Thank you for coming this morning.
The issue I want to talk about today can be summed up in a couple of stories.
While out campaigning during the local elections, not for the first time, I met someone who had been on incapacity benefit for a decade.
He hadn’t been able to work since he was injured doing his job.
It was a real injury, and he was obviously a good man who cared for his children.
But I was convinced that there were other jobs he could do.
And that it’s just not right for the country to be supporting him not to work, when other families on his street are working all hours just to get by.
The other story is about people in a very different world from that man.
The story of Southern Cross care homes – where millions were plundered over the years leaving the business vulnerable, the elderly people in their care at risk and their families feeling betrayed.
Those elderly people were treated simply as commodities.
This story shames our country.
And there is a link between the man on incapacity benefit and those executives at Southern Cross.
What is that link?
That these are people who are just not taking responsibility – and the rest of us are left picking up the pieces.
It’s not about responsibility to the state, or the government, but responsibility to your neighbours, your friends and many others who you may never meet but who are affected by your actions.
For my party, these two stories point to some hard truths about what people think about us and what we must do if we are to win their trust again.
For too many people at the last election, we were seen as the party that represented these two types of people.
Those at the top and the bottom, who were not showing responsibility and were shirking their duties. From bankers who caused the global financial crisis to some of those on benefits who were abusing the system because they could work – but didn’t.
Labour – a party founded by hard working people for hard working people – was seen, however unfairly, as the party of those ripping off our society.
My party must change.
We were intensely relaxed about what happened at the top of society.
I say – no more.
We must create a boardroom culture that rewards wealth creation, not failure.
To those entrepreneurs and business people who generate wealth, create jobs and deserve their top salaries, I’m not just relaxed about you getting rich, I applaud you.
But every time a chief executive gives himself a massive pay rise – more than he deserves or his company can bear – it undermines trust at every level of society.
We cannot and we must not be relaxed about that.
We did too little to ensure responsibility at the bottom.
I say – No more.
We will be a party that rewards contribution, not worklessness.
If you believe in wealth creation and the welfare state like we do, we must acknowledge the only way to protect both of them is through responsibility.
We must be once again the party of the grafters.
And these stories are not just important for Labour. They are important for the country, too.
When I think about the kind of country I want my sons to grow up in, it is a country where they — and millions of their generation — can do better than their parents.
It’s what I call the ‘promise of Britain’ – that the next generation does better than the last.
But what does a better life mean?
Better in terms of jobs, housing and the material things that matter. Of course.
But better for me, and indeed I think all of us, is not just about the material – not just about earning money and owning things.
Because that doesn’t tell us anything about the feel, fabric and character of our country – or about the most important thing in life, which is about our relationships with each other.
That’s what I want to talk about today.
We need to understand the value of responsibility to each other and what it really means.
We need to understand why Labour in government talked about fixing it but didn’t.
Why the Conservative-led government’s approach is woefully inadequate.
And what the way forward is if we are to build a greater sense of responsibility and national mission for our country.
Let me start by talking about why these values of responsibility, of duty to each other, matter.
One of my earliest memories is listening to my father talk about his experiences of Britain during and after the Second World War.
He talked about his life in the Navy — how it brought people together from all backgrounds and walks of life in a common spirit.
He talked of the sense that they all looked out for each other, despite all the things that could have kept them apart.
He remembered most the deep fellowship that helped win the war and build the peace.
When I think about my children, I want them to grow up in a Britain like that.
I want them to understand what makes this country special.
I want them to live in a country where people look after each other, look out for each other, care for each other, where compassion and responsibility to one another are valued.
Tony Blair once said he wanted a country “where your child in distress is my child, your parent ill and in pain is my parent, your friend unemployed or homeless is my friend; your neighbour my neighbour. That is the true patriotism of a nation.”
This patriotism is all around us. We see it every day.
The unsung heroes who make such a difference to the lives of others.
The people who will give up every Friday night so young people have somewhere to go and something to do.
The volunteers who help out the local hospitals at all hours of day and night.
The young men and women who risk life and limb in the armed forces for our protection.
Care, common-feeling and compassion are all around us.
But let’s be honest. We also look around and see how those ties which bind us together have become frayed.
In my father’s war-time generation, people had a deeply-held feeling of responsibility to others.
Today, the overwhelming majority of people – at every level of society from rich to poor – still play by the rules.
