Mr Speaker.

I am pleased to introduce to the House the first Spring Statement.

The UK was the only major economy to make hundreds of tax and spending changes twice a year.

And major international organisations and UK professional bodies alike have been pressing for change.

In 2016 I took the decision to move to a single fiscal event in the Autumn.

Giving greater certainty to families and businesses ahead of the new financial year.

And allowing more time for stakeholder and parliamentary engagement on potential fiscal changes.

Today’s statement will update the House on the economic and fiscal position.

Report progress on announcements made at the two budgets last year.

And launch further consultations ahead of Budget 2018, as set out today in my Written Ministerial Statement.

I won’t be producing a Red Book today Mr Speaker.

[political content removed]

Mr Speaker.

I am pleased today to report to the House on a UK economy that has grown in every year since 2010.

And under Conservative Leadership now has a manufacturing sector enjoying its longest unbroken run of growth for fifty years.

An economy which has added 3 million jobs.

And seen:

• every single region of the UK with higher employment and lower unemployment than in 2010
• seen the wages of the lowest paid up by almost 7% above inflation since April 2015
• [political content removed]

Solid progress towards building an economy that works for everyone.

[political content removed]

I, meanwhile, am at my most positively Tigger-like.

As I contemplate a country which faces the future with unique strengths.

Our language is the global language of business.

Our legal system is the jurisdiction of choice for commerce.

We host the world’s most global city, and its international finance and professional services capital.

Our companies are in the vanguard of the technological revolution.

While our world-class universities are delivering the breakthrough discoveries and inventions that are powering it.

British culture and talent reaches huge audiences across the globe.

And our tech sector is attracting skills and capital from the four corners of the earth.

With a new tech business being founded somewhere in the UK every hour.

Producing world-class products including apps like TransferWise, CityMapper,

And Matt Hancock.

Mr Speaker.

Today the OBR delivers its second report for the fiscal year 2017-18.

And I thank Robert Chote and his team for their work.

It forecasts more jobs.

Rising real wages.

Declining inflation.

A falling deficit.

And a shrinking debt.

The economy grew by 1.7% in 2017, compared to 1.5% forecast at the Budget.

And the OBR have revised up their forecast for 2018 from 1.4% to 1.5%.

Forecast growth is then unchanged at 1.3% in 2019 and 20, before picking up to 1.4% in 21 and 1.5% in 22.

That’s the OBR’s forecast Mr Speaker.

But forecasts are there to be beaten.

As a nation, we did it in 2017.

And we should make it our business to do so again!

Our remarkable jobs story is set to continue.

With the OBR forecasting more jobs in every year of this parliament.

And over 500,000 more people enjoying the security of a regular pay-packet by 2022.

I am pleased to report that the OBR expect inflation, which is currently above target at 3%.

To fall back to target over the next 12 months.

Meaning that real wage growth is expected to be positive from the first quarter of 18-19, and to increase steadily thereafter.

Mr Speaker.

I reported in the Autumn that borrowing was due to fall in every year of the forecast.

And debt to fall as a share of GDP from 2018-19.

The OBR confirms this today.

And further revises down debt and borrowing in every year.

Borrowing is now forecast to be £45.2 billion this year.

£4.7bn lower than forecast in November.

And £108bn lower than in 2010.

[political content removed]

As a percentage of GDP, borrowing is forecast to be 2.2% in 17-18.

Falling to 1.8% in 18-19, 1.6% in 19-20, then 1.3%, 1.1% and finally 0.9% in ‘22-‘23.

Meaning that in 18-19 we will run a small current surplus, borrowing only for capital investment.

And we are forecast to meet our cyclically adjusted borrowing target in ‘20-21 with £15.4bn headroom to spare.

Broadly as forecast at the Budget.

Mr Speaker,

The more favourable outlook for borrowing means the debt forecast is nearly 1% lower than in November.

Peaking at 85.6% of GDP in 17-18.

And then falling to 85.5% in 18-19, then 85.1%, 82.1%, 78.3%, and finally 77.9% in 2022-23.

The first sustained fall in debt in 17 years.

A turning point in the nation’s recovery from the financial crisis of a decade ago.

Light at the end of the tunnel.

Another step on the road to rebuilding the public finances [political content removed]

[political content removed]

Mr Speaker.

In Autumn 2016, I changed the fiscal rules to give us more flexibility to adopt a balanced approach to repairing the public finances.

Reducing debt.

Not for some ideological reason.

But to secure our economy against future shocks.

Because we [political content removed] are not so naïve as to think we have abolished the economic cycle.

Because we want to see taxpayers’ money funding our schools and hospitals, not wasted on debt interest.

And because we want to give the next generation a fair chance.

But I do not agree with those who argue that every available penny must be used to reduce the deficit.

And nor do I agree with the fiscal fantasists [political content removed] who argue that every available penny should be spent immediately.

We will continue to deliver a balanced approach.

Balancing debt reduction against the need for investment in Britain’s future.

Support to hard-working families through lower taxes.

And our commitment to our public services.

Judge me by my record, Mr Speaker [political content removed].

Since Autumn Statement 2016, I have committed to £60 billion of new spending.

Shared between long-term investment in Britain’s future.

And support for our public services.

With almost £9 billion extra for our NHS and our social care system.

£4bn going into the NHS in 18/19 alone.

And as I promised at the Autumn Budget.

More to come if, as I hope, management and Unions reach an agreement on a pay modernisation deal for our nation’s Nurses and Agenda for Change staff.

Who have worked tirelessly since the Autumn in very challenging circumstances to provide the NHS care that we all value so highly.

£2.2 billion more on education and skills.

And £31 billion going to fund infrastructure, R&D and housing through the National Productivity Investment Fund.

Taking public investment in our schools, hospitals, and infrastructure in this parliament to its highest sustained level in 40 years.

And at the same time we have cut taxes for 31 million working people by raising the personal allowance again in line with our manifesto commitment.

Taking more than 4 million people out of tax altogether since 2010.

Freezing fuel duty for an eighth successive year, taking the saving for a typical car driver to £850 [political content removed].

And raising the National Living Wage to £7.83 from next month, giving the lowest paid in our society a well-deserved pay rise of over £2,000 for a full-time worker since 2016.

Mr Speaker.

Since becoming Chancellor, I have provided an extra £11 billion of funding for 2018/19.

To help with short-term public spending pressures.

