At its heart is the conviction that government can be a force for good - to secure economic prosperity and build a fairer society. Not small government or big government, but smarter – reformed and responsive – government.

Our focus, as ever, is economic growth, locking in the recovery and forging a stronger, fairer, Britain for the many not the few.

This is a difficult period for our country, but we are optimistic. Britain has a bright future, not of austerity but progress, based on the country’s greatest strength: the talent and enterprise of the people.

Investing for the future: building tomorrow’s economy today

We will ensure that the banking crisis we have experienced over the last two years should never again come at a cost to the living standards of Britain’s families. Instead we will rebuild banking so that it supports the economy and offers fairer finances for businesses and consumers.

So we will transform the way the financial sector is policed, through the Financial Services Bill, with banks themselves and not the taxpayer made to pay for bank failings. Part of this is about ensuring we have a tough supervisory regime; we will ensure the Tripartite system is strengthened, is more transparent and is accountable to parliament, with a legal duty on the Financial Services Authority to promote financial stability, to regulate bankers pay (including a power which allows the FSA to tear up future contracts which do not comply with the rules) and a requirement for banks to organise themselves to deal with possible future difficulties – so called ‘living wills’.

Reform also means empowering consumers to hold banks to account by taking collective action to get redress. We will require the financial services sector to fund independent consumer advice and education and ban credit card companies from sending consumers unsolicited credit card cheques.

As the economic recovery is established, we will legislate to require reductions in government borrowing in a fair and responsible way with the Fiscal Responsibility Bill. This will ensure the national debt returns to a sustainable level, with the Government accountable to Parliament rather than a new quango.

And as a key part of our strategy for growth, we will promote targeted investment that creates jobs and builds a modern green infrastructure for the digital age. The Digital Economy Bill is a key part of Labour’s active industrial strategy and will maintain and build on Britain’s leading position in the digital sector. It includes measures to ensure a competitive, modernised digital communications infrastructure, protect intellectual property and maintain plurality in regional news.

The Energy Bill will bring about a financial support mechanism to demonstrate carbon capture and storage at a commercial scale. It will also establish a mandatory social price support scheme to help more of the most vulnerable households with their energy bills, and requires the regulator, Ofgem, to ensure consumers get a better, fairer deal and access to secure, low carbon energy supplies.

Better protection for businesses, communities and homes from the risks of extreme weather as a result of climate change will be provided by the Flood and Water Management Bill. And the Child Poverty Bill will enshrine in law the Government’s commitment to eradicate child poverty by 2020, defining what this means.

Fair chances for all: building the next generation of public services

A better Britain means world class public services underpinned by guarantees not gambles. So we are moving to a system, building on the achievements of the last 12 years, where patients, parents and local communities have enforceable rights over the services they receive - and front line staff have more freedom to shape services.

The Children, Schools and Families Bill will provide guarantees for parents and pupils, setting out what they can expect, with School Report Cards letting parents know how their school is performing and a new duty on local authorities to act when parents are unhappy. Where standards are unacceptably low, Ministers will be able to direct a local authority to issue a warning notice to a school and to close any school which fails to comply with a warning notice. We will also set out in law new guarantees for pupils and parents at all state schools, including curriculum reforms to equip young people with the skills they need to succeed, and a new entitlement to one-to-one tuition for children falling behind.

The Social Care Bill means the dignity of a new national care service: free personal care in their own homes for those with the highest need. From next October more than 275,000 of those with the greatest needs will be protected for good from charges and top-up fees for care in their own homes, funded by making the tough choices necessary to secure efficiencies in lower priority programmes. To help more people meet this aspiration we will also next year, begin to offer 130,000 older people needing care for the first time, six weeks of more personal intensive support designed to help all who want to remain in their homes. This will mean that those who have suffered from a stroke, fall or hospital stay will have the best possible opportunity to return to their homes and the intensive support to give them dignity confidence in doing so.

Fair rules: building a strong society

On crime, we will prioritise new ways to tackle the anti-social behaviour that still blights some estates and neighbourhoods. The Crime and Security Bill will protect communities by making parents take responsibility for their child’s antisocial behaviour, imposing parenting orders when a young person has breached an ASBO. The Bill will cut the time police spend on stop and search forms, help victims of domestic violence by allowing police to bar suspected perpetrators from their homes for fixed periods, set a six-year time limit on DNA record-keeping for adults whom are arrested but not charged, and introduce compulsory licensing for wheel clamping businesses.

The Digital Economy Bill will protect children through new age ratings for computer games. The Bribery Bill will equip prosecutors and courts to deal effectively with bribery at home and abroad.

With the Equality Bill (carried over) we will introduce a new public sector duty to narrow the gap between rich and poor, ban age discrimination outside the workplace, and introduce reporting for large employers on gender pay. And we will enact the Agency Workers Regulations 2010 to provide agency workers equal treatment with permanent staff on pay and holidays after 12 weeks in a job.

Rebuilding trust in a modern, democratic Britain

We must also restore confidence in our democratic institutions. The Constitutional Reform and Governance Bill (carried over) contain measures to rebuild trust in our democracy by putting the civil service on a statutory footing, provide a power for the House of Lords to expel a member and end the by-election of hereditary peers. The draft House of Lords Reform Bill will set out how the Government will bring about a wholly or substantially elected second chamber of Parliament.

Britain in a fairer, safer world

We will also ensure a better world by extending Britain’s influence as a global force for good. Fulfilling our responsibilities means we must remain at the heart of Europe and a leading member of the wider international community. And a safer Britain means continuing to tackle the terrorist threat at source – in the borderlands of Afghanistan and Pakistan.

The Cluster Munitions (Prohibitions) Bill will implement in UK law the Convention on Cluster Munitions that bans the use, development production, stockpiling, retention or transfer of cluster munitions. And the draft International Development Bill will make binding the Government’s commitment to spend 0.7 per cent of gross national income on international development by 2013.

Labour is determined not to repeat the Tory policies of the past which left families and communities scarred for generations. That is why Labour is investing £5 billion now to help people get back to work - £5 billion which the Tories oppose.

If we don’t act now, it will cost us all more in the long term. Labour’s choice is to invest billions in people’s future now. The Tories oppose giving people this extra help and would cut back on the support available to people during the downturn. Unlike the Tories we do not believe that unemployment is ever “a price worth paying.”

Independent experts recognise the disaster the Tories would cause. According to Professor David Blanchflower (former member of the Monetary Policy Committee of the Bank of England), George Osborne’s plans would lead to unemployment reaching 5 million.

Contrary to the claims in Cameron’s speech last night, yesterday the Conservatives voted against greater responsibilities in the benefit system that will help parents into work, and help cut child poverty. They also want to abolish the New Deal for Lone Parents. The reality is they don’t support more responsibilities because they won’t support the extra rights to support that come too. The Tories aren’t serious about cutting poverty or welfare reform.