Working hard. Paying taxes. Obeying the law. Caring for others.
Good citizens.
But they feel others are not doing the same. They are having to pay the price for the behaviour of an irresponsible minority.
They feel that while they stick to the rules, others are getting one over on them.
It’s part of the squeeze on the middle.
The services on which they rely are being cut by an austerity government after a global crisis caused by bankers who still get multi-million pound bonuses.
The gap grows every wider between the rewards for those at the top and the squeeze on the living standards of everyone else.
And they still have to pay taxes to fund the bankers and to fund some people on benefits who aren’t bothering to work.
People who act responsibly – people who do their duty – are getting angry. And I understand why.
That irresponsibility is not only unfair on everyone else; it is bad for the economy.
And people feel the consequences of irresponsibility in different parts of their lives.
The rubbish fly-tipped by the roadside.
The throb of loud music, played by the neighbour in the small hours.
The overgrown and litter-strewn front garden.
And every time someone acts with casual indifference to the lives of those around them, it undermines the trust of others and frays the bonds which bind our society together.
We should not demonise people anywhere in society.
I do not accept the Conservative characterisation of those on benefits as being feckless and worthless.
The man was I talking about earlier cared about his children and wanted to bring them up right, but the system neither demanded nor encouraged him to do the right thing.
We have a responsibility to provide people with opportunities to improve their lives and escape poverty.
And we have a responsibility to look after the vulnerable.
But those who can work have a responsibility to take the opportunities available.
The same is true of high earners.
It is vital that we reward and nurture wealth creation.
But too often we see people getting pay and rewards which are not linked to what they have achieved.
This isn’t just unfair – it’s bad for business, jobs and our economy.
Take an example. Rolls Royce is a great British business, world -leading, innovative.
Sir John Rose who recently retired as their Chief Executive was a great British business leader – creating wealth and keeping jobs in this country.
In contrast Fred Goodwin, who ran the Royal bank of Scotland, was at the heart of the irresponsibility which led to the collapse of the banking system.
He helped bring our country’s banks to their knees.
And yet at the time the financial crisis hit, Fred Goodwin was being paid over three times more than Sir John Rose.
What greater evidence could there be of the failure to link pay and performance in our boardrooms.
Back in the 1970s, very high rates of taxation put people off creating greater wealth.
The link between pay and performance was broken.
There can be no going back to that.
But the danger today is that pay and performance have become detached again.
Over the last twelve years Chief Executive pay in Britain’s top companies has quadrupled while share prices have remained flat.
And according to the recent High Pay Commission report, just in the last 10 years, the pay of someone at the top of a company has gone from 69 times the average wage to 145 times.
Things haven’t always been this way.
Related
It is worth recalling that JP Morgan founded his financial company on the idea that the ratio of pay between the highest and lowest paid employee should be no more than 20 to 1.
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It isn’t for government to set maximum ratios but we do need change to encourage the responsibility we need.
To carry that out, my party needs to understand where New Labour succeeded and failed.
Those who founded the Labour movement were motivated to do so by the idea that they could achieve more together than as isolated individuals just looking out for themselves.
We continued that tradition in government.
Repairing the fabric of society through investment in schools, hospitals and the police.
But we did not do enough to change the ethic we inherited from the 1980s – ‘the take what you can culture’ of those Conservative governments.
New Labour in office talked about rights and responsibilities.
So, why didn’t we succeed in changing the ethic of our society in the way we wanted?
Because we were not consistent enough in applying these values across our society.
We were too slow to recognise the need for greater responsibility among those on benefits.
And we saw responsibility as only applying to those on benefits, because they were getting something from the state.
That meant the responsibilities of others were ignored – the business executives, the bankers, the Chief Executives.
Just because they – or anyone else – weren’t getting something from the government it doesn’t mean they don’t have responsibilities.
Because the most important responsibility is not to government, it is to each other.
Whether it is not abusing the trust of your neighbour by claiming benefits when you can work….
Or not paying yourself an inflated salary to the detriment of your company, your shareholders or your staff.
So we sent out the wrong message to those at the top of society.
And we all know what happened: the banks acting as if there was no tomorrow and causing the worst financial crisis in a century.
And even after that happened the Confederation of British Industry, the Financial Services Authority and even the Governor of the Bank of England sounded more willing to speak out on top pay than we did.
