there are across the country families living in damp, unsafe, overcrowded, expensive hovels; people on reasonable salaries in London priced out; businesses robbed of a workforce because of a lack of decent housing for working age people…. To solve this problem will take more than a few tweaks in planning, it will mean making a choice. Choosing to build 3 million homes in 10 years, because nothing less will solve the problem. We should make that choice. Our choice should be to embark on the largest social housing building programme since the 1950s, to create fresh places, new communities, homes fit for families. We don’t have to do this of course, there is an alternative - but it is to permit the deepening and widening of human misery, to rob another generation of its potential, to limit our citizens and to hold back the economic growth that a mass building programme would bring. It is an alternative that the other parties by their inaction appear to have chosen. But it is an unacceptable choice, it is an appalling alternative. So lets build 3 million homes. Over the last year I have been working with the Joseph Rowntree Reform Trust, joining others in developing solutions to this crisis. Talking with the experts I’ve heard a lot about why the previous administrations failed to build homes. Some say it’s planning, others finance or land prices and availability, or infrastructure, others say politicians showing a lack of leadership – the truth is its all of these and more. One thing is for sure, when you are faced with a giant evil like our housing crisis, you need a decent plan. That plan should include at least 5 new garden cities designed and built by the brightest minds. But not just garden cities, also fresh places of anything from a thousand homes upwards. Any community big enough to support a primary school, is big enough full stop. And the plan should be underpinned by a housing investment bank to draw in private investment, simplify public investment and support innovation. There can be no progress without immediate and bold action to increase the transparency of our broken land market – and a tax system that flushes out land and makes it affordable. We can’t let vested interests continue to block that reform. Chomping at the bit to build at this very moment, are the Housing Associations and local authorities. Lift the cap on borrowing for both of them, and let housing associations build mixed settlements to cross subsidise, give them full access to the full range of government finance guarantees and let them off the leash. And while we’re at it, councils must have the right to suspend the right to buy – so that we don’t lose with one hand what we gain with the other. To build fresh places needs the training of fresh people. There must be an immediate launch of a large scale training and apprenticeships programme, to meet the skills shortage to get the job done. All of this takes leadership. It is going to upset some people. We must respect those people, but we must do it anyway. We need to face up to the fact that opposing new homes can be the politically easy thing to do but that supporting them will normally be the right thing. At the heart of this must be a recognition that housing has got too important to leave to a broken market. That means that government investment needs to underpin a new generation of homes that reflect the diversity of need: social rented, shared ownership, shared equity, homes where every rent payment goes towards owning the house. Fresh places, with an aging population cared for and young people given a chance. A worthwhile political consensus does not come about in a consensual manner. They may have established a consensus, but Beveridge and Thatcher were not consensual figures, they were driven, unreasonable, determined, uncompromising. Our new consensus will also need to be fought for and won. We will achieve that consensus by winning arguments and democratically defeating those people who disagree with us! Be encouraged, because the demographics show that there is an incoming tide of support. Remember, the generation of citizens who have been locked out of stable housing, unable to buy, ranges up to people well in to their 40s now. People who didn’t get the chance to buy before 1997 and who aren’t wealthy, or clients of the bank of mum and dad, are – to use the technical term – stuffed, when it comes to owning a home. More than half the working age population are now in the age group that has been excluded. Politicians have ignored the plight of those people because by definition they are younger, more transient and less likely to vote. Whereas the sections of society whose housing situation is comfortable and who see no need for action, are also by definition older, less transient and much more likely to vote. But with the passage of time, this is no longer the case. The disenfranchised demographic, the excluded millions includes many who are my age now, who are middle class, vocal, locked out and angry. They – and their parents – are looking for a party that understands their anger and is uncompromising about providing a bold solution. They are the shocktroops of a new consensus, and they are ours if we want them. Let’s want them! Here’s something not a lot of people know: The Lib Dems have ensured the first net growth in the social rented housing sector for almost 40 years – its not even remotely enough, but it’s a significant turnaround. Anyone who thinks the Tories would have done this without us probably needs to sober up. We need to be quite a bit prouder and more resolute in the defence of those things we have done in this last 4 years. Something else that wouldn’t have happened without the Liberal Democrats is HS2. I am an unequivocal supporter of HS2, it will be worth every penny of the £50billion we are spending on it – but the official reason given by government for this project, is the wrong one. We are told that HS2 is all about faster journey times. That’s not the issue to be honest – the killer argument in favour of HS2 is that it massively increases capacity. Train journeys between north and south are reasonably quick. It takes just two and a half hours for me to