Today’s figures show that many in the UK are suffering the effects of the recession.  But there are signs that our actions to help the unemployed are starting to work. 

Labour’s active welfare state is working. In stark contrast to previous recessions, people aren’t being dumped on inactive benefits like incapacity benefit, and Government action has helped to protect up to 500,000 jobs during this recession. 

Background to Labour Market Statistics

This month’s Labour Force Survey covers July 2009 to September 2009.  The claimant count and Jobcentre Plus vacancy count dates were 8^th and 2^nd October respectively.

The number of people in work rose this quarter

• nearly 29 million people were in work in July to September.
• employment level in July-September was 6 thousand higher than the previous quarter and 490 thousand lower than in the same quarter last year.
• the employment rate is 72.5%, down 0.1 percentage points on the quarter and down 1.9 percentage points on the year

The number of people claiming JSA has risen this month

• claimant unemployment was 1,639.5 thousand in October 2009, up 12.9 thousand on the level in September, and up 632.7 thousand on the year. 
• the claimant unemployment rate, at 5.1%, is virtually unchanged on the month and up 1.9 percentage points on the year.
• inflows to JSA were 361.4 thousand in October, up 4.0 thousand on the month and up 80.8 thousand on the year. The number of people leaving JSA increased to 333.9 thousand, down 1.3 thousand on the month and up 104.5 thousand on the year.
• In the year to May 2009, the number of people claiming employment support allowance/incapacity benefits rose by 25,600 to 2.6 million.  More recent provisional estimates suggest that there were 2.63 million claimants in September 2009, unchanged on the month but up slightly from the level a few months ago.

ILO unemployment has risen this quarter

• 2.46 million people were ILO unemployed in the July to September quarter, up by 30 thousand on the April to June period and up 629 thousand on the same quarter last year. 
• the ILO unemployment rate is 7.8%, up 0.1 percentage points on the quarter and up 2.0 percentage points on the year.

·        International ILO unemployment: ILO unemployment (7.8%) is below EU average and below that of US, Canada, France and Spain

The number of 18-24 year olds who are unemployed has increased

·         746 thousand 18-24 year olds were ILO unemployed in the July to September quarter, this is up by 24 thousand on the April to June period and up 165 thousand on the same quarter last year.

·         Of the 943 thousand unemployed under 25 year olds, 267 thousand are in full time education.

The level of economic inactivity is up on the quarter and up on the year

• the economic inactivity rate is 21.1%, up 0.1 percentage points on the quarter and up 0.2 percentage points on the year.
• excluding students, inactivity as a proportion of the working age population is unchanged at 15.3% on the quarter but down 0.2 percentage points over the last year.

There are still many vacancies available, and the number of redundancies has fallen back this quarter:

• There were 205 thousand redundancies in June to August, down 63 thousand on the previous quarter and up 49 thousand on the previous year.
• ONS’s vacancy survey estimates an average of 428 thousand unfilled vacancies in the three months to October 2009, down a thousand on the quarter and down 154 thousand on the year.
• In the last month Jobcentre Plus has taken on average over 10,000 new vacancies every working day and many more come up through other recruitment channels.

Labour’s help for people when they need it most

·        As unemployment has increased, Labour has stepped up the support for people losing their jobs - £5bn of extra investment.

·        The Tories oppose this help because they oppose spending any more money to help people through the downturn. Real help costs real money.

Before redundancies happen

We give help to people at risk of redundancy to find a new job, even before they become unemployed through our Rapid Response Service (RRS). Opposed by the Tories.

Day One of Unemployment

We have invested to guarantee that everyone looking for work will get, from day one: help and advice on finding a new job, help to write a new CV and fill in job applications; help on retraining and skills advice; help with their rent and with their mortgage from 13 weeks; help to access to the new vacancies recorded by Jobcentre Plus every working day. We are recruiting thousands of new Jobcentre Plus staff to help people into work. Opposed by the Tories.

From 3 Months Unemployed:

People will get extra help with mortgage payments (SMI) to help them keep their homes when they lose their job. We are giving twice as much help, paid earlier. In addition, we step up the help we give with wider job search and more intensive support from advisers. Opposed by the Tories.

From 6 months unemployed:

We know that the majority of people move off Jobseekers Allowance within 6 months, but we are guaranteeing more help for those that don’t. We are promising every jobseeker more support if they have not managed to find a new job within six months.  As well as extra funds for Jobcentre Plus to allow them to provide more intensive and personalised support, we are offering:

·        “Employers’ Golden Hellos”: incentives of up to £2500 (£1000 in Scotland and Wales) paid to employers to recruit and train unemployed people

·        New training places: extra funding for training places to help unemployed people get new skills to maximise their chances of getting jobs from the 500,000 vacancies in the economy.

·        Work-focused volunteering options: opportunities to volunteer to help people back into work habits

·        Help to set up a business – advice on creating a business plan, plus funding for the first months of trading.

Backing Young Britain

The joint campaign with business, public sector bodies and charities runs over the next few months.  It recognises that times are tough – but calls on everyone to play their part. We want to give young people leaving school or university a chance and to harness the talent of the future for Britain’s organisations.  This will help young people get into the jobs market – and benefit business into the bargain.

We are calling on employers, on businesses and other organisations to make a commitment to support young people in at least one of the following ways:

• work with a partnership to bid for one of the 100,000 jobs for young people from the Future Jobs Fund
• offer a volunteering place or a volunteer mentor for school or university leavers;
• provide work experience places to help young people learn about work, make contacts and fill their CV
• consider a young person for a job through a work trial
• offer an internship for a graduate
• provide an apprenticeship for 16-24 year olds
• join a Local Employment Partnership to make sure job vacancies are advertised to local unemployed people

 Labour’s Guarantee for young people:

·        Labour will protect Britain’s young people from the effects of the global recession by offering work or training for every 18 to 24 year old who is in danger of becoming long term unemployed.

·        We are funding 250,000 jobs in the public and private sectors, including a ‘Future Jobs Fund’ that will enable local authorities and third sector groups to develop innovative ideas for jobs that will make Britain a better place.

·        The Future Jobs Fund will provide 150,000 new jobs, at least at a National Minimum Wage level, around two thirds of which will be directed at young people. The remaining jobs will be focussed at areas of particularly high unemployment.

·        The Fund is already open for business and we are working with councils and voluntary groups on developing new jobs through the fund and, by January next year, every 18 to 24 year old who is approaching 12 months unemployment or more will be guaranteed a new job, training or paid work experience place.