And we did not do enough either to acknowledge the difficulty in creating a responsible society when there is a huge gap between the rich and everyone else.
When people lead parallel lives, living in the same town but different worlds, we should not be surprised that it’s hard to nurture a sense of responsibility and solidarity.
That is why we have to tackle the new inequality in this country between the top and everyone else.
Now what about the current government and its approach?
On the surface, our responsibility to each other is a big concern of theirs and indeed we hear repeated tirades against people on benefits.
But because of their values — and true intentions— they cannot build the kind of responsibility that I have been talking about.
Just take their current welfare reform bill.
We support their attempts to build on our plans to make those who can work do so.
But their bill will make it harder for people to be responsible.
It undermines childcare support for those seeking work.
It punishes people in work who save, denying them the help they currently get through tax credits.
It cuts help for the most vulnerable, those living in care homes, who receive support to get out and about.
And, it takes away money from those who are dying even though they have contributed to the system all their lives.
None of this will help people show more responsibility.
In fact, it does the opposite.
Nor are they ensuring there is the work available for people who are responsible.
And when they talk about the Big Society, and people showing responsibility through volunteering, they don’t seem to get that you can’t volunteer in your local Sure Start centre or library when it has been closed.
You cannot create a good society – or even a big one – simply with pleas for more volunteers.
Finally we will never encourage a sense of responsibility if society is becoming more and more unfair, and more and more divided.
The idea that we’re all in it together under this government is just a cruel joke.
So what are the lessons we should learn to build the kind of society we want to see?
Above all, it is that responsibility and duty to one another must apply across our country.
We cannot lecture people on benefits about responsibility if we do not also address the problem at the top—in the public and private sectors.
It is why it is right that proper action was taken against MPs who defrauded our nation through their expenses.
It is why corporate tax avoidance and evasion are so wrong and need to be tackled relentlessly.
So how do we change things to ensure a better link between top pay and performance?
As other countries require, we need companies to justify and explain what they are doing.
On pay, companies should publish the ratio of the pay of its top earner compared to its average employee.
If it can be justified by performance, they should have nothing to fear.
We need shareholders to better exercise their responsibilities to scrutinise top pay.
And we also need to recognise – as many great companies do—that firms are accountable to their workers as well as their shareholders.
Some companies already understand that having an employee on the committee that decides top pay is the right thing to do.
We should debate whether this requirement should be extended to all firms.
And of course the same should be true in the public sector.
So we need responsibility at the top of society, but we also need it at the bottom.
Again, the principle should be that we reward those who make a contribution.
I strongly believe in a welfare state that looks after those in need, including those suffering from ill health.
That principle of compassion should always be at the heart of what we do.
That is a view shared by people right across this country.
But if we are to improve the British welfare state, we must reform it so it genuinely rewards people who are responsible and contribute, as well as protecting those in need.
One area where people’s sense of fairness is under threat is social housing.
There is a terrible shortage of social housing in this country.
It will be one of the key tests of the next Labour government that we address this issue.
But we also need to do so in a way that commands public support and respect.
Need is and will remain a crucial test of who gets a house.
But across the country, there are examples of how we can also encourage people to display the responsibility that our society needs.
In Manchester, as well as helping the most vulnerable with housing, they give priority to those who are giving something back to their communities -for example, people who volunteer or who work.
They also look to reward people who have been good tenants in the past and who have paid their rent on time and have been good neighbours.
This approach means that rather than looking solely at need, priority is also given to those who contribute – who give something back.
It’s fairer and it also encourages the kind of responsible behaviour which makes our communities stronger.
It is not about punishing people. It is about rewarding people who do the right thing in their communities.
We are looking at all these issues in our policy review – but this is a principle we will seek to apply so that, as far as possible, the benefits that people receive also encourage them to do the right thing.
Let me end on this thought.
What builds a community and a country is a sense of shared responsibility, common endeavour and big national ambitions.
The Tories have no vision for our country.
No sense of national mission.
No vision for how we can deliver on the promise of Britain for the next generation.
We need a culture in our country which marks a real break with the ‘take what you can’ ways of the past.
I know that there is a yearning for that different culture.
A more responsible economy
A more responsible society
And a sense of common life that offers meaning and purpose.
That is the mission for our party.
That too should be the mission for our country.