get from the Lake District to Euston. The problem is capacity. We’ve spent £10billion in the last few years just upgrading capacity on the west coast mainline – and its full again! HS2 provides that answer and it unlocks greater potential from the midlands and the north of England. The alternative to HS2 would be to build hundreds of miles of additional motorways, at much greater cost financially and to our environment with fewer benefits to our economy. So HS2 is right… but on its own, it’s one-dimensional and a little patronising - as if all we northerners need to achieve fulfilment, meaning and economic growth is to be able to get to London a bit more quickly and a bit more often. But London’s housing problem, its genuine cost of living crisis, the immense strain on public services in the capital and the social problems and economic underachievement that blight too much of the rest of the UK are all linked. Britain’s biggest problem, and the key to slaying most of those giant evils, is that London matters far too much for Britain’s good and far too much for its own good. So, while the right argument for HS2 is about capacity not speed, the argument for HS3, 4, 5, 6 is about speed. A high speed link between Hull and Liverpool, through Leeds, Bradford and Manchester; from the west country, from east Anglia to the midlands, from wales to the midlands and the north, from Carlisle to Newcastle; connecting our great towns and cities to one another; connecting east and west as quickly and as seamlessly as we connect north and south, that is where our focus must be and we must start right away. The wasted potential of the UK outside London is our greatest threat and our greatest opportunity. That our largest city is seven times bigger than our second largest is utterly crazy. City deals and greater devolution to the cities, shires and regions of England is right, as Liberals we should be passionate about doing that. But how passionate can we really be about devolving power, if we are not also spreading and sharing wealth and investment. We must use the talents of all of our people, and we must exploit the potential of all of our places. Moving government departments out of London to other cities does no harm, indeed it does some good – but it is not transformational. Building an ambitious infrastructure to make every part of Britain matter to business and to the wider economy, that is transformational. Let’s also stop fixating on London and the south east as the place to build extra airport capacity – that capacity should be provided, but it should be provided in the north of England or the midlands. And its not just about transport communications either. Parts of my constituency are still on dial up to get on the internet. Most of my constituents count themselves lucky if they can get above 2mbps download speed, and if they are in business that means that they have to cope with upload speeds that are a fraction of that. This problem is not restricted to the lake district – it affects large parts of London and other urban areas too. I noticed the local Labour MP complain recently that residents and businesses in Shoreditch are on less than 2 mbps! The last time I checked, Shoreditch was relatively urban… Connectivity across our country is substandard and patchy, and that is a massive problem. Because people do not need to crowd into or near to the capital, and rent or buy at exorbitant prices, struggle to get their kids into a decent school, struggle to get by on what looks like a decent salary but isn’t in reality given the costs of living there… they do not need to do that if instead they can make a good living in Yeovil, Norwich, or Preston… and the key to that… is broadband. World class broadband gives businesses and families the capacity and the option to locate where they choose, to have quality of life and quality of location. The fastest connection speeds in Europe are in Lithuania – with average speeds of 37mbps, twice that in the UK. Of course the Lithuanian government still part own their telecommunications industry. They identified the problem, the solution and the resource, clicked their fingers and made it so! That has not happened here and its holding us back. Beveridge would have no time for excuses, he’d get just this fixed. We should be the same. I have no desire to re-open the stale arguments over privatisation and nationalisation. But I have a strong desire to open up new arguments about control. I want government to be able to get things done. It has always bemused me that you get some conservative politicians who have been very successful business people, admirably so, and have been successful because they have led their firm in an effective way, with a level of command and control… and then they get into politics and seek to break all the levers that they could have used in order to be effective on behalf of the country, by selling things off and deregulating. But there is nothing socialist about wanting government to be effective. Maybe it was right to sell off BT, but it was immensely damaging for the government to throw away any ability to manage the network. So let's not renationalise BT. Sorry. Let's do something cheaper and better. Let's pass an act of parliament to create a universal service obligation of 100 MBPS by 2020 on every property in the UK. South Korea’s stunning, world beating leap towards offering a 1,000 MBPS (a gigabite) from 2017 is built on the creation of a universal service obligation. So lets not wait for the un-free market to move at a snail’s pace towards a solution that will only end up being inadequate any way. Lets instead make it so, lets connect the country properly. Britain’s greatness was built on the Royal Mail and the railways - lets today do it with fibre optic cables. Can-do, ambitious government. It's vital that we have renewed housing and infrastructure and stop wasting the potential of the places outside London… and its vital that we also stop wasting the potential of our people in every part of the country. Beveridge identified idleness and want as two of his giant evils – and named full employment and the welfare state as the answers. Idleness sounds judgemental