·        We are calling on every local authority, voluntary sector and social enterprise to bring forward their ideas of jobs they could offer - we want organisations to come to us with proposals and we hope that bidders can match funds, alongside the £6,700 we will provide.

·        In addition to the Future Jobs Fund we will offer 100,000 jobs opportunities in the sectors of the future that will help Britain grow.

·        Despite the recession, many sectors still have vacancies and others will grow over the coming years. In these areas we will set aside posts for young job seekers and offer them pre-employment training and a recruitment subsidy, so talented young people can take up interesting jobs and gain vital work experience for jobs of the future.

11 November 2009

The NHS has made enormous progress in the last 12 years. Waiting times are the shortest since records began; 3 million more operations are carried out each year; there are over 100 new or refurbished hospitals; and more people are surviving cancer, strokes and heart disease.

Now, Labour will introduce three legally enforceable rights:

• To a free health check every five years for those aged 40-74.

• To see a cancer specialist within 2 weeks.

• To treatment within 18 weeks.

These are rights that we will put in place as soon as possible in the New Year.

If your local NHS Trust cannot meet these guarantees they will - by law - have to find you somewhere which can treat you as soon as possible, even if it is in the private sector.

We are also consulting on the new rights which will be our ambition for the health service over the next few years, including:

• The right to diagnostic cancer tests and results within a week - our cancer pledge.

• The right to see a GP at weekends or in the evening, and to abolish practice boundaries for good.

We will put real power into the hands of patients and ensure that under Labour there can be no return to the long waiting lists seen under the Tories.

For all their claims to be the party of the NHS, they would tear up the patient guarantee to see a cancer specialist within two weeks. Labour offer guarantees in what care patients get.  The Tories offer a gamble.  Behind David Cameron’s spin, the Conservatives remain anti-reform on the NHS. They oppose Labour’s patient guarantees - including the guarantee to see a specialist within two weeks if your GP suspects you may have cancer - and they would scrap our agreement with GPs, making it harder for you to see your doctor at evenings and weekends.

The next election will be a big choice about the change we want for Britain.  Labour offers change for the many.  The Conservatives offer change for the privileged few. 

 From 1 April Labour is abolishing NHS prescription charges for everyone undergoing treatment for cancer, the effects of cancer, or the effects of cancer treatment.

Up to 150,000 patients already diagnosed with cancer are expected to benefit, saving them £100 or more each year in prescription charges.

Other new NHS improvements are Health Checks - which will also begin from April. Everyone aged between 40 and 74 in England will begin to be invited for a free health check to identify their risk of diseases such as coronary heart disease, stroke, diabetes and kidney disease.

These health checks are a good idea because they will make sure people from this age group have the right information about their health in order to make important lifestyle changes and reduce their risks of developing diseases like diabetes and coronary heart disease.

These illnesses currently affect the lives of 4 million people in England and are responsible for a fifth of all hospital admissions.

Also from April all NHS Trusts will be able to offer MRSA screening to all relevant elective patients.

 The number of people getting infections from MRSA is falling (latest figures show reductions of 38 per cent), but we still have further to go and this is part of our continued efforts to reduce infection rates even further.

Waiting Lists

The NHS now has the shortest waits since its records began.

 It has met its target to treat patients within a maximum of 18 weeks from referral by their GP – an achievement which was unimaginable 12 years ago. 

This is a tremendous achievement by NHS clinicians and staff who should be proud of the difference their hard work has made to the experience of every NHS patient.

 In the 1990s it was not uncommon for people to wait 18 months or more for their operation – with some people dying on the waiting list.

 The NHS is one of our country’s greatest achievements and we will always stand up for it.

Our approach to Afghanistan is part of a wider international effort to help the governments of Afghanistan and Pakistan to build the security, democracy and prosperity which is essential to stability in this crucial region and to our own national security – helping those countries to take increasing responsibility for tackling the problems of terrorism, violent extremism and drugs.

Labour is determined that we will see our international commitments through. We must not repeat the mistake that the international community made in previous decades when we walked away to leave these countries to face these problems on their own – and those problems ended up coming back to the streets of Britain.

Three quarters of terrorist plots against Britain have originated from the Afghan/Pakistan border area. Our strategy is aimed at helping prevent Al Qaeda and the Taleban from undermining legitimate government in either Afghanistan or Pakistan. Failure in either country would make Britain less safe.

Our objective in Afghanistan, as the Prime Minister said on 6 November:

“is clear and focused; to prevent Al Qaeda launching attacks on our streets and threatening legitimate government in Afghanistan and Pakistan. But if we limit ourselves simply to targeting Al Qaeda — without building the capacity of Afghanistan and Pakistan to deal with terrorism and violent extremism - the security gains will not endure.”

This is also why last year we doubled the number of civilian stabilisation advisers, and why our joint civilian-military stabilisation teams – the first in Afghanistan – are now supporting not just Governor Mangal but district governors and village shuras on stabilisation and development in Helmand.

Despite the very difficult summer, progress is being made in a range of areas – including roads, basic justice, governance, and agriculture. To ensure this continued progress, we announced last month an extra £20 million for stabilisation in Helmand – money that is already being spent to help increase the number of Afghan national police in Helmand by 1000 a year for three years; to build a new police training academy; and to build new facilities for district governors. We are working with coalition partners to extend such support to the 34 provincial governors and 400 district governors right across Afghanistan.

In August the UN announced that poppy production in Helmand - responsible for around half of global supply – is down by 37% through a combination of security for farmers against Taleban intimidation, and support for alternative crops through the food zone programme led by Governor Mangal with British help, which has provided wheat seed for 30,000 farmers. An independent study from Cranfield University showed better results inside the zone than outside. We are in Afghanistan primarily to deal with terrorism not tackle the heroin trade - but in many areas of Afghanistan, including Helmand, the drug networks are among the most powerful forces opposing a stronger Afghan state that could deal with terrorism itself.

Gordon Brown also pledged that this Labour government will continue to support progress across Afghanistan on health and education – we must not forget that 6.6million children, including 2m girls, are now enrolled in school compared to 1m children, and no girls, under the Taleban; and that 80% of the population have access to basic healthcare, with 40 thousand more Afghan children reaching the age of 5 compared to 2002. All of this is due to the support of the international community including British support, eg helping to pay the salaries of doctors and teachers.

Equipment support to our armed forces in Afghanistan

We are committed to giving our Armed Forces in Afghanistan the best possible equipment – particularly focused on countering the threat from IEDs.

There is no single answer to IEDs, as the Prime Minister set out in his speech on 4 September at IISS. We have sent additional specialist counter-IED forces; extra surveillance and other equipment to find and defuse bombs; and have adopted new offensive tactics to target the networks that set the IEDs. 19 brigade, who are just finishing their tour, found and defused or destroyed over 1200 IEDs.

