These are tough times for our country and its people. After the shock of the global crisis and the scale of public debt which followed in its wake, it would have been hard enough in a benign global context to get our own economy moving, but now the perilous situation in Europe makes it much harder. Although the recent fall in unemployment is welcome, the combination of low salary increases and rising costs for essentials such as fuel, food and transport mean we are seeing a continuation of several years of falling living standards, something which tends to impact most on the least well-off in our community. And we are still relatively early in the process of reducing the public sector deficit.
This crisis is not just economic it is also political. Across Europe there is a trend towards more extreme parties advocating quick but unrealistic fixes to problems of public finance and economic competitiveness which require patience and long term adjustment. As we have seen, markets often react badly to political instability, worsening the situation and threatening to create a vicious cycle.
Here in the UK there are genuine differences between the Government and the Opposition about how we got to where we are and what to do about it. These debates are a healthy part of democratic debate and will continue, however, as the leaders of the three largest Westminster Parties we believe it is the occasion to put our differences to one side to agree an immediate policy response to the situation in which the country finds itself. More importantly, we are coming together in the hope that our example can encourage others in our nation to respond.
We, together with our respective economic spokespeople, are working on an action plan to give an immediate boost to our economy. On the one hand, this means the Coalition is recognising the need to respond to the economic crisis, on the other, it means the Opposition underlining its short and long term commitment to addressing the UK’s public finance deficit.
In essence, our package combines a cross Party commitment to bring down the deficit year on year and to aim for fiscal balance by 2017/8 with an agreement to a substantial and immediate increase in capital spending, focused on housing and infrastructure. The injection of capital aims to boost the economy as well as addressing housing need and infrastructure priorities, while the cross Party agreement to a tough programme of deficit reduction signals to the market the strength of political will to tackle the underlying fiscal challenge.
As a token of its commitment the Opposition have indicated a willingness to allow its own fiscal plans to be reviewed and publicly assessed by the independent Office of Budgetary Responsibility in light of its commitment to deficit reduction. As a token of its commitment to national unity the Coalition have agree to work with the Opposition leader and Shadow Chancellor to agree the make-up of the capital investment package we will be announcing in the next few days.
In working together at this time the Party leaders hope also to mobilise the wider efforts of the British people. Whilst regulation and taxes play their part, we believe that much can be done on the basis of national commitment to tackling these issues together. In this regard we are calling on banks to step up efforts to make funds available to business for investment and growth. We are also calling on those many corporations with substantial reserves to be imaginative and bold in seeking to invest in new activity within their own firm and in promising new businesses in their own and other sectors.
Recognising the experience of other countries – such as Germany and Sweden – we are also calling on employers, employees and employee organisations to work together to try to ensure the minimum loss of jobs and the maximum creation of jobs. Within the constraints of fiscal policy we are open to suggestions from social partners as to shifts in policy which could assist strategies of employment maximisation.
More broadly, at a time when local authorities and other public agencies face difficult funding decisions, we call on citizens to recognise the vital role we can all play in making public investment go further and in strengthening community life; whether through supporting our local school or hospital, being a community volunteer or a caring neighbour. It is through tapping into the resilience and generosity of our citizens that this can be a time of renewal as well as challenge.
Celebration with purpose
The next few months will be a time of great celebration and pride for our country. We will be the centre of world attention with both the celebration of the Queen’s Diamond Jubilee and the Olympics and Para-Olympics.
In making this unprecedented joint statement it is our hope that this time of celebration and excitement can also be a moment of renewal in which we tap into the deep well of goodwill, creativity and resilience which is at the heart of our national character.
Leading up to the next general election in three years’ time we and our parties will offer different ideas of what is best for our country, indeed the Opposition and the Coalition continue to have very different views on many current policy issues. But as leaders we all three share a conviction that we can and should seek to contest the next general election against the backdrop of a country which feels confidence and hope for the future.
PS By the way, as part of our commitment to courage and good causes we are all donating £10 to Matthew Taylor’s mountain marathon appeal on behalf of that great institution the RSA. After all if an old timer like him can run 30 miles up a mountain carrying a full back pack then surely anything is possible.