And to invest in Britain’s future.

In the longer term, I can confirm that, at this year’s Budget I will set an overall path for public spending for 2020 and beyond.

With a detailed Spending Review to take place in 2019.

To allocate funding between Departments.

That is how responsible people Budget.

First you work out what you can afford.

Then you decide what your priorities are.

And then you allocate between them.

And if, in the Autumn, the public finances continue to reflect the improvements that today’s report hints at.

Then, in accordance with our balanced approach, and using the flexibility provided by the fiscal rules.

I would have capacity to enable further increases in public spending and investment in the years ahead.

While continuing to drive value for money to ensure that not a single penny of precious taxpayers’ money is wasted.

A balanced approach.

Getting our debt down.

Supporting our public services.

Investing in our nation’s future.

Keeping taxes low.

Building a Britain fit for the future.

And an economy that works for everyone.

Updates since the Budget.

Mr Speaker.

There is much still to do.

Since Autumn 2016 we have set out our plan to back the enterprise and ambition of British business and the hard work of the British people.

A plan to unleash our creators and our innovators.

Our inventors and our discoverers.

To embrace the new technologies of the future.

And to deliver the skills we will need to benefit from them.

To tackle our long-standing productivity challenges.

And to say more loudly than ever that our economy will remain open and outward-looking.

Confident to compete with the best in the world.

We choose to champion those who create the jobs and the wealth on which our prosperity and our public services both depend.

Not to demonise them.

Mr Speaker,

[political content removed]

The market economy embraces talent and creates opportunity.

Provides jobs for millions and the tax revenues that underpin our public services.

So we will go on supporting British businesses.

We are reducing business rates by over £10 billion.

And we committed at Autumn Budget 2017 to move to triennial revaluations from 2022.

Today I am pleased to announce that we will bring forward the next business rates revaluation to 2021 and make the triennial reviews from that date.

We will launch a Call for Evidence to understand how best we can help the UK’s least productive businesses to learn from, and catch-up with, the most productive.

And another on how we can eliminate the continuing scourge of late payments – a key ask from small business.

Because Mr Speaker, we are the champions of small businesses and the entrepreneur.

Since the Budget, we have made substantial progress in our negotiations with the European Union.

To deliver a Brexit that supports British jobs, businesses and prosperity.

And I look forward to another important step forward at the European Council next week.

But we will continue to prepare for all eventualities.

And today my RHF the Chief Secretary is publishing the Departmental allocations of over £1.5 billion of Brexit preparation funding for 2018-19 which I announced at the Autumn Budget.

Our Modern Industrial Strategy sets out our plan to keep Britain at the forefront of new technologies.

With the biggest increase in public R&D spending for four decades.

Much of this new technology depends on high-speed broadband.

And today I can make the first allocations of the £190 million local full fibre challenge fund announced at Autumn Budget and confirm £25 million for the first 5G testbeds.

As our economy changes, we must ensure people have the skills they need to seize the opportunities ahead.

So we’ve committed over £500 million a year to T-Levels, the most ambitious post-16 reforms in 70 years.

And from next month £50 million will be available to help employers prepare for the rollout of T-Level work placements.

Last week, the Education Secretary and I chaired the first meeting of the National Retraining Partnership between Government, the TUC and the CBI.

And I can re-assure the House, Mr Speaker.

[political content removed]

But there was a clear and shared commitment to training, to prepare the British people for a better future ahead.

And next month our £29 million construction skills fund will open for bids to fund up to 20 construction skills villages around the country.

We’re committed as a government to delivering 3 million apprenticeship starts by 2020 with the support of business through the apprenticeship levy.

But we recognise the challenges the new system presents to some small businesses looking to employ an apprentice.

So I can announce today that my Right Honourable Friend the Education Secretary will release up to £80 million of funding to support those small businesses in engaging an apprentice.

We publish a consultation on improving the way the tax system supports self-funded training by employees and the self-employed.

And because we currently understand more about the economic pay-back from investing in our infrastructure than we do about investment in our people.

I have asked the ONS to work with us on developing a more sophisticated measure of human capital.

So that future investment can be better targeted.

Mr Speaker, we’re undertaking the largest road building programme since the ‘70s.

As Transport Secretary, I gave the green light to fund the new bridge across the River Mersey in 2011.

And I was delighted to see it open late last year.

The largest infrastructure project in Europe, Crossrail, is due to open in just 9 months’ time.

We’re making progress on our plans to deliver the Cambridge-Milton Keynes-Oxford Corridor.

We’re devolving powers and budgets to elected mayors across the Northern Powerhouse and Midlands Engine.

We’re in negotiations for city deals with Stirling and Clackmannanshire, Tay Cities, Borderlands, North Wales, Mid Wales, and Belfast.

And today we invite proposals from cities across England for the £840 million fund I announced at the Budget to deliver on their local transport priorities.

As part of our plans to spread growth and opportunity to all parts of this United Kingdom.

And at the heart of our plan for building an economy that works for everyone is our commitment to tackle the challenges in our housing market.

With an investment programme of £44 billion to raise housing supply to 300,000 a year by the mid-2020s.

And today I can update the House.

We are working currently, with my Right Honourable Friend the Housing Minister, with 44 authorities who have bid into the £4.1 billion Housing Infrastructure Fund, to unlock homes in areas of high demand.

We are concluding housing deals with ambitious authorities who have agreed to deliver above their Local Housing Need.

And I can announce today that we have just agreed a deal with the West Midlands to have committed to deliver 215,000 homes by 2030-31, facilitated by a £100 million grant from the Land Remediation Fund.

And my Right Honourable Friend the Housing Minister will make further announcements on the over the next few days on the Housing Infrastructure Fund.

We will more than double the size of the Housing Growth Partnership with Lloyds Banking Group to £220 million, to help providing additional finance for small builders.

And London will receive an additional £1.7 billion to deliver a further 26,000 affordable homes, including homes for social rent, taking total affordable housing delivery in London to over 116,000 by the end of 2021-22.

Mr Speaker, my Right Honourable Friend for West Dorset has outlined his initial findings on the gap between planning permissions granted and housing completions.

In a letter which I have placed in the Library of the House.

And I look forward to his full report at the Budget.

And I am delighted to inform the House that an estimated 60,000 First Time Buyers have already benefited from the Stamp Duty relief I announced at the Autumn Budget.