Military spending on Afghanistan - from the Reserve, over and above the defence budget - is now at £390,000 per soldier fighting, compared to £180,000 in 2006.

We have spent over £1bn from the Reserve on new vehicles for Afghanistan since 2006, including £20m on more Ridgback vehicles going into Afghanistan this autumn. We now have four times the number of mine-protected vehicles – Ridgback and Mastiff – in Afghanistan compared to six months ago.

“On the issue of troop carrying vehicles I think great progress has been made and I pay tribute to the government for that”

David Cameron, Sky News 18^th August 2009

We have increased helicopter flying hours by 84% compared to 2006, and with the arrival over the coming weeks and months of Merlin helicopters and extra Chinooks, and upgraded Lynx helicopters; this will rise to 130% more flying hours by spring next year.

Pakistan

The Prime Minister welcomed the recent success of the Pakistan Government against the Pakistan Taleban in Swat, Dir and Buner, and said that “the support of the opposition now demonstrates that a wide cross section of Pakistan society accepts that terrorism poses a threat as serious to Pakistan as to the rest of the world.”

He said that

“it is vital that basic services and economic assistance be provided in the liberated areas as soon as security conditions allow - so the Development Secretary is today announcing a further British contribution of £10m, in addition to the £22m we have already provided for humanitarian assistance.”

DfID’s national programme for Pakistan is increasing to £665 million during 2009-2013. We are making progress in tackling poverty: 22.3% of the population were below the poverty line in 2006-07 compared to 34% in 2001-02. Our support to the health sector has helped to save 200,000 children’s lives; stop 800,000 children becoming malnourished and increase the percentage of children being immunised from 53% to 76%.

We plan a substantial new investment in education - up to £250m over 5 years. The focus is on getting more children into school, improving education quality and providing young people with the skills they need to get jobs. By 2013, our support will help put 5 million more children attend primary school and ensure 500,000 young people benefit from technical and vocational training. DfID is also working with the government of Pakistan to help establish a Pakistan education task force formed of the best Pakistani and international experts to focus on improving the implementation of education policy in Pakistan.

In the border areas, DfID is planning to expand our current programme in North West Frontier Province and work in Balochistan and the FATA. We have already helped provide clean drinking water and sanitation to one and a half million people in NWFP between 2003-07.The PM announced £50 million for the border areas at the Friends of Democratic Pakistan summit in New York in September.

Wider support for our Armed Forces

Labour is committed to supporting all our Armed Forces – especially those serving Afghanistan but also the whole armed forces – across the full range:

·        We were the first government to introduce, in 2006, a lump sum operational bonus for those fighting in Iraq and Afghanistan – over £2380 tax free for a six-month tour, flat rate for officers and junior ranks alike.

·        In 2008 we doubled the lump sum compensation for the most seriously wounded – but we accept that the scheme as a whole is not yet right, so we have announced an urgent review, independently chaired by former chief Lord Boyce and welcomed by the Royal British Legion.

·        We have continually upgraded the welfare package for troops in Afghanistan – more free phone calls (20-30 mins per week) internet access, and free wi-fi.

·        We have continued to improve the medical care and welfare support for wounded service personnel out in Afghanistan, in Selly Oak which now combines a military-run ward with the best NHS treatment, and at Headley Court.  Recent additions include new 58-bed staff & patient accommodation block at Headley Court, and a new rehabilitation complex will be completed by spring 2010.

·        Out of last summer’s Command Paper on Support for our Armed Forces, service families can now retain their place on an NHS waiting list when they move to a new area. Veterans have free access to university education. Injured personnel can now access grants of up to £30,000 to adapt their homes, without their compensation payments being means-tested. All veterans have priority status in affordable housing schemes, and we have changed the law in England and Wales to ensure service personnel can claim local connection like anyone else.  

·        We have a £3bn programme for service accommodation over the next 10 years.

Prime Minister Gordon Brown today announced future plans on British troop levels in Afghanistan, in support of our strategy of Afghanization set out in December 2007 and again in April this year.

Please find below a copy of the Prime Minister’s speech on Afghanistan. In it, the Prime Minister set out why our mission in Afghanistan is vital to Britain’s national security. It is a campaign of necessity, not one of choice. Either we fight extremists in Afghanistan and Pakistan – or we wait for them to carry out more terrorist attacks.

We have the right strategy. Afghanisation – the training up of Afghan security forces and getting them to take a lead role – is the right approach. We must continue with the mentoring/partnering approach that we have begun. It is risky. But it is only when Afghan troops and police can secure Afghanistan for themselves that our troops will be able to come home. That is what defines success and when we can exit.

The PM also set out five tests for President Karzai’s contract with the Afghan people for his second term:

·        Security, and the Afghanisation of the security effort. We want to see 134,000 Afghan troops trained by end 2010. The Afghan government must recruit 5,000 troops for training each month. The UK stands ready to partner 5,000 in Helmand, working together with the Afghans right up the command chain.

·        Governance. Karzai must lead the fight against corruption; make clean and strong appointments to his unity government. Cronies and warlords should have no place in the future of Afghanistan.

·        Reintegration and Reconciliation. We want Karzai to reach out to bringing moderate elements of the insurgency back into the political fold, reintegrating them in an inclusive political settlement.

·        Economic development. Every Afghan must have a stake in the future – and like the security effort, we need to Afghanise the international aid effort. Outside the cities, agriculture must drive the Afghan economy. In the last 12 months we’ve seen a 38% drop in the poppy harvest in Helmand. We must build on this and work on schooling and infrastructure.

·        Relations with Afghanistan’s neighbours. President Zardari has said he will attend Karzai’s inauguration. We need Afghanistan and Pakistan to work together: the insurgency straddles their border, so must the solution.

Prime Minister’s speech on Afghanistan at the Royal College of Defence Studies

6 November 2009

Check Against Delivery

Let me first of all thank Admiral Style and everyone here at the Royal College of Defence Studies for the vital work that you are doing to support the development of international strategy and leadership across the world. It’s a great privilege to be able to speak to the college Fellows today and to support your leadership programme.

And to this event today I am particularly pleased to be able to welcome General Parker who is about to take up his new post as the Deputy Commander of international forces in Afghanistan. And also to welcome senior serving officers from the Afghan and Pakistan armed forces.

This weekend – as we do each year - we remember the sacrifices made by generations of our armed forces who have given their lives in the service of this country. We celebrate their courage; we honour their extraordinary dedication. And we remember them with pride.

For the sacrifice – and the great achievements - of our armed forces are defining features of our nation - a testament to the strength and irrepressible spirit of a Britain always prepared to do what is necessary to protect the liberty and security of its people; a Britain that fights for its values; that stands up against the things we know are wrong.