doesn’t it – I don’t think he meant it like that. He simply identified the fact that millions of capable people out of work, was a waste of resources as well as being inhuman. And that’s how it struck me. I hear a lot of commentators writing piously about the 1980s, well like many of you I had a front row seat on the 1980s. My sister and I were raised by our Mum in a terraced house in Lancashire, no heating, no holidays, my Mum out of work from time to time – and half of my mates with their parents out of work for much of the time too. And the thing that struck me most of all when I saw the absence of work, and the absence of hope – was what a waste, what a waste of wonderful people. So yes, I have a bleeding heart – but I also have a level head, and when I see this country failing to make best use of the potential of our greatest resource – our people – then I say that this is not just morally abhorrent but also utterly stupid. I owe my Mum a lot, its ten years since she passed away – far too young at 54 after a fight with ovarian cancer. Amongst the things I owe her is the fact that those years were in fact immensely happy. One of the marks of excellent parenting is when your children only realise in hindsight that they had grown up in poverty when they look back many years after they’ve grown up! So, it didn’t feel like I grew up in poverty, and it didn’t feel like I had my opportunities curtailed, essentially because of my Mum’s dignity, self respect and aspirations to escape those hard times. But for lots of the people I knew, that was the case. Their backgrounds defined and dictated their futures. Many of my mates identified fully with the "no future" nihilism of Johnny Rotten and co – that’s if they thought of it at all, so many just accepted their lot. Looking at it from my experience and back ground, I am angered by the appalling rhetoric of Miliband and Osborne – setting the shirkers against the strivers, talking about those whose curtains are closed as their neighbours leave the house to go to work, consumed by bitterness. A new consensus must be built around full employment, but not about setting working poor against the workless poor for short term political gain. And we must rejoice in being a country that is committed and uncomplaining about supporting those who cannot work. When the Samaritan crossed the road to help the Jewish man, he didn’t make a judgement as to whether this guy was deserving or not, he identified his need and out of compassion and duty he met those needs. Those are British values, we should be proud of them, they must be integral to our new consensus. But we must use the talents of everyone in Britain, which doesn’t mean that no one will ever fail. What is unacceptable is that so many people are destined to fail. And we all know that people’s destinies are so often settled before their lives even begin – that your background dictates the limits of your opportunities is an outrage…but a crushing reality. Again, let's clarify the source of our outrage: we are angry that poverty, poor housing, limited education locks out millions. We’re angry because its unfair, its morally wrong, but our anger is heard headed as well as soft hearted. Poverty and the lack of opportunity is the squandering of our human resource. When we invest in beating poverty, we build the backbone of an economic renaissance. You will hear ministers on both sides of the coalition saying that work is the best route out of poverty and they are dead right. Or at least they would be if working for a living gave you enough to actually get you out of poverty. But for millions it doesn’t: families with children where at least one parent works have now become the largest group experiencing poverty in the UK. What a disgrace. So a living wage must be central to stopping the scourge of in work poverty. We must set a target for every breadwinner to be paid a living wage by 2020. Labour and the Tories are too timid to say this, because let's be honest there are good reasons to be equivocal – its just that those reasons are not as strong as the reasons to take that bold step. We should take the lead, knowing that this is achievable. Because we have to defeat real poverty – not just the definition dreamt up by the government of the day. Labour in government focussed too much on just shifting the very poorest beyond an arbitrary baseline and hailing this as the defeat of poverty. What a load of rot. Massaging statistics through ESA payments and tax credits is not an ambitious strategy for defeating poverty. It achieved nothing except locking more people into dependency though allowing the Islington chattering classes to feel a bit less guilty, while poverty still stalked the land wearing a New Labour disguise. Labour’s sophistry was not just dishonest, it was expensive too – a living wage will render all that unnecessary, giving the government the wherewithal to help employers with tax exemptions to help them afford wage rises. 18 million people cannot afford adequate housing, 12 million people are too poor to engage in common social activities, one in three people cannot afford to heat their homes adequately in the winter and four million children and adults aren’t properly fed by today’s standards. I’m ashamed of that. Complacency, acquiescence and self-righteous anger matched with no action, make us utterly culpable. No wringing hands, time to roll up sleeves. We have more low paying, low skilled jobs than most countries in the developed world. When UKIP and the Tories complain about broken Britain – we must reply that it is broken, just not in the way that they think, and it is broken because their lazy laissez fair apathetic economics allowed us to drift into this dismal situation. Low paid, low-skill work holds back UK productivity, our productivity is behind most developed countries. Its not immigration or Europe that hold us back, in fact they help us. What holds us back is decades now of unambitious can’t-do government. Let’s call an end to it. If you are pro-business you must be actively anti-poverty. If you ran a company and only made full use of 20% of your staff and 20% of your premises, you’d be an unsuccessful