[political content removed]

In the Autumn, we published a paper on taxing large digital businesses in the global economy.

And today we follow up with a publication that explores potential solutions.

And I look forward to discussing this issue with G20 Finance Ministers in Buenos Aires at the weekend.

We also publish a call for evidence on how online platforms can help their users to pay the right amount of tax.

We will consult on a new VAT collection mechanism for online sales.

To ensure that the VAT consumers pay actually reaches the Treasury.

And we will call for evidence, too, on how to encourage cashless and digital payments, while ensuring cash remains available to those who need it.

Mr Speaker.

This government is determined that our generation should leave the natural environment in a better state than we found it.

And improve the quality of the air we breathe.

So we will publish a call for evidence on whether the use of non-agricultural red diesel tax relief contributes to poor air quality in urban areas.

And following our successful intervention to incentivise green taxis, we’ll help the Great British White Van driver go green with a consultation on reduced VED rates for the cleanest vans.

And follow up on the vital issue of plastic littering and the threat to our oceans.

With a call for evidence to support us in delivering on our vow to tackle this complex issue.

It will look at the whole supply chain for single use plastics.

At alternative materials.

Reusable options.

And recycling opportunities.

And it will look at how the tax system can help drive the technological progress and behavioural change we need.

Not as a way of raising revenue.

But as a way of changing behaviour.

And encouraging innovation.

We’ll commit to investing to develop new, greener, products and processes.

Funded from the revenues that are raised.

And as a downpayment Mr Speaker, we’ll award £20m now from existing departmental budgets to businesses and universities, to stimulate new thinking and rapid solutions in this area during the call for evidence.

Mr Speaker,

We are delivering on our plan.

With a balanced approach.

Restoring the public finances.

Investing in our economy and our public services.

Raising productivity through our modern industrial strategy.

Building the homes our people need.

Tackling the environmental challenges that threaten our future.

Embracing technological change, seizing the opportunities ahead.

As we build our vision of a country that works for everyone.

An economy where prosperity and opportunity are in reach of all.

Wherever they live.

Whatever their gender, colour, creed or background.

Where talent and hard work alone determine success.

A beacon of enterprise and innovation.

An outward looking, free-trading nation.

One that is confident that our best days lie ahead of us.

A force for good in the world.

A country we can all be proud to pass on to our children.

And, I commend this statement to the House.

Ask yourself, what would happen if it was revealed that Theresa May had been a member of a closed Facebook group which was a hotbed of racist bigotry? What if Theresa May had been engaged in that group and organised meetings with its members, then tellingly left the group when she became Conservative leader?

We know what would happen. Yet the Left is full of excuses for Jeremy Corbyn. After blogger David Collier’s expose, perhaps the Labour Party needs to launch another investigation into Anti-Semitism.

 

 

‘As reported by the Sun and a few of other newspapers, Public Health England is going ahead with its insane plan to withdraw a fifth of calories from the food supply. Not quite the whole food supply, as the quango has admitted that it can’t take energy out of vegetables, but the targets apply to the following:

Read more at Christopher Snowdon’s Velvet Glove, Iron Fist. 

I am grateful to the Lord Mayor and all his team at the Mansion House for hosting us this afternoon. And in the midst of the bad weather, I would just like to take a moment before I begin my speech today to thank everyone in our country who is going the extra mile to help people at this time. I think of our emergency services and armed forces working to keep people safe; our NHS staff, care workers, and all those keeping our public services going; and the many volunteers who are giving their time to help those in need. Your contribution is a special part of who we are as a country – and it is all the more appreciated at a moment like this.

FIVE TESTS

Now I am here today to set out my vision for the future economic partnership between the United Kingdom and the European Union. There have been many different voices and views in the debate on what our new relationship with the EU should look like. I have listened carefully to them all. But as we chart our way forward with the EU, I want to take a moment to look back.

Eighteen months ago I stood in Downing Street and addressed the nation for my first time as Prime Minister. I made this pledge then, to the people that I serve: I know you’re working around the clock, I know you’re doing your best, and I know that sometimes life can be a struggle. The government I lead will be driven not by the interests of the privileged few, but by yours.

We will do everything we can to give you more control over your lives. When we take the big calls, we’ll think not of the powerful, but you. When we pass new laws, we’ll listen not to the mighty but to you. When it comes to taxes, we’ll prioritise not the wealthy, but you. When it comes to opportunity, we won’t entrench the advantages of the fortunate few. We will do everything we can to help anybody, whatever your background, to go as far as your talents will take you.

We are living through an important moment in our country’s history. As we leave the European Union, we will forge a bold new positive role for ourselves in the world, and we will make Britain a country that works not for a privileged few, but for every one of us. That pledge, to the people of our United Kingdom is what guides me in our negotiations with the EU. And for me that means five things:

First, the agreement we reach with the EU must respect the referendum. It was a vote to take control of our borders, laws and money. And a vote for wider change, so that no community in Britain would ever be left behind again. But it was not a vote for a distant relationship with our neighbours.

Second, the new agreement we reach with the EU must endure. After Brexit both the UK and the EU want to forge ahead with building a better future for our people, not find ourselves back at the negotiating table because things have broken down.

Third, it must protect people’s jobs and security. People in the UK voted for our country to have a new and different relationship with Europe, but while the means may change our shared goals surely have not – to work together to grow our economies and keep our people safe.

Fourth, it must be consistent with the kind of country we want to be as we leave: a modern, open, outward-looking, tolerant, European democracy. A nation of pioneers, innovators, explorers and creators. A country that celebrates our history and diversity, confident of our place in the world; that meets its obligations to our near neighbours and far off friends, and is proud to stand up for its values.

And fifth, in doing all of these things, it must strengthen our union of nations and our union of people. We must bring our country back together, taking into account the views of everyone who cares about this issue, from both sides of the debate. As Prime Minister it is my duty to represent all of our United Kingdom, England, Scotland, Wales and Northern Ireland; north and south, from coastal towns and rural villages to our great cities.

So these are the five tests for the deal that we will negotiate. Implementing the decision of the British people; reaching an enduring solution; protecting our security and prosperity; delivering an outcome that is consistent with the kind of country we want to be; and bringing our country together, strengthening the precious union of all our people.