And this is not just an essential part of British history – it is at the heart of modern Britain – and epitomised today by the immense service and sacrifice of our armed forces engaged in operations across the world; and especially - as I have seen myself on each of my visits – in Afghanistan.

So, as this weekend we rightly remember and honour many generations of British service men and women - I want to pay a personal tribute to all those who have been killed or wounded serving in Afghanistan.

As a nation we share the sorrow and grief that comes from the loss of their lives. 93 have been killed this year. That 93 is not just a number; but 93 families whose lives will never be the same again. 93 families without a Dad, or a husband, a brother or son. 93 families this Christmas with a place at their table no-one else will ever be able to fill.

And as well as those who have died, more than 100 have been seriously wounded this year - in ways that will change their lives, and the lives of their families, for ever.

In the tragic attack earlier this week, three guardsmen and two military policemen were killed carrying out the work which is so vital to our strategy, the work so feared by our enemies - working alongside the Afghan army and police – training and mentoring them so that the Afghan security forces fighting against the Taleban can be strengthened and so that one day they will be able to take responsibility for the security of their own country.

These men are our heroes today. Our nation will pay tribute to their memory this Sunday and every Remembrance Sunday. And though we owe them a debt of gratitude we can never repay; we will remember them.

And just as in the past we learnt of the bravery and sacrifice of British soldiers in the First and Second World Wars; in their fight to protect freedom both in our nation and the world; so our children will learn of the heroism of today’s men and women fighting in Afghanistan - protecting our nation and the rest of the world from threat of global terrorism.

Fighting there, so that we are safer at home. Joined by countries from all over the world so that terrorism can be combated: a campaign of 43 countries prosecuted out of necessity, not of choice.

In the last decade, in hundreds of attacks across the world, Al Qaeda and those associated or inspired by them have killed thousands. These victims were Muslim, Christian, Jewish, of every faith and none.

This is a reality all the world has witnessed – in New York, Bali, Baghdad, Madrid, Mumbai, Rawalpindi - and of course right here on the streets of London.

So when people ask why we are in Afghanistan - why over 40 countries have troops on the ground – I ask them to look at this list of terrible atrocities.

We all face the same threat; we all agree on the need to take action to meet that threat; we must also agree on the strategy to meet it and the resources necessary to carry out that strategy.

Britain has consistently shouldered its fair share of the burden and more – especially in the last three years, since we deployed into Southern Afghanistan, the heartland of the Taleban. But when the main terrorist threat facing Britain emanates from Afghanistan and Pakistan; and when, although the sustained pressure in Pakistan, combined with military action in Afghanistan, is having a suppressive effect on Al Qaeda, we know that they continue to train and plot attacks on Britain from the region – this mission must not fail.

It is not easy; the choices are not simple. There is no strategy that is without danger and risk.

But that is the responsibility of leadership – of government, and of our armed forces. To do what is necessary, however difficult, to keep the British people safe. We can not, must not and will not walk away.

Investment in our borders and our domestic counter-terrorism capacity is vital: but when three quarters of terrorists plots originate in the Pakistan-Afghan border regions investment at home cannot itself insulate us entirely from the new terrorist threat we face.

Only by tackling this threat at source, can we prevent it reaching our shores. And it is the combined efforts of our armed forces, police, security services, border agency, and other agencies both at home and abroad which are our best protection against further attack.

And so I reject any suggestion that our efforts to tackle the terrorist threat abroad have distracted us from mounting the strongest possible defence against the threat at home. Our investment in domestic counter terrorism has continued to increase throughout the Afghan campaign – with the number of police working in counter-terrorism up from 1,700 in 2003 to 3,000 today, the security services doubled in size, with a budget that has risen from 1 billion in 2001 to over 3 billions by next year, with stronger protection at the border and for our crowded places, and an increasingly sophisticated approach to preventing radicalisation. Over 200 people have been convicted of terrorist offences since September 11^th, with over half of those convicted in the last year pleading guilty.

And at present the biggest domestic threat continues to come from the mountains of Pakistan and Afghanistan. So it is right that our first line of defence is there. First, we have to help build up the capacity of the Pakistani security forces – to support their efforts and the efforts of the civilian government in Pakistan, in taking the fight to the terrorists and extremists.

They have already taken decisive action in the Swat valley and Britain is supporting them with a £30m package of aid covering humanitarian help for displaced persons, through to a comprehensive development and reconstruction plan.

The Pakistan military have now moved 28,000 troops into South Waziristan – and as a reminder of the links between extremism in these mountains on the Afghan-Pakistan border and the terrorist threat to Britain, we have seen reports of a passport found as part of this recent offensive, allegedly belonging to an individual known to be associated with the 9/11 hijackers. 

In Afghanistan our role is necessarily different, because the Afghan army is not yet able to mount this kind of offensive - and so our forces are by necessity playing a front line role. But our objective is the same: if the Taleban insurgency succeeds in Afghanistan, Al Qaeda will once again cross the border and re-establish themselves in sanctuaries in Afghanistan from where they will plan, train and launch attacks on the rest of the world.

This is what our security services report to me – and that is the basis for our assessment that our presence in Afghanistan is justified, and that our strategy, set out in the spring, is the right one.

Our strategy emphasizes the need to strengthen the legitimate authorities in both Afghanistan and Pakistan, and recognizes that we cannot succeed in one country without succeeding in the other.

The Taleban’s original plan, when the Americans, British, Canadians, Dutch, Danish, Australian, Estonian and other countries deployed to Southern and Eastern Afghanistan three years ago – was to defeat us through conventional warfare. This plan has failed. The Taleban’s hope now is that even if they can not win outright, through asymmetric warfare, through intimidating the population and through preventing economic progress, they can undermine morale and erode public support back home – and persuade us to give up before the Afghan people get to see the benefits of legitimate governance, or share in the benefits of greater prosperity.

So our strategy has moved from straight-forward counter-terrorism, to more complex counter-insurgency – protecting the people, helping the government win their support, and providing them with a stake in the future.

And that is how our strategy in Afghanistan differs from previous foreign interventions, including that of the Soviets — which lacked the support of the population, and did not seek to empower Afghans in maintaining their own security.

So our progress is not measured in enemies killed, or battles won - it must be measured in the progress made each season in improving the quality of life of Afghan citizens, the quality of governance, and the capability of the Afghans to protect themselves - as we slowly but surely make it more and more difficult for the Taleban and Al Qaeda to rebuild their base in Afghanistan and the wider region.

Tuesday’s tragic loss of life happened as British troops were mentoring the Afghan army and police.

The Royal Military Police and Service Inquiry Board is currently investigating the incident - and in parallel, an investigation is being carried out jointly by ISAF and the Afghan authorities. The investigations will cover all angles of the incident and from its findings lessons will be identified and acted upon.

