Ruth Kelly, MP at Bolton West CLP

This is the text of the talk by Ruth Kelly, MP to an all-members meeting of Bolton West Constituency Labour Party on 20th September 2001.

Cllr. Clifford Morris, Chair of Bolton West Constituency Labour Party, opened a packed all-members meeting at the Party Headquarters, St. George's Road, Bolton.

The meeting began with a moment of silence in memory of Horwich Branch member Lambert Sayle who had died recently.

Clifford introduced Ruth Kelly, our MP who addressed the meeting.

Ruth's Address

US Terrorist Attacks

She began by stating that the events of the last ten days (the terrorist attacks on New York and Washington) have changed the context of politics at Westminster completely. There is no other topic of conversation amongst MPs, Peers and Ministers. She believed that it would be huge theme for a very long time to come. It's likely that the Party will change completely its Annual Conference in early October to spend a whole day on the issue and the Government's response to the terrorists.

Ruth said that she had been at work in the Treasury on Tuesday when the disaster occurred and coincidentally had to go to Canary Wharf in the afternoon to meet one of the British companies that had the most employees in the World Trade Centre. She described the people there as being "dreadfully affected and shocked".

Parliament was recalled on the Friday after and Ian Duncan-Smith made his debut as Opposition Leader. He acquitted himself well and Tony Blair was excellent. The response of the US will be crucial to maintaining the strength of unity. Ruth said that she was very relieved that they hadn't done anything hasty. The broad coalition will only stay intact if the US gives a measured and reasonable response.

Ruth said that her portfolio as Economic Secretary includes Financial Services and she is therefore involved in the fallout affecting insurance companies, money laundering, etc.

There will be a world economic fallout but we shouldn't overestimate the effect. The airlines, aircraft and insurance industries will be affected and the world and UK economies will slow. But we should weather the slowdown in the UK quite well. She said that the Chancellor is watching the situation very carefully and the Monetary Policy Committee has reduced interest rates by ¼%. The economic effect could have been much worse if Wall Street itself had been hit.

Privatisation of Public Services

Ruth touched upon one other major topic likely to be debated at the Labour Party Conference, the Government's plans to introduce greater privatisation into the public services, especially the NHS. She believed that the possible confrontation at the Conference on this topic was likely to be defused. A lot of concessions have been made to employees' rights, especially on pay and pensions.

Questions and Answers

Ruth then answered questions on the following topics:

US Terrorist Attacks

Q.     Will there be a crash as in the 1930s?
A.     Ruth said that she thought almost certainly not.

Q.     Aren't the airlines milking this for all they can? Many of them were in trouble before this disaster and our Government shouldn't bail them out.
A.     There will be a big fall in airline business and this will have a knock on effect to the aircraft manufacturers. Ruth believed that there would be massively reduced tourism from the USA and this would affect areas already hit by foot and mouth disease. She said that it is unlikely that the Government will give major aid to the airlines.

Q.     About the effects of US action against the ordinary people of Afghanistan.
A.     The real unfairness in this situation is between the wealth of the West and the poverty of some parts of the Middle East and countries such as Afghanistan. This has to be dealt with as part of the programme to rid the world of terrorism.

Q.     What will the US do?
A.     No-one knows what is in the mind of the US Government yet. The main emphasis of most other world leaders is aimed at influencing the US to not do anything too hasty as a "knee jerk" reaction that could backfire. There has to be a long drawn out programme to deal with world terrorism and the present situation must not be inflamed even more.

Q.     Why weren't the attacks foreseen?
A.     There has obviously been a failure of the intelligence services. The same thing could happen in the UK. Ruth said that there has been nowhere near enough effort put into the intelligence services to deal with terrorism. MI5 has disbanded its anti-terrorism unit in the last few years. Much greater efforts need to be made to prevent money laundering and movement of money to and from terrorist organisations, their leaders and supporters.

Ruth said that the balance between liberty and security has been wrong. This needs to be looked at and perhaps an identity card system should be introduced in the UK.

There was general unease about the introduction of identity cards. One member said that they wouldn't help. Terrorists who can steal and forge passports would have no difficulty with identity cards, they would have to be made compulsory to have and to carry and this would be an infringement of our rights. In apartheid South Africa identity cards or passes were used to control people dependant on their ethnicity and political activity.

Public Services

Q.     Isn't the Government going to be in headlong conflict with the unions over privatisation of the public services?
A.     It'll be an ongoing argument. The last election was a "stay" for the Government. The voters gave Labour a chance to deliver on their public service promises until the next election and this was the issue that dominated the last. We mustn't forget that the debate in June was between the Tories advocating tax cuts and Labour promising better services. The electors went with us and we must do all we can to meet our pledges.

The Government has only 4 - 5 years to produce real change and that is a very tough challenge indeed. The priorities will be Health, Secondary Education and transport and these MUST improve before the next election if we are to win a third term.

The problem is that so much extra money is going into public services that some Departments are having trouble spending it. The vast majority of the improvements in the public sector will by Government money being spent on the public services, not by private financing. There will be some private money but the Government is totally committed to maintaining services free at the point of delivery. Ruth said that the problem seems to have got rather a lot out of hand.

One member present said that the elderly person awaiting a hip replacement operation would not care if it were carried out in an NHS or a private hospital as long as a good job was done and was without charge.

Ruth admitted that the Government had made mistakes in the past with the PFI system but has learned its lessons. They have learned how to compare the real value for money between public sector and PFI projects. In many cases the public sector is winning over private organisations when tenders are sought.

She reiterated that the pay and pensions of public servants involved in any privatised enterprises would be protected, but this didn't satisfy all those present.

In response to a question on public/private partnerships, Ruth said that a good example of this was in the New Deal. Government working together with private enterprise had smashed youth unemployment. Other public/private partnerships have been successful in Bolton too, for example the Middlebrook development.

The Railways

Q.     Isn't there a strong case for renationalisation of the railways?
A.     Ruth admitted that rail privatisation had been a disaster and that there would need to be a radical reorganisation. But she doubted that it would be better run in the public sector with the present fragmented structure.

Ruth said that one problem is that until 1997 - 1999 there wasn't even a record of what the state owned. A comprehensive audit turned up many oddities and properties, etc. no longer needed. There is nothing wrong in selling these off and using the money raised to do things that are needed.

She said that the public sector just has to do things better and more efficiently and as well as some private sector organisations. She believed that a lot of public organisations need to attract much better managers than at present.

Higher Education

Q.     The Government make great improvements to primary education in its first term and seems to be concentrating on secondary education now. But what about further and higher education? We have no more working class children going to university than 25 years ago, tuition fees are just a tax being collected by the universities and colleges for the Exchequer, and the prospect of finishing their education up to £10,000 in debt is putting many young people off. All of this allied with redundancies, poor morale and low or no salary increases is having a very negative on teaching staff. What is the Government going to do?
A.     Ruth said that the Government is starting from the bottom by concentrating first on primary and now on secondary schools. Further and higher education must and will be tackled next. She believed that the Government would look again at the financial implications to students of embarking on college and university courses. She hinted that mistakes had been made and that these might have to be rectified.

The Euro

Q.     When will Britain adopt the Euro?
A.     Ruth said that Tony Blair had intended to speak on this at the TUC but the US terrorist attacks had prevented him from doing so. He touched on how in Labour's second term we have to emphasise the benefits of Europe and the Euro. When we enter the single currency will depend very much on the economic cycle. The Government is, in principle, very much in favour of the single currency but will not adopt it if it doesn't benefit the country.

Vote of Thanks

Clifford drew the meeting to a close and he and those present thanked Ruth for her attendance.

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