A CRUCIAL MOMENT

We are now approaching a crucial moment. There is no escaping the complexity of the task ahead of us. We must not only negotiate our exit from an organisation that touches so many important parts of our national life. We must also build a new and lasting relationship while, given the uncertainty inherent in this negotiation, preparing for every scenario. But we are making real progress.

At the end of last year, we agreed the key elements of our withdrawal. We are in the process of turning that agreement into draft legal text.  We have made clear our concerns about the first draft the Commission published on Wednesday – but no-one should be in any doubt about our commitment to the Joint Report we agreed in December. We are close to agreement on the terms of an implementation period which was a key element of December’s deal.

Of course some points of difference remain – but I am confident these can be resolved in the days ahead. Both the UK and the EU are clear this implementation period must be time-limited and cannot become a permanent solution. But it is vital to give governments, businesses and citizens on both sides the time they need to prepare for our new relationship.With this agreed, I want both sides to turn all our attention and efforts to that new relationship.

But before we can do that, we need to set out in more detail what relationship we want, building on my Lancaster House and Florence speeches. So last month, I spoke in Munich about the security partnership we seek. And today, I want to talk about the other pillar of that relationship: how we build our economic partnership.

EXISTING MODELS WILL NOT WORK

In my speech in Florence, I set out why the existing models for economic partnership either do not deliver the ambition we need or impose unsustainable constraints on our democracy.

For example, the Norway model, where we would stay in the single market, would mean having to implement new EU legislation automatically and in its entirety – and would also mean continued free movement. Others have suggested we negotiate a free trade agreement similar to that which Canada has recently negotiated with the EU – or trade on World Trade Organisation terms. But these options would mean a significant reduction in our access to each other’s markets compared to that which we currently enjoy.

And this would mean customs and regulatory checks at the border that would damage the integrated supply chains that our industries depend on and be inconsistent with the commitments that both we and the EU have made in respect of Northern Ireland.

This is a wider issue in our negotiations and I want to dwell on this for a minute. Successive British governments have worked tirelessly – together with all the parties in Northern Ireland and with the Irish Government – to bring about the historic achievement of peace. This is an achievement that we should all be proud of, and protect. That is why I have consistently put upholding the Belfast Agreement at the heart of the UK’s approach.

Our departure from the EU causes very particular challenges for Northern Ireland, and for Ireland.  We joined the EU together 45 years ago.  It is not surprising that our decision to leave has caused anxiety and a desire for concrete solutions.

We have been clear all along that we don’t want to go back to a hard border in Ireland. We have ruled out any physical infrastructure at the border, or any related checks and controls.But it is not good enough to say, ‘We won’t introduce a hard border; if the EU forces Ireland to do it, that’s down to them’. We chose to leave; we have a responsibility to help find a solution. But we can’t do it on our own. It is for all of us to work together. And the Taoiseach and I agreed when we met recently that our teams and the Commission should now do just that.

I want to make one final point. Just as it would be unacceptable to go back to a hard border between Northern Ireland and Ireland, it would also be unacceptable to break up the United Kingdom’s own common market by creating a customs and regulatory border down the Irish Sea. My personal commitment to this is clear. As Prime Minister of the whole United Kingdom, I am not going to let our departure from the European Union do anything to set back the historic progress that we have made in Northern Ireland – nor will I allow anything that would damage the integrity of our precious Union.

FACING UP TO SOME HARD FACTS

So existing models do not provide the best way forward for either the UK or the EU. But before I turn to what a new and better model might look like, I want to be straight with people – because the reality is that we all need to face up to some hard facts.We are leaving the single market.  Life is going to be different. In certain ways, our access to each other’s markets will be less than it is now. How could the EU’s structure of rights and obligations be sustained, if the UK – or any country – were allowed to enjoy all the benefits without all of the obligations? So we need to strike a new balance. But we will not accept the rights of Canada and the obligations of Norway.

The second hard fact is that even after we have left the jurisdiction of the ECJ, EU law and the decisions of the ECJ will continue to affect us. For a start, the ECJ determines whether agreements the EU has struck are legal under the EU’s own law – as the US found when the ECJ declared the Safe Harbor Framework for data sharing invalid. When we leave the EU, the Withdrawal Bill will bring EU law into UK law. That means cases will be determined in our courts. But, where appropriate, our courts will continue to look at the ECJ’s judgments, as they do for the appropriate jurisprudence of other countries’ courts.

And if, as part of our future partnership, Parliament passes an identical law to an EU law, it may make sense for our courts to look at the appropriate ECJ judgments so that we both interpret those laws consistently. As I said in Munich, if we agree that the UK should continue to participate in an EU agency the UK would have to respect the remit of the ECJ in that regard.

But, in the future, the EU treaties and hence EU law will no longer apply in the UK. The agreement we reach must therefore respect the sovereignty of both the UK and the EU’s legal orders. That means the jurisdiction of the ECJ in the UK must end. It also means that the ultimate arbiter of disputes about our future partnership cannot be the court of either party.

The next hard fact is this. If we want good access to each other’s markets, it has to be on fair terms. As with any trade agreement, we must accept the need for binding commitments – for example, we may choose to commit some areas of our regulations like state aid and competition to remaining in step with the EU’s.

The UK drove much of the policy in this area and we have much to gain from maintaining proper disciplines on the use of subsidies and on anti-competitive practices. Furthermore, as I said in Florence, we share the same set of fundamental beliefs; a belief in free trade, rigorous and fair competition, strong consumer rights, and that trying to beat other countries’ industries by unfairly subsidising one’s own is a serious mistake.

And in other areas like workers’ rights or the environment, the EU should be confident that we will not engage in a race to the bottom in the standards and protections we set. There is no serious political constituency in the UK which would support this – quite the opposite.

Finally, we need to resolve the tensions between some of our key objectives.We want the freedom to negotiate trade agreements with other countries around the world.  We want to take back control of our laws.  We also want as frictionless a border as possible between us and the EU – so that we don’t damage the integrated supply chains our industries depend on and don’t have a hard border between Northern Ireland and Ireland.

But there are some tensions in the EU’s position too – and some hard facts for them to face as well. The Commission has suggested that the only option available to the UK is an ‘off the shelf’ model. But, at the same time, they have also said that in certain areas none of the EU’s third country agreements would be appropriate. And the European Council’s Guidelines aspire to a balanced, ambitious, and wide-ranging deal, with common rules in a number of areas to ensure fair and open competition.