The truth is, as we have always been clear, that we have not chosen the path of training and mentoring the Afghan forces because it is an easier or safer alternative – often it is the opposite – but because it is the right strategy.

The Taleban and others who seek to undermine the work our forces are doing will not divert us from our strategy.

They understand that our efforts represent our commitment to leaving a lasting legacy in the ability of local security forces to resist the Taleban.  

Four hundred of our armed forces are dedicated to mentoring the afghan army; and over 100 are dedicated to mentoring the police, working together with British and European specialist police trainers. But all our forces are working increasingly closely with Afghan counterparts as we move towards the approach we call “partnering”.

I saw this partnering in action in August in the joint operational co-ordination centre in Lashkar Gah – bringing together the Afghan army, police and security services – all with British mentors.

I heard how the Afghan police are often on the front line, taking heavier casualties than even the Afghan army - and also that the challenge for their mentors here is even tougher than the Afghan army – with problems of illiteracy, drug abuse and corruption.

But despite these very serious challenges the Afghan police have played a role this Summer – involved in holding the Babaji area in Operation Panther’s Claw, and in the security effort around the elections, led out of the joint operations centre – which ensured that over 100 polling stations were opened and stayed open despite the Taleban threats.

We will not give up this strategy of mentoring. Because it is what distinguishes a liberating army from an army of occupation.

Not an army in opposition to local Afghan people but an army supporting local Afghan people.

And this approach to Afghanisation that we recommended more than a year ago is now the strategy of the whole coalition.

And it is essential for the whole coalition to implement it across Afghanistan.

It is well known that President Obama is considering his response to General McChrystal’s report.  It is clear that he sees that the response must come from the international coalition as a whole.  For as we consider the nature of the threat we face, it is not the US that is being tested in Afghanistan, nor Britain, but the international community.  We entered together eight years ago. We must persist together; in our different ways we must all contribute; in the end we will succeed or fail together.

I have made clear to President Obama that the UK will play its full part.  In July I indicated that the temporary deployment of 700 troops for the period of the Presidential election would remain beyond the elections.

Last month I announced that – if key conditions are met, including burden-sharing across the international community – then the UK would send an extra 500 troops. 

This would bring the total number of British troops to 9,500. It is proof that we will not be deterred, dissuaded or diverted from taking whatever measures are necessary to protect our security – but we will also rightly insist, every time a single soldier is deployed to Afghanistan, that we have the reassurance of the military chain of command that they have the best possible equipment; that they are there in support of a clear strategy, agreed across the international community; and that an Afghan government is in place which can live up to its side of the bargain.

The sad news from yesterday reminds us that despite the tragic incident earlier in the week, the deadliest challenge facing our forces remains that of defeating the new Taleban tactic of IEDs - mines and roadside bombs. These attacks have more than doubled over the past year, as casualties have increased across the coalition – three quarters of them now due to IEDs.

Responding to this growing threat requires not one response but many: new equipment, better surveillance, specialised troops, and offensive operations – not just to find and dismantle the IEDs but also to identify and target the networks who lay them. British forces have dismantled over 1500 IEDs this year and the proportion detected compared with those that exploded has almost doubled since Spring last year.

In August I announced that we would increase the surveillance assets targeted on the bomb-makers – and last month these increases came on stream. I also announced, and last week the Chief of the Defence Staff confirmed, further increases in helicopters – ensuring that by next Spring we will have increased the number of helicopter hours, including commercially leased freight helicopters, more than threefold over the last three years.

But let us be clear: what separates successful counter insurgency from unsuccessful counter insurgency is that it is won on the ground and not in the air. We are committed to giving our commanders more options for road moves as well: we have bought another 20 Ridgeback mine-protected patrol vehicles to ensure that more will be going into action this Autumn, joining the world-class Mastiff vehicles – and since 2006 we have spent over £1billion from the reserve on new vehicles for Afghanistan.

All this equipment has to be manufactured, delivered and adapted - and the personnel trained to operate it. It is simply wrong to question our commitment as we adapt to the new tactics of the Taleban – or to doubt our willingness to pay for it. This is why we are speeding up the deployment of vital equipment – but also making its delivery a condition for further troop increases. I am determined that while it is inevitable that conditions change and our strategy must respond, the fundamental principle must remain, that every soldier and unit deployed to Afghanistan is fully equipped for the operations they are asked to undertake.

But let me also be clear. People are right to ask whether our soldiers should be placed in harm’s way, if the government of Afghanistan is unable or unwilling to meet its obligations to the Afghan people. And this is the second condition I placed on any further British troop increases.

In all my conversations with President Karzai – and we have already spoken three times this week – I have said that he needs swiftly to set out his positive agenda for his second term.  He needs a contract with the Afghan people; a contract against which Afghans, as well as the international community, can judge his success.

When President Karzai takes the oath of office for the second time later this month, I hope he will set out his plans in detail. International support depends on the scale of his ambition and the degree of his achievement in five key areas: security, governance, reconciliation, economic development and engagement with its neighbours.

First, security – and the Afghanisation of the security effort.  The first priority of any government is to provide security for its people.  It is not sustainable to subcontract that task indefinitely to the international community. So the expansion and training of the Afghan army and police must be the new government’s first priority. 

We have made clear for some months that Britain accepts General McChrystal’s recommendation to accelerate the expansion of the Afghan army to 134,000 by this time next year. To achieve this Afghanistan has to provide up to 5,000 army recruits per month. The international community will help with funding and training – but it is the job of the Afghan government to find the recruits. And I have welcomed the Afghan intention to set up an army corps headquarters in Helmand. British forces, as part of our strategy of Afghanisation, will be ready to partner 5,000 Afghan troops in Helmand – not just embedding mentors with Afghan units, but working closer together right up the command chain.

Better governance – is the second strand of our Afghanisation strategy. Sadly, the government of Afghanistan has become a by-word for corruption. And I am not prepared to put the lives of British men and women in harm’s way for a government that does not stand up against corruption.

President Karzai agreed with me yesterday that the first priority of his new government would be to take decisive action against corruption. I proposed that there be a new anti-corruption law, that a new anti-corruption commission be formed with powers of investigation and prosecution, that the commission appoint an international adviser of substance, and there be new rules for the more transparent award of contracts.

But good governance is more than the absence of corruption. It is about having properly qualified men and women in the key jobs. The world will be monitoring the new government’s appointments – cabinet ministers and provincial governors - to ensure they are based on merit. Cronies and warlords should have no place in the future of Afghanistan. 

Constitutional arrangements in Afghanistan were clearly severely tested by the Presidential election. Malpractice was exposed and dealt with.  But as we approach next year’s Afghan parliamentary elections, the flaws that have been exposed must be rectified. Neither we nor Afghanistan can afford a repetition of the quarantined ballot boxes from August’s first round.

