My speech today is about the deficit.
Its place in our priorities.
How a progressive government would deal with it.
And how we would do so consistent with our values.
Eight days ago in the Autumn Statement, it became clear what the Tory plan for the country is.
They promised to clear the deficit in this Parliament and they have failed.
Now they say they want to run a big surplus by the end of the next Parliament.
And their plan is to return spending on public services to a share last seen in the 1930s: a time before there was a National Health Service and when young people left school at 14.
There is only one 35 per cent strategy in British politics today: the Tory plan for cutting back the state to that share of national income.
They have been exposed by the Autumn Statement for who they really are.
Not compassionate Conservatives at all.
But extreme, ideological and committed to a dramatic shrinking of the state, whatever the consequences.
They are doing it not because they have to do it but because they want to do it.
That is not our programme.
That will never be our programme.
And I do not believe it is the programme the British people want.
But the British people do want to know our approach.
And today I want to set it out.
We start from the clear facts that the government, on behalf of all the people of Britain, underwrote and saved the private banking companies who caused the financial crash, believing that not to do so would have worse consequences for us all. This country needs a long-term plan to make the country work for the majority, but it has only been the privileged few at the top who have felt the benefits of the resumption of economic growth in Britain.
Now, some people have argued that who caused the deficit simply doesn’t matter when we are thinking about how to cut it.
They are wrong.
It matters.
Because unless those who most enjoyed the good times, whose reckless speculation and pursuit of profit above all other things, pay back their real dues, then it will be the people of this country and the cherished public services we have defended for three generations who will be sacrificed. This will harm us and our society. It will be harmful to our economic stability. It will be harmful to social cohesion.
And it is working people who will end up paying the price in the economic instability that is created.
Dealing with our debts is also necessary for funding our public services.
Higher debt interests payment squeeze out money for those services and for investment in the long-term potential of our country.
So there is no path to growth and prosperity for working people which does not tackle the deficit fairly and decisively.
But what we need is a radical approach, which deals with our debts, but does so in a way that does not punish the people of this country any further.
Today, I want to lay out the principles of a genuine and radical alternative.
Not a shadow Budget, but a sense of how a government that will not decide policy by focus group, will approach the key issue of our time.
This is the central contrast between our approach and the Conservatives’:
We will deal with our debts but we will never return to the 1930s or the 1990s and 2000s, when we were wrong to be relaxed about people becoming filthy rich.
We won’t take risks with our public finances but we won’t take risks either with our public services, our National Health Service.
Our tough and balanced approach will balance the books through an economy based on high wages and high skills, common sense spending reductions and fair choices on tax.
Their unbalanced approach of 1930s public spending and unfunded tax cuts will put at risk our National Health Service, undermine our economic future and threaten working families.
Today I want to lay out the five real policies which will show that my words are not merely rhetoric but show that we have principles and that we have learned from the mistakes and missed opportunities we had while we were a New Labour government.
Our first policy is that we will set out now credible and deliverable cuts to help deal with our debts while protecting public services.
This starts with an end to the Trident nuclear weapons system. We will defend services from real threats and we will defend our country from real threats. Our nuclear weapons are obsolete and act as no deterrent to the very real threat of terrorism that we face today from extremism.
We will also scrap the planned HS2 rail line. At a time when we can work online, at any time and in most places, the need to get from one British city to another faster than the 125mph our quickest trains currently manage matters only to elite business people. What most of us want are reliable buses and trains serving our local communities, not a white elephant of a project that will serve only those who will be able to afford what will be very expensive fares.
Removing these two items from public spending will be essential if we are to prevent debt interest payments mounting up.
The second policy is that a successful deficit reduction strategy depends upon reform of our economy.
That is the biggest lesson of the failures of this government and New Labour.
For some time, I have heard people claim that our economic argument around the cost of living crisis has been missing the main economic challenge, of tackling the deficit.
But the facts are now in: it turns out that tackling inequality is the key to tackling the deficit.
Last week, the Office of Budget Responsibility confirmed that income tax and national insurance receipts are £43 billion a year lower than forecast in 2010.
Sixty percent of the drop in tax receipts in the last year is because of weaker wage growth but we are also seeing the corrosive effect of tax avoidance. Where tax can't be avoided is if we are willing to tax wealth, not income, making it far harder for corporations and wealthy individuals to avoid paying their fair share to society.
Putting our young people back to work will improve tax revenues and cut the social security bill but we need to move beyond that to ensure that those who are most able to pay do so. Britain bears a great responsibility for a number of tax havens around the world. It is time to make the kind of tax evasion and avoidance that is routine in the corporate world becomes unacceptable to the British public.
We'll raise the minimum wage to £10, end the scandal of zero-hours contracts and ensure people have the right to fair pay, a value enshrined in United Nations Universal Declaration of Human Rights.
And reforming the banks, requiring them to make an ongoing contribution that reflects the size of the problem they have left the people of Britain with, a public works programme to tackle and mitigate the effects of climate change that will provide job and training opportunities for those who have found it most difficult to find work with low skills. We'll rebalance our approach to businesses of tomorrow: with our focus on small and medium sized businesses, not the large multinationals that least need our help.
This is the modern agenda for both successful businesses and social justice.
And there is a lesson for Labour here.
The last Labour government increased spending year on year, but year on year inequality increased. We didn't get it right. We could have done more.
That option will not be available to us but an ongoing commitment to reduce inequality in our society, with a clear statement that we will, year on year, used the proceeds of progressively higher taxation on the very richest to fund the boost in spending power that a citizen's income would provide for the majority of us in a way that would benefit communities up and down the country.
Our third policy is that Britain needs common sense taxation, not a vastly overcomplicated system.
We can tax wealth in a way that redistributes it year on year from a minority who hold the most, to the majority who hold the least. We know that if wealth was spread fairly in Britain, every child, woman and man would hold a £135,000 share each. That is more than many families can even dream of.
Here we should take inspiration from what the radical 1945 Labour achieved and believe that another world is possible.
We will devolve unprecedented levels of spending from Whitehall to local and regional government over a whole range of areas, including transport, skills and back to work programmes.
Local government leaders rightly want control over these budgets.
They know those budgets will be smaller than what is spent at the moment.
But they know they will make better decisions because they are local decisions that suit local needs.
And just as we need to spend money better by giving power to local people, so too by breaking down the old bureaucracies.
Our fourth principle is that we should ensure that those with the power to influence others in our society will no longer be able to scapegoat, blame or attack the most vulnerable.
It was not immigrants who crashed our economy. It was not those claiming Disability Living Allowance. It was not those claiming unemployment benefit. This crash was caused by those with the most wealth, who were hellbent on amassing even more. Let's make sure we always remember who caused the problems.
Our fifth policy is that this party will only make promises we will keep.
The promises we make now will shape our society for the next century, not just the next five years. To tackle the problems of the 21st century, we need real radicalism. We promise not just a Tory-lite approach to austerity, but the alternative. We present it to you the British people so that country has a real choice at this election.
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