This would not be delivered by a Canada-style deal – which would not give them the breadth or depth of market access that they want. And it is hard to see how it would be in the EU’s interests for the UK’s regulatory standards to be as different as Canada’s.

Finally, we both need to face the fact that this is a negotiation and neither of us can have exactly what we want.

FUTURE ECONOMIC PARTNERSHIP

But I am confident we can reach agreement. We both want good access to each other’s markets; we want competition between us to be fair and open; and we want reliable, transparent means of verifying we are meeting our commitments and resolving disputes. But what is clear is that for us both to meet our objectives we need to look beyond the precedents, and find a new balance.

As on security, what I am seeking is a relationship that goes beyond the transactional to one where we support each other’s interests. So I want the broadest and deepest possible partnership – covering more sectors and co-operating more fully than any Free Trade Agreement anywhere in the world today. And as I will go on to describe we will also need agreements in a range of areas covering the breadth of our relationship. I believe this is achievable because it is in the EU’s interests as well as ours.

The EU is the UK’s biggest market – and of course the UK is also a big market for the EU. And furthermore, we have a unique starting point, where on day one we both have the same laws and rules. So rather than having to bring two different systems closer together, the task will be to manage the relationship once we are two separate legal systems. To do so, and to realise this level of ambition, there are five foundations that must underpin our trading relationship.

First, our agreement will need reciprocal binding commitments to ensure fair and open competition. Such agreements are part and parcel of any trade agreement. After all, why would any country enter into a privileged economic partnership without any means of redress if the other party engaged in anti-competitive practices?

But the level of integration between the UK and EU markets and our geographical proximity mean these reciprocal commitments will be particularly important in ensuring that UK business can compete fairly in EU markets and vice versa. A deep and comprehensive agreement with the EU will therefore need to include commitments reflecting the extent to which the UK and EU economies are entwined.

Second, we will need an arbitration mechanism that is completely independent – something which, again, is common to Free Trade Agreements.This will ensure that any disagreements about the purpose or scope of the agreement can be resolved fairly and promptly.

Third, given the close relationship we envisage, we will need to have an ongoing dialogue with the EU, and to ensure we have the means to consult each other regularly. In particular we will want to make sure our regulators continue to work together; as they do with regulators internationally. This will be essential for everything from getting new drugs to patients quickly to maintaining financial stability. We start from the place where our regulators already have deep and long-standing relationships. So the task is maintaining that trust; not building it in the first place.

Fourth, we will need an arrangement for data protection. I made this point in Munich in relation to our security relationship. But the free flow of data is also critical for both sides in any modern trading relationship too. The UK has exceptionally high standards of data protection. And we want to secure an agreement with the EU that provides the stability and confidence for EU and UK business and individuals to achieve our aims in maintaining and developing the UK’s strong trading and economic links with the EU.

That is why we will be seeking more than just an adequacy arrangement and want to see an appropriate ongoing role for the UK’s Information Commissioner’s Office. This will ensure UK businesses are effectively represented under the EU’s new ‘one stop shop’ mechanism for resolving data protection disputes.

And fifth, we must maintain the links between our people. EU citizens are an integral part of the economic, cultural and social fabric of our country. I know that UK nationals are viewed in entirely the same way by communities across the EU. And this is why at every stage of these negotiations, I have put the interests of EU citizens and UK nationals at the heart of our approach. We are clear that as we leave the EU, free movement of people will come to an end and we will control the number of people who come to live in our country.

But UK citizens will still want to work and study in EU countries – just as EU citizens will want to do the same here, helping to shape and drive growth, innovation and enterprise. Indeed, businesses across the EU and the UK must be able to attract and employ the people they need. And we are open to discussing how to facilitate these valuable links.

Reciprocal commitments to ensure fair and open competition, an independent arbitration mechanism, an ongoing dialogue, data protection arrangements and maintaining the links between our people. These are the foundations that underpin the ambition of this unique and unprecedented partnership. It will then need to be tailored to the needs of our economies.

This follows the approach the EU has taken with its trade agreements in the past – and indeed with its own single market as it has developed. The EU’s agreement with Ukraine sees it align with the EU in some areas but not others. The EU’s agreement with South Korea contains provisions to recognise each others’ approvals for new car models, whereas their agreement with Canada does not. Equally, the EU’s agreement with Canada contains provisions to recognise each others’ testing on machinery; its agreement with South Korea does not.

The EU itself is rightly taking a tailored approach in what it is seeking with the UK. For example, on fisheries, the Commission has been clear that no precedents exist for the sort of access it wants from the UK. The fact is that every Free Trade Agreement has varying market access depending on the respective interests of the countries involved. If this is cherry-picking, then every trade arrangement is cherry-picking.

Moreover, with all its neighbours the EU has varying levels of access to the Single Market, depending on the obligations those neighbours are willing to undertake. What would be cherry-picking would be if we were to seek a deal where our rights and obligations were not held in balance. And I have been categorically clear that is not what we are going to do. I think it is pragmatic common sense that we should work together to deliver the best outcome for both sides.

GOODS

Let me start with how we do this for goods. This is the area where the single market is most established and both the UK and the EU have a strong commercial interest in preserving integrated supply chains that have built up over forty years of our membership. When it comes to goods, a fundamental principle in our negotiating strategy should be that trade at the UK-EU border should be as frictionless as possible.

That means we don’t want to see the introduction of any tariffs or quotas. And – as the Secretary of State for Exiting the European Union set out in his speech in Vienna last week – we must ensure that, as now, products only need to undergo one series of approvals, in one country, to show that they meet the required regulatory standards. To achieve this we will need a comprehensive system of mutual recognition.

The UK will need to make a strong commitment that its regulatory standards will remain as high as the EU’s. That commitment, in practice, will mean that UK and EU regulatory standards will remain substantially similar in the future. Many of these regulatory standards are themselves underpinned by international standards set by non-EU bodies of which we will remain a member – such as the UN Economic Commission for Europe, which sets vehicle safety standards. Countries around the world, including Turkey, South Africa, South Korea, Japan and Russia, are party to the agreement.

As I said in my speech in Florence this could be achieved in different ways. Our default is that UK law may not necessarily be identical to EU law, but it should achieve the same outcomes. In some cases Parliament might choose to pass an identical law – businesses who export to the EU tell us that it is strongly in their interest to have a single set of regulatory standards that mean they can sell into the UK and EU markets.