Nowhere is democracy a perfect system. But I firmly believe that everywhere democracy is the best option. In an infant democracy it will function imperfectly. Faltering beginnings are not a reason to give up. All commentators have noted what was a setback about Afghanistan’s Presidential election – I accept that; but more might acknowledge that even up against insurgency, millions of people went to the polls in the first presidential election organised by Afghans themselves. A people for so long denied a say in their future, now beginning to take the destiny of their country into their own hands.

Third, a more inclusive political settlement. We commend President Karzai for reaching out to his defeated opponent.  More challenging still is to reach out to those who have been outside the political process. Reconciliation and reintegration are central to future security stability and prosperity.  So there needs to be an agreed process for bringing those who reject violence back into the political fold. 

That process needs to be led by Afghans, but we are ready to provide support to whatever process they adopt.

Fourth, an ambitious but realistic plan for economic development to give the afghan people a stake in the future. As Douglas Alexander set out yesterday, Helmand is one of the most aid-supported places in the world – the United Kingdom alone is spending over £80 million in Helmand this year, as part of the international community’s efforts totalling some £200 million. That means Helmand will receive some £200 in aid per person this year - around double the afghan national average.

So just as it is wrong to say that we are not giving the fullest financial backing to our troops, it is also a myth to say that our development effort is not directly supporting our military campaign. The challenge is to Afghanise this part of our strategy also – with an emphasis on identifying long term growth areas and investing in education and skills to match them.

Outside the cities the key to this must lie in agriculture. In the last 12 months there has been a 38% reduction in the poppy harvest in Helmand. Wheat has become the crop of choice in Governor Mangal’s food zone. Such changes must be entrenched in Helmand and across the country. And at the same time President Karzai’s government must deliver safe drinking water, reliable electricity, schooling for girls as well as boys, and for everyone a primary health care centre within two hours’ walk. We can help; but only he and his government can deliver.

And finally, stronger regional partnerships.  There are welcome indications that President Zardari will attend President Karzai’s inauguration, just as Karzai attended his. Relations between the leaderships of Afghanistan and Pakistan are better than for many years. But this has yet to translate into closer cooperation between key institutions. The problems of terrorism and extremism straddle borders; so too must the solutions.

I commend the European Council and the UN for the leadership they have shown – when I met Secretary Ban this week I offered our support and help in the face of the recent attacks on their staff – and they have assured us that their withdrawal of some staff is a temporary measure while security arrangements are reviewed.

If we are to help the Afghan government to deliver against these five tests, stronger international coordination is crucial – as well as clearer metrics to measure progress. In devising these metrics the international community – and the sovereign afghan government – must listen to what the afghan people want. As well as being very clear that they do not want the Taleban back, what they say they want above all - as I heard myself at a shura in Lashkar Gah earlier this year – is security, justice, and opportunity – which correspond to the first, second and fourth of the five tests I have set out today.

Measuring security is difficult. The perceptions of the afghan people are crucial – and so are the capabilities of the afghan security forces. This year we have conducted increasing numbers of joint operations, building their capabilities by fighting alongside them.  Kabul has been handed over to afghan overall control – over time, other areas will follow. We are making progress too in training Afghans in counter-terrorist and counter-narcotics operations.

As I argued in September, what we need above all is to encourage the advance of Afghan autonomy and responsibility in all these areas - because the more Afghans can take responsibility in the short term, the less international intervention will be needed in the long term.

If with our help the new government of Afghanistan meets these five tests, it will have fulfilled an essential contract with its own people.  And it will have earned the continuing support of the international community, despite the continuing sacrifice. 

If the government fails to meet these five tests, it will have not only failed its own people, it will have forfeited its right to international support.

What people here in Britain ask for is the same as our forces on the ground ask for – a clear sense of what success in Afghanistan would look like, and how we will get there.

My answer is: we will have succeeded when our troops are coming home because the Afghans are providing security themselves, continuing the essential work of denying the territory of Afghanistan as a base for terrorists.

The right strategy – for Britain and for the international community as a whole – is the one that enables the Afghans to take over from international forces sooner; at a higher level of capability; and with a greater level of assurance that the pressure on Al Qaeda and other terrorist and extremist groups will be maintained, and so that a safer, more stable and better-governed Afghanistan will contribute to a safer Britain – in a safer world.

Ends

The steps that have been taken to ensure help is available at every stage of the repossession process include:

• ACTION ON ADVICE: The Government is investing £130m in providing free face-to-face debt advice services between 2006 and 2011, and over the past year more than 100,000 families have received information and advice about their mortgages from councils and Citizens Advice Bureaux.

• ACTION ON LENDERS: The Government has taken action so homeowners are treated fairly with tolerance and understanding from lenders for those in mortgage arrears – 116,000 struggling households are now benefiting from special arrangements agreed with their lender.

• ACTION IN THE COURTS: Lenders must prove they have exhausted every possible option before applying for a repossession order. The Government has continued to put funding into Court Desks offering free, on-the-day legal advice and representation for those threatened with repossession. The Government recently doubled the extra funding to support this service. There is now universal access to this service for people attending repossession hearings at county courts in England. Even on the day of a repossession hearing, around four in five repossessions can still be stopped if the households attend court and access free advice.

• ACTION TO PROVIDE DIRECT SUPPORT: Through special Government schemes like Support for Mortgage Interest and Homeowners Mortgage Support over 200,000 families are now getting help with their mortgage interest payments – with another 88,000 expected to benefit over the next two years. For the most vulnerable households facing the immediate threat of repossession, there is the safety net of the Mortgage Rescue Scheme.

The Government has announced a new ambitious vision for giving people and businesses the skills they need to help drive economic growth.

The Labour Government will:

• Create a modern class of technicians, through a dramatic expansion of  advanced apprenticeships, creating 35,000 new apprenticeship places over the next two years;

• Give every adult who wants one a personal skills account, empowering learners to shop around for training with new information on how well different courses and colleges can meet their needs;

• Radically simplify the way in which skills policy is delivered – working with the UK Commission for Employment and Skills to reduce the number of public bodies by more than 30.

Today’s announcement shows that it is Labour that has the ideas for Britain’s future and is willing to invest in ensuring that we’ve got the skills we need as a nation to succeed in the years to come.

Labour rescued apprenticeships from near extinction under the Tories and today’s announcement that we’re set to fund 35,000 more is good news for everyone.

In addition, the Government will:

• Work with business to focus funding on the areas of the economy that can do most to drive growth and jobs, deploying around £100m to support around 160,000 training places in areas such as life sciences, digital media and technology, advanced manufacturing, engineering, construction and low carbon energy;

• Offering 1,000 new scholarships worth £1,000 each, to encourage the best apprentices to progress into higher education;  and

• Give more employers the chance to drive and shape training provision through launching a fifth competitive bidding round of the National Skills Academies programme.

