Chris Huhne delivers speech on Labour's legacy

Secretary of State for Energy and Climate Change, Chris Huhne this morning delivered a speech on Labour's legacy at a joint press conference with Conservative Party Chairman, Sayeeda Warsi.

Chris Huhne said:

"Labour were once a serious party.

"Whatever our disagreements, Labour wanted to tackle the real problems in our society. Independence for the Bank of England. Devolution to Scotland and Wales. A minimum wage.

"Labour once wanted to prove they could run the economy successfully. They said no more boom and bust.

"But over the 13 years of Labour's government something changed.

"The need for a balanced economy gave way to the needs of the city of London. And when the global economic crisis struck, Labour seemed paralysed.

"A decade of spend, spend, spend meant Labour hid their heads. And they are still hiding them.

"Labour's leadership candidates say that spending was not the problem. It was taxes. Nonsense.

"In just two financial years up to the election, public spending rose by 10 per cent in real terms. That's a rise after inflation of £59 billion.

"Spending went from 44 pence in every pound generated by our economy in 2007 to 51 per cent in 2009. Taxes went down by 1 pence in the pound.

"The truth is that Gordon Brown tried to buy the election. Labour's big spender went on a hell of a bender.

"It was goodbye prudence and hello hangover.

"The man who built his reputation on the strength of the economy saw his legacy in tatters.

"It is no wonder Brown could not face the problems he created. But it is inexcusable that Labour's next leaders fail to face the problems.

"They are in denial about their role in creating this mess. They should take responsibility.

"But more important still, they should tell us how they would fix it.

"In 1979 the winter of discontent saw Labour lose power for a generation because Labour would not face up to the need for change.

"Unless Labour now face up to the challenge of fixing our nation's finances, they won't deserve power for another generation.

"Today, we face the biggest budget deficit in peacetime history.

"Bigger than any other country in the G7. Bigger than any other nation in the G20. Bigger than every other EU country except Ireland. Half as big again as France. Nearly four times as big as Germany.

"We face the consequences of a housing bubble Labour failed to control and an economic boom built on unsustainable personal debt.

"It gives me no satisfaction that Labour are not willing even to talk about tackling the deficit. But they know what we know: the unavoidable cuts that are coming are Labour cuts.

"As Labour's Liam Byrne said when he left the Treasury, there is no money left.

LIBERAL DEMOCRAT PRIORITY

"Now I did not come into politics to make cuts.

"As a Liberal Democrat my top priority is a strong and fair economy - caring for the vulnerable, protecting the environment.

"Yet we cannot deny the facts on the ground. There is nothing progressive about a bankrupt economy.

"We inherited a record budget deficit. Add in the debt coming due that had to be refinanced, and we needed to borrow £185 billion from the financial markets this year.

"And in May Europe faced a sovereign debt crisis.

"The Greek government now faces a cost of borrowing twice its pre-crisis level. At the beginning of April - and our election campaign - the Greeks paid 7 per cent.

"By the Friday after our election they paid 12 per cent. And in just those few days in which we were negotiating our coalition, Europe's finance ministers had an emergency meeting to staunch a crisis spreading beyond Greece to Spain and Portugal. They announced a 500 billion euro rescue package.

"But we were different, say the Labour leadership hopefuls. No we were not.

"Spain had a lower budget deficit. And lower public debt. Yet it was swept up in the crisis.

"If we had not acted, the risk would have been to our financial markets, our interest rates, and our recovery.

"We cannot hide from these facts, however unpalatable they are. Labour has become so disconnected from reality that it thinks that if it simply refuses to face up to them, they will go away. They won't.

"The fact is that we were borrowing one pound for every four pounds the British government spent.

"We really could not afford to sit back and see our cost of borrowing double.

"Our choice was simple. Take swift action to stabilise the economy, or lose control and hand the job over to others to do it for us.

"That was Labour's way when they had to call in the International Monetary Fund in 1976, imposing the biggest post-war spending cuts by far.

"Labour ducked the tough choices and lost the right to choose. That is not our way.

WORKING TOGETHER

"It only took one party to create this mess.

"Now our two parties - the Liberal Democrats and the Conservatives - have come together in the national interest to clear it up.

"Sayeeda Warsi will say more about what we are doing over the coming weeks to shine a light on Labour's legacy.

LABOUR'S CHOICE

"Labour's candidates cannot go on pretending that the budget deficit doesn't exist. It does and it is the single greatest challenge facing Britain.

"They must take responsibility.

"You cannot keep spending when the money dries up. Write cheques you know will bounce. Put party advantage before the national interest.

"Labour's last budget planned cuts of £50 billion, so why are they unable or unwilling to admit where they would fall?

"It is too easy to stand on the sidelines and criticise.

"The Labour candidates owe it to themselves and to the country to offer constructive solutions. I hope they will.

"I hope that Labour will come to terms with the truth of their legacy.

I hope they will come up with ideas to help lift Britain out of their economic slump.

"Where they do, we will listen.

"But until they come up with a credible economic plan, they are irrelevant to the biggest debate in our country - the future of our shattered economy.

"To be a credible leader of the Labour party, let alone leader of the country, they must show how they would plug the enormous hole in the nation's finances.

"We must start with the world we are in, not the world we wish we had. In this world tough choices have to be made.

"This Government is willing to make them, with care and with a heavy heart.

"Labour must take responsibility for the legacy they have left and the damage it has inflicted on so many."