If the Parliament of the day decided not to achieve the same outcomes as EU law, it would be in the knowledge that there may be consequences for our market access. And there will need to be an independent mechanism to oversee these arrangements.

We will also want to explore with the EU, the terms on which the UK could remain part of EU agencies such as those that are critical for the chemicals, medicines and aerospace industries: the European Medicines Agency, the European Chemicals Agency, and the European Aviation Safety Agency. We would, of course, accept that this would mean abiding by the rules of those agencies and making an appropriate financial contribution. I want to explain what I believe the benefits of this approach could be, both for us and the EU.

First, associate membership of these agencies is the only way to meet our objective of ensuring that these products only need to undergo one series of approvals, in one country.

Second, these agencies have a critical role in setting and enforcing relevant rules. And if we were able to negotiate associate membership we would be able to ensure that we could continue to provide our technical expertise.

Third, associate membership could permit UK firms to resolve certain challenges related to the agencies through UK courts rather than the ECJ. For example, in the case of Switzerland, associate membership of the European Aviation Safety Agency means that airworthiness certifications are granted by its own aviation authority, and disputes are resolved through its courts. Without its membership, Swiss airlines would need to gain their certifications through another member state or through the Agency, and any dispute would need to be resolved through the ECJ.

Fourth it would bring other benefits too. For example, membership of the European Medicines Agency would mean investment in new innovative medicines continuing in the UK, and it would mean these medicines getting to patients faster as firms prioritise larger markets when they start the lengthy process of seeking authorisations. But it would also be good for the EU because the UK regulator assesses more new medicines than any other member state. And the EU would continue to access the expertise of the UK’s world-leading universities. And, of course, Parliament would remain ultimately sovereign. It could decide not to accept these rules, but with consequences for our membership of the relevant agency and linked market access rights.

Lastly to achieve as frictionless a border as possible and to avoid a hard border between Northern Ireland and Ireland, we also need an agreement on customs. The UK has been clear it is leaving the Customs Union. The EU has also formed a customs union with some other countries.

But those arrangements, if applied to the UK, would mean the EU setting the UK’s external tariffs, being able to let other countries sell more into the UK without making it any easier for us to sell more to them, or the UK signing up to the Common Commercial Policy. That would not be compatible with a meaningful independent trade policy. It would mean we had less control than we do now over our trade in the world. Neither Leave nor Remain voters would want that. So we have thought seriously about how our commitment to a frictionless border can best be delivered. And last year, we set out two potential options for our customs arrangement.

Option one is a customs partnership between the UK and the EU. At the border, the UK would mirror the EU’s requirements for imports from the rest of the world, applying the same tariffs and the same rules of origin as the EU for those goods arriving in the UK and intended for the EU. By following this approach, we would know that all goods entering the EU via the UK pay the right EU duties, removing the need for customs processes at the UK-EU border.

But, importantly, we would put in place a mechanism so that the UK would also be able to apply its own tariffs and trade policy for goods intended for the UK market. As we have set out previously, this would require the means to ensure that both sides can trust the system and a robust enforcement mechanism.

Option two would be a highly streamlined customs arrangement, where we would jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland.

First, measures to ensure the requirements for moving goods across borders are as simple as possible. This means we should continue to waive the requirement for entry and exit declarations for goods moving between the UK and the EU. And we should allow goods moving between the UK and the rest of the world to travel through the EU without paying EU duties and vice versa.

Second, measures to reduce the risk of delays at ports and airports. For example, recognising each other’s “trusted traders” schemes and drawing on the most advanced IT solutions so that vehicles do not need to stop at the border.

Third, we should continue our cooperation to mitigate customs duty and security risks.

And fourth, measures to reduce the cost and burden of complying with customs administrative requirements, including by maximising the use of automation.

And recognising the unique circumstances in Northern Ireland, and our shared commitments to avoiding a hard border, we should consider further specific measures. 80% of North-South trade is carried out by micro, small and medium sized businesses. So for smaller traders – who as members of the community are most affected but whose economic role is not systemically significant for the EU market – we would allow them to continue to operate as they do currently, with no new restrictions. And for larger traders we would introduce streamlined processes, including a trusted trader scheme that would be consistent with our commitments.

Both of these options for our future customs arrangement would leave the UK free to determine its own tariffs with third countries – which would simply not be possible in a customs union. I recognise that some of these ideas depend on technology, robust systems to ensure trust and confidence, as well as goodwill – but they are serious and merit consideration by all sides.

So to conclude on goods, a fundamental principle in our negotiating strategy is that trade at the UK-EU border should be as frictionless as possible with no hard border between Northern Ireland and Ireland. We believe this can be achieved via a commitment to ensure that the relevant UK regulatory standards remain at least as high as the EU’s and a customs arrangement.We recognise this would constrain our ability to lower regulatory standards for industrial goods. But in practice we are unlikely to want to reduce our standards: not least because the British public would rightly punish any government that did so at the ballot box.

AGRIFOOD AND FISHERIES

This approach to trade in goods is important for agriculture, food and drinks – but here other considerations also apply. We are leaving the Common Agricultural Policy and will want to take the opportunity that brings to reform our agriculture and fisheries management.

The UK has among the highest environmental and animal welfare standards of any nation on earth. As we leave the EU we will uphold environmental standards and go further to protect our shared natural heritage. And I fully expect that our standards will remain at least as high as the EU’s. But it will be particularly important to secure flexibility here to ensure we can make the most of the opportunities presented by our withdrawal from the EU for our farmers and exporters.

We are also leaving the Common Fisheries Policy. The UK will regain control over our domestic fisheries management rules and access to our waters. But as part of our economic partnership we will want to continue to work together to manage shared stocks in a sustainable way and to agree reciprocal access to waters and a fairer allocation of fishing opportunities for the UK fishing industry. And we will also want to ensure open markets for each other’s products.

SERVICES

Just as our partnership in goods needs to be deeper than any other Free Trade Agreement, so in services we have the opportunity to break new ground with a broader agreement than ever before. We recognise that certain aspects of trade in services are intrinsically linked to the single market and therefore our market access in these areas will need to be different. But we should only allow new barriers to be introduced where absolutely necessary.