fool! But that is Britain – While we focus on London and the south east and under-utilise the rest of Britain; while we pour opportunity upon opportunity on a minority of people who live in the right place, went to the right schools, have the right parents and restrict opportunities in varying degrees to everyone else; we prevent Britain being all it could be. Liberals invented our welfare state, our health service and the notion of active government because we saw and see that ignorance, idleness, want, squalor and disease are indeed evils and that they are not just evils per se but they are evils because they rob people of their ability to be all that they could be. So, we must build the homes we need, create the infrastructure to unleash the wasted potential of our country, end poverty to unleash the wasted potential of our people… but the new consensus will be worthless if it is not underpinned by radical action to tackle climate change. Climate change is the existential threat. Climate change deserves a lot more attention that I can give it in this lecture. But I want to be clear that our economy, security, all of our hopes and dreams rest on whether we will choose together to fight climate change and whether we will win that fight. Today around 2000 babies will be born up and down Britain. By the time they reach old age, they could see the global temperature rise by 7 degrees. In their lifetimes, we will see whole nations displaced; farmland deluged; industry devasted. The challenge is massive and the answers not quite as simple as we’d like. But surely the overriding answer is to think big and to act fast. Let’s consider the potential we are wasting. Especially in tidal and hydro energy. We live on an island with more tidal estuaries than you can count and 95% of the hydro energy supply chain is British. Solar, wind, tidal, energy efficient projects all play a part, but large scale civil engineering strikes me as being the best way of tackling a large scale environmental crisis. And we need to keep winning the argument. It would be marvellously convenient if either climate change wasn’t happening, or it didn’t matter or it was unstoppable… so convenient that even reasonably sensible people are easily suckered into inaction, if not down right denial, and just get on with their lives. A new consensus must be established that climate change is the greatest physical threat we face, we must humanise the consequences, stop talking to each other in technical terms but terrify the living daylights out of people with the truth. Climate change’s horrendous impact on your home, your family, your community, your income, your security are less than a generation away. There is nothing esoteric about the human misery that is coming our way if we do not act – the forced mass movement of hundreds of millions of people, the famine, the industrial collapse, the violent conflicts over ever more precious land. If we do not win the arguments, we will not win the right to overcome this challenge with the action we all know is needed. And the action we need? Well, the unregulated market will not achieve it. A market freed from the dead hand of uninspired complacent monopoly can, a market that responds to government led investment through a hugely expanded green investment bank can. So, there have been two consensuses since the war. We should boldly proclaim the start of the third. The Thatcherite consensus keeps breathing because for a failed idea to truly die, there needs to be something new to replace it. So let us be as audacious as Thatcher, as audacious as Beveridge, let's step into the void and make the Liberal Democrats the new visionaries. Let's build a new consensus… Of course consensus is all about consent. Not that all the political parties consent, but that the people consent. So we must win the consent of the voters for a government that is active, ambitious and liberal. And consent to the notion that taxation is the subscription charge we pay for living in this civilised society. That there is zero tolerance socially or legally for cheating the community by not paying your subscription charge in full. Government is about leadership, making a difference, not abdication. I’m fed up of seeing us fail to meet our potential, to take the lead, to innovate, to be the best because governments continue to buy the lie that the job of government is to get out of the way. Who gets involved in politics just to sit and watch the weather? Let's make the weather. The Social Liberal, Economic Liberal axis is flawed. We must be both. We must be comprehensive Liberals. Let's say no to passive, neutral government that allows the evils of our day to grow unchecked; let's say no to authoritarian, intrusive government that becomes an evil in itself by subjugating its citizens; instead let's say a huge yes to active, ambitious, liberal government. We are Beveridge Liberals, because like him we have the audacity to believe that government is for making things better not watching things fail. I love winning elections, not because I want to hold office but because I want to make a difference. We have been unselfish as a party this last 4 and a bit years – putting the country’s needs ahead of our own. But the time has come to be selfish, because it is in Britain’s interests that the Liberal Democrats survive and then thrive and then lead and build a new consensus for a can-do government that will end the waste of most of Britiains people and most of Britains places. So when you are digging in for dear life to defend our council and parliamentary seats this next nine or ten months, just remember what it is you are defending. You are defending the future, you are defending a dream of a better, stronger, fairer, greener more decent Britain, you are defending the legacy of Beveridge and the chance to make history again, to slay the giant evils, to build a new consensus. › Miliband defines his programme: big reforms, not big spending Subscribe More Related articles Peter Mandelson: I pray every day for an early election to end Labour's awful state Jeremy Corbyn to tell members: "Prepare for a 2017 general election" What will Labour's new awkward squad do next?