A Shared Resolve

Rt Hon Danny Alexander MP 10.55am

This Coalition Government is delivering on its founding purpose – returning this country to a path of prosperity that is sustainable for the long term. Both the Liberal Democrats and the Conservatives should be proud of the decision we made to put the national interest before party politics. It wasn’t easy, but it was the right thing to do.

With massive market turbulence across Europe the backdrop to the election, both parties knew that economic stability could not be achieved without political stability too.

This historic decision and our shared resolve to tackle the deficit have resulted in interest rates staying low – keeping families in their home and workers in their jobs. Getting ahead of the curve on dealing with the deficit means that despite having a deficit larger than Portugal, UK government-backed bonds still attract interest rates that are as low as Germany’s. We have established financial discipline, motivated not by ideology, but because it is a vital precondition for effective government.

But recovering from the catastrophic legacy left by Labour cannot simply be achieved by tackling the deficit. Not only was the way of life they promised unaffordable, it relied disproportionately on the square mile of the city of London and an unsustainable house price bubble. Gordon Brown vowed to end boom and bust, but in the end presided over both.

We must ensure the lessons of Labour’s failure are learnt for good. Which means rebalancing the economy as well as tackling the deficit, and being straight with people about how long this will take, how hard it will be and what we will do to get it right.

Laying strong foundations for prosperity requires an economic strategy that invests in the future to deliver growth that is sustainable, balanced, competitive and fair. This strategy must seek to unlock our economy’s potential in every sector of the economy and in every part of the UK.

As a government that means prioritising infrastructure investment, as we already have in the Spending Review. The projects getting the go ahead have been assessed and selected on the basis of the economic benefit they will bring. As a result, we are spending more on transport infrastructure over these four years than Labour managed in their last four, which will help support businesses and growth across the entire country.

But we also realise that it is not possible just to impose growth from the centre. This government must also help local businesses and communities drive economic growth too. To this end, at the Liberal Democrat conference, I announced the launch of a £500 million Growing Places Fund. This money will go towards helping kick start developments that have been identified locally that are currently stalled by tough market conditions, difficult cash flow and a lack of confidence.

 Of course, our focus on supporting growth isn’t just about spending money – government must break down the barriers that regulation puts in the way too. The Red Tape Challenge is proving effective at identifying unhelpful and expensive regulations, but the government is tackling more controversial barriers too. That is why we must press ahead with our planning reforms. The current system means it can take years for development to get off the ground. A presumption in favour of sustainable development will ensure local protections are in place, but will help deliver much needed local homes and jobs.

Delivering growth also means looking beyond local and national horizons. Trade is vital too. In the 1980s, Britain led the agenda in developing the European Single Market, helping to create hundreds of thousands of new jobs. The Eurozone crisis means it’s now more important than ever that they deepen their integration, and for our own sakes it’s important we support them, to ensure we can continue to progress ensuring all areas of the European economy are open to British Business.

Finally, investment in the future also means investing in people – giving them the best opportunity possible to prosper. Raising the income tax threshold makes work pay better for millions in jobs on low incomes. Investment in apprenticeships and work experience placements is helping young people get started in a tough labour market. And even at the youngest age, the Pupil Premium is helping children from the poorest backgrounds get the best start in life.

We are putting this country on the path to prosperity for the long term, as well as introducing immediate incentives for growth. The years ahead will not be easy, and the economic storms surrounding us are still raging, but this government will not be distracted from its goal – a more prosperous future for us all.

Rt Hon Danny Alexander MP is Chief Secretary to the Treasury. This article first appeared in the most recent publication of Reformer, the journal of the Tory Reform Group.

 Share this article on Twitter