We don’t want to discriminate against EU service providers in the UK. And we wouldn’t want the EU to discriminate against UK service providers. So we want to limit the number of barriers that could prevent UK firms from setting up in the EU and vice versa, and agree an appropriate labour mobility framework that enables UK businesses and self-employed professionals to travel to the EU to provide services to clients in person and that allows UK businesses to provide services to the EU over the phone or the internet. And we want to do the same for EU firms providing services to the UK. And given that UK qualifications are already recognised across the EU and vice versa – it would make sense to continue to recognise each other’s qualifications in the future.

There are two areas which have never been covered in a Free Trade Agreement in any meaningful way before – broadcasting and, despite the EU’s own best efforts in the Transatlantic Trade and Investment Partnership, financial services. But we have some ideas for how we can do this – and it is in all our interests to explore these.

On broadcasting, we recognise that we cannot have exactly the same arrangements with the EU as we do now. Currently, because of the “country of origin” principle, a company based in the UK can be licenced by Ofcom and broadcast into any EU member state and vice versa. The relevant directive will not apply to the UK, as we leave the EU, and relying solely on precedents will hurt consumers and businesses on both sides.

The UK’s creative hub leads to the development of products that European consumers want – the UK currently provides around 30% of the channels available in the EU. But equally, many UK companies have pan-European ownership, and there are 35 channels and on-demand services, which are offered in the UK but licensed in the EU. So we should explore creative options with an open mind, including mutual recognition which would allow for continued transfrontier broadcasting – recognising the enriching role that British broadcasters and programme makers play, not only in British – but more broadly in our common European – culture.

Similarly, on financial services, the Chancellor will be setting out next week how financial services can and should be part of a deep and comprehensive partnership. We are not looking for passporting because we understand this is intrinsic to the single market of which we would no longer be a member. It would also require us to be subject to a single rule book, over which we would have no say.

The UK has responsibility for the financial stability of the world’s most significant financial centre, and our taxpayers bear the risk, so it would be unrealistic for us to implement new EU legislation automatically and in its entirety. But with UK located banks underwriting around half of the debt and equity issued by EU companies and providing more than £1.1 trillion of cross-border lending to the rest of the EU in 2015 alone, this is a clear example of where only looking at precedent would hurt both the UK and EU economies.

As in other areas of the future economic partnership, our goal should be to establish the ability to access each others’ markets, based on the UK and EU maintaining the same regulatory outcomes over time, with a mechanism for determining proportionate consequences where they are not maintained. But given the highly regulated nature of financial services, and our shared desire to manage financial stability risks, we would need a collaborative, objective framework that is reciprocal, mutually agreed, and permanent and therefore reliable for businesses.

There are many other areas where the UK and EU economies are closely linked – including energy, transport, digital, law, science and innovation, and education and culture.

On energy, we will want to secure broad energy co-operation with the EU. This includes protecting the single electricity market across Ireland and Northern Ireland – and exploring options for the UK’s continued participation in the EU’s internal energy market. We also believe it is of benefit to both sides for the UK to have a close association with Euratom.

On transport, we will want to ensure the continuity of air, maritime and rail services; and we will want to protect the rights of road hauliers to access the EU market and vice versa.

On digital, the UK will not be part of the EU’s Digital Single Market, which will continue to develop after our withdrawal from the EU. This is a fast evolving, innovative sector, in which the UK is a world leader. So it will be particularly important to have domestic flexibility, to ensure the regulatory environment can always respond nimbly and ambitiously to new developments.

We will want our agreement to cover civil judicial cooperation, where the EU has already shown that it can reach agreement with non-member states, such as through the Lugano Convention, although we would want a broader agreement that reflects our unique starting point. And our agreement will also need to cover company law and intellectual property, to provide further legal certainty and coherence.

The UK is also committed to establishing a far-reaching science and innovation pact with the EU, facilitating the exchange of ideas and researchers. This would enable the UK to participate in key programmes alongside our EU partners. And we want to take a similar approach to educational and cultural programmes, to promote our shared values and enhance our intellectual strength in the world – again making an ongoing contribution to cover our fair share of the costs involved.

In all these areas, bold and creative thinking can deliver new agreements that are in the very best interests of all our people – both in the UK and across the EU. And in the face of a worrying rise in protectionism, I believe such agreements can enable us to set an example to the world.

POST BREXIT BRITAIN

For the world is watching.We should not think of our leaving the EU as marking an ending, as much as a new beginning for the United Kingdom and our relationship with our European allies. Change is not to be feared, so long as we face it with a clear-sighted determination to act for the common good.

Nor is Brexit an end in itself. Rather, it must be the means by which we reaffirm Britain’s place in the world and renew the ties that bind us here at home. And I know that the United Kingdom I treasure can emerge from this process a stronger, more cohesive nation. A United Kingdom which is a cradle for innovation; a leader in the industries of the future; a champion of free trade, based on high standards; a modern, outward-looking, tolerant country, proud of our values and confident of our place in the world. This is an optimistic and confident future which can unite us all. A Global Britain which thrives in the world by forging a bold and comprehensive economic partnership with our neighbours in the EU; and reaches out beyond our continent, to trade with nations across the globe.

The approach I have set out today would: implement the referendum result, provide an enduring solution, protect our security and prosperity, helps us build the kind of country we want to be, and bring our country together by commanding the confidence of those who voted Leave and those who voted Remain. It is an approach to deliver for the whole of our United Kingdom and our wider family of overseas territories.

I am in no doubt that whatever agreement we reach with the EU, our future is bright. The stability and continuity of centuries of self-government, our commitment to freedom under the rule of law, our belief in enterprise and innovation, but above all, the talent and genius of all our people – and especially our young people – are the seeds of our success in the future, as they have been the guarantors of our success in the past.

I look forward to discussing our future partnership with our European friends. Because although we are leaving the EU – and in that regard we will become separate – we are all still European and will stay linked by the many ties and values we have in common. And because it is only by working together that we will find solutions that work for all our peoples.

Yes, there will be ups and downs in the months ahead.  As in any negotiation, no-one will get everything they want. We will not be buffeted by the demands to talk tough or threaten a walk out. Just as we will not accept the counsels of despair that this simply cannot be done. We will move forward by calm, patient discussion of each other’s positions.  It is my responsibility as Prime Minister to provide that leadership for our country at this crucial time. By following the course I have set out today, I am confident we will get there and deliver the right outcome for Britain and the EU.

A generation from now what will be remembered is not the rough and tumble of negotiation but whether we reached an enduring solution cast in the interests of the people we are all here to serve. So my message to our friends in Europe is clear.