Through Labour’s policies outlined in Skills for Growth – The National Skills Strategy  the Labour Government sets out a pathway to achieving a bold new ambition for three quarters of the population to go to university or get an advanced technical qualification by the age of 30.

The full executive summary and strategy document can be found here  http://www.bis.gov.uk

20 Ministers including the Prime Minister and Schools Secretary Ed Balls visited new schools around the country on 7 September to celebrate the opening of 400 new or refurbished schools this year.

Thanks to Labour’s investment more than 4,000 schools will have been built, rebuilt or refurbished by July 2010 since 1997 – the biggest sustained period of school building since Victorian times. We have also brought forward almost £1 billion of schools capital investment from 2010/11 to 2009/10 to support the economy during the recession.

Labour has transformed the legacy of under-investment we inherited and put an end to the days of leaking roofs and freezing classrooms. We are investing £21.9 billion capital in schools in 2008-11 and £8 billion this year alone – up from just £700m a year in 1997. Since 1997, every single school has benefited from increased capital investment.

The Tories are committed to cutting £4.5 billion from Labour’s Building Schools for the Future programme and have suggested their new ‘Swedish style schools’ would open in rented office blocks (see dividing lines below for more details).

The 400 new schools opening this year include:

o       67 new Academies, hitting the 200th Academy target a year ahead of schedule, and with up to another 100 opening in the next school year

o       33 Building Schools for the Future schools – meaning 120 BSF schools are now open.

o       the first 97 schools built under the Primary Capital programme, which aims to rebuild half of all primary schools

o       200 schools built through local authority run projects

o       and 22 National Challenge Trusts - where a National Challenge school links up with a strong educational partner - are also due to open this term.

Building Schools for the Future

By the end of September, 120 schools will be benefitting from BSF investment – up from 42 open in December 2008.

85 local authorities across England – and nearly a third of all secondary schools - are now involved in the BSF programme.

Current projections are for 115 BSF schools to open in 2009-10 and 165 in 2010-11 rising to at least 200 opening a year in 2011-12.

Ministers expect that the vast majority of local authorities will have finished their projects by 2020, with the remaining areas in the final stages of renewing their estate. For more information on the BSF announcement please: www.partnershipsforschools.org.uk

Academies

Results

Academies continue to make rapid improvements. For those Academies with results in 2008 and 2009  the increase in the proportion of pupils achieving at least five GCSEs at A*-C including English and maths is expected to be 5.1 percentage points  – likely to be above the national average rise and an increase on last year’s Academy improvement rate of 4.3 percentage points. 

In these Academies the average proportion of pupils achieving at least five GCSEs at A*-C including English and maths is 35 per cent - almost double the average final results of the schools they replaced (17.7 per cent).

These figures are based on self-reported results from the 63 Academies that have been open long enough to have two years of exam results. Full verified results will not be published until January 2010. The national average increase was 2.5 percentage points last year.

Sponsorship

Ed Balls has today announced that there will no longer be a financial requirement for new Academy sponsors for schools opening from September 2011.

This builds on the success of abolishing the £2m sponsorship fee for universities, further education, college and high performing school sponsors in 2007. 55 universities, 28 further education colleges and 21 high performing secondary schools are now involved in the Academies programme.

The test will now be the organisation’s educational track record, their skills and leadership and their commitment to working with local parents, teachers and pupils rather than ability to contribute financially.

The changes will smooth the path to creating chains of state schools under single management, with a single ethos and identity, which were proposed in June’s Schools White Paper. 

The proposals for how Academy sponsors will be accredited will be published for consultation in the autumn – with the first selected under it in spring 2010 in time for the academies to open in 2011.

Sponsors will have to prove outstanding management skills; a clear commitment to working with parents, teachers, and pupils; and capacity and potential to drive up educational standards.

Sponsors will still be expected to make serious and sustained financial commitment – with financial commitments for existing projects, past the expression of interest stage, to be honoured and sponsors still encouraged to set up endowment funds to drive up standards – as in US universities.

Ministers waived the £2m sponsorship in July 2007 for educational institutions wanting to take over academies – which has lead to a boom in new university, college and school sponsors now involved in Academies programme. 

The Government payments are designed to:

• Help kick-start families’ saving for their children;
• Strengthen the savings habit of future generations;
• Promote financial education; and
• Ensure that at age 18 every child will have access to a financial asset

 Background

The Labour Government introduced the Child Trust Fund (CTF) in April 2005.

When a child is born, a CTF voucher for £250 is sent to parents automatically once they have claimed Child Benefit.  If a child is in a lower-income family they will also receive an additional £250  (this will go to children in families eligible for full Child Tax Credit  - those with a household income of £16,040 or below in 2009/10). 

It was backdated to cover all children born from 1 September 2002 onwards. 

Children who reach the age of 7 from 1 September this year will receive the second round of Government payments – as announced in Budget 2006.

At the age of 7, each child will receive a further £250 payment from the Government.  Again, children in lower-income families and children in care will receive an additional £250.  Age 7 payments are paid directly into the Child Trust Fund account by HMRC.

When children reach the age of 16, they take control of accounts, allowing them to invest the money as they wish. The money is locked in until they reach 18.  There are no restrictions on the use of the money at 18 - young people are best placed to decide on use. The Government has announced that Child Trust Funds will be able to roll over into an ISA on maturity, enabling young people to continue to save tax-free. 

The Government also provides an extra £100 per year for every child who spends the year in care, in order that their Child Trust Fund provides a more significant asset for them to access on entering adult life.

At Budget 2009, the Government announced that it will contribute an additional £100 per year to the Child Trust Fund accounts of all disabled children, with severely disabled children receiving £200 per year.  Payments will start in April 2010 for children with a CTF account.

Key facts

• Over 4.4 million children have a CTF account.

• The total value of savings held in CTF accounts is currently around £2bn

• Over 700,000 7-year-olds per year will benefit from the age-7 payments that start this month.

• Around three-quarters of parents actively open their child’s CTF account after their child is born. But no child misses out – if parents haven’t used their voucher within 12 months, Government opens a stakeholder account on child’s behalf

• Around one-quarter of children receive contributions from parents, grandparents, family and friends into their CTF account.  Up to £1,200 per year can be saved tax-free.

How much could each child’s CTF be worth when children reach 18?

Together with the Government payments, families saving as little as £10 a month into their child’s account could provide their child with a nest egg of an estimated £4,500 at age 18.  This will be even higher for children in families with low incomes or for disabled children, who receive extra contributions from the Government.

An online calculator is available at www.childtrustfund.gov.uk