We know what we want. We understand your principles. We have a shared interest in getting this right. So let’s get on with it.

Mr Deputy Speaker.

I report today on an economy that continues to grow, continues to create more jobs than ever before and continues to confound those who seek to talk it down.

An economy set on a path to a new relationship with our European neighbours and a new future outside the European Union.

A future that will be full of change; full of new challenges and above all full of new opportunities.

And in this Budget, we express our resolve to look forwards not backwards.

To embrace that change, to meet those challenges head on and to seize those opportunities for Britain.

The negotiations on our future relationship with the EU are in a critical phase.

My Right Honourable Friend the Prime Minister has been clear that we seek a deep and special partnership, based on free and frictionless trade in goods and services, close collaboration on security and strong mutual respect and friendship.

And as Chancellor, I am clear that one of the biggest boosts we can provide to businesses and families, one of the best ways to protect British jobs and prosperity as we build that new future, is to make early progress in delivering my Right Honourable Friend’s vision.

With an implementation agreement that allows businesses to plan and invest with confidence.

And this government will make the pursuit of that progress a top priority in the weeks ahead.

But Mr Deputy Speaker,

While we work to achieve this deep and special partnership we are determined to ensure that the country is prepared for every possible outcome.

We have already invested almost £700 million in Brexit preparations.

And today I am setting aside over the next two years another £3 billion.

And I stand ready to allocate further sums if and when needed.

No one should doubt our resolve!

But this Budget is about much more than Brexit.

The world is on the brink of a technological revolution.

One that will change the way we work and live and transform our living standards for generations to come.

And we face a choice:

Either we embrace the future.

Seize the opportunities which lie within our grasp.

And build on Britain’s great global success story.

Or [political content removed] reject change and turn inwards to the failed and irrelevant dogmas of the past.

Mr Deputy Speaker.

We have no doubts we choose the future.

We choose to run towards change, not away from it.

To prepare our people to meet the challenges ahead, not to hide from them.

And the prize will be enormous.

Because, for the first time in decades Britain is genuinely at the forefront of this technological revolution.

Not just in our Universities and research institutes.

But this time in the commercial development labs of our great companies.

And on factory floors and business parks across this land.

But we must invest to secure that bright future for Britain.

And at this Budget, that is what we choose to do.

But, Mr Deputy Speaker, we are listening.

And we understand the frustration of families where real incomes are under pressure.

So, at this Budget, we choose a balanced approach

Yes, maintaining fiscal responsibility, as we at last see our debt peaking.

Continuing to invest in the skills and infrastructure that will support the jobs of the future.

Building the homes that will make good on our promise to the next generation.

But crucially also helping families to cope with the cost of living.

Mr Deputy Speaker.

As we invest in our country’s future I have a clear vision of what that Global Britain looks like:

A prosperous and inclusive economy where everybody has the opportunity to shine.

Wherever in these islands they live.

And whatever their background.

Where talent and hard work are rewarded.

Where the dream of home ownership is a reality for all generations.

A hub of enterprise and innovation.

A beacon of creativity.

A civilised and tolerant place that cares for the vulnerable and nurtures the talented.

An outward looking, free-trading nation.

A force for good in the world.

That is the Britain I want to leave to my children Mr Deputy Speaker.

A Britain we can be proud of.

A country fit for their future.

I know we will not build it overnight.

But in this Budget we will lay the foundations.

Economy and fiscal

My predecessor used something a little more exotic.

I will stick to plain water.

[Political content removed]

Mr Deputy Speaker.

I shall first report to the House on the economic forecasts of the independent OBR.

This is the bit with the “long, economicky words”.

Once again, I thank Robert Chote and his team for their hard work over the last few weeks.

Mr Deputy Speaker,

I believe passionately that the best way to improve the lives of people across the length and breadth of this country is to help them get into work.

And Mr Deputy Speaker, I am acutely aware that 1.4 million people out of work is 1.4 million too many.

So today, I welcome the OBR forecast that there will be another 600,000 people in work by 2022.

And I am immensely proud of this government’s record in having created over 3 million new jobs since 2010.

[Political content removed]

But let nobody be in any doubt that this government will continue its relentless focus on getting more people into work.

Giving them the security and peace of mind of a regular wage.

But I also want work to be good quality, and well-paid.

And regrettably our productivity performance continues to disappoint.

The OBR has assumed at each of the last 16 fiscal events that productivity growth would return to its pre-crisis trend of about 2% a year, but it has remained stubbornly flat.

So today they revise down the outlook for productivity growth, business investment, and GDP growth across the forecast period.

The OBR now expects to see GDP grow 1.5% in 2017, 1.4% in 2018, 1.3 in both 2019 and 2020, before picking back up to 1.5, and finally 1.6% in 2022.

With inflation peaking at 3% in this quarter, before falling back towards target over the next year.

And today I reaffirm the remit for the independent Monetary Policy Committee, and its 2% CPI inflation target.

Mr Deputy Speaker.

We took over an economy with the highest budget deficit in our peacetime history.

Since then, thanks to the hard work of the British people, that deficit has been shrinking, and next year will be below 2%.

But our debt is still too high, and we need to get it down.

Not for some ideological reason.

But because excessive debt undermines our economic security, leaving us vulnerable to shocks.

Because it passes the burden unfairly to the next generation.

And because it cannot be right to spend more on our debt interest than we do on our police and our Armed Forces combined.

So I am pleased to tell the House that OBR expects debt to peak this year, and then gradually to fall as a share of GDP.

[Political content removed]

Mr Deputy Speaker.

I reaffirm our pledge of fiscal responsibility and our commitment to the fiscal rules I set out last Autumn.

But now I choose to use some of the headroom I established then.

So that as well as reducing debt, we can also invest in Britain’s future.

Support our key public services.

Keep taxes low.

And provide a little help to families and businesses under pressure.

A balanced approach that will prepare Britain for the future, not seek to hide from it.

Today, the OBR confirm that we are on track to meet our fiscal rules:

Borrowing is forecast to be £49.9 billion this year; £8.4 billion lower than forecast at the Spring Budget.

And after taking account of all decisions since the Spring Budget, the OBR’s GDP revision, and the measures I will announce today, borrowing will fall in every year of the forecast.

From £39.5 billion next year to £25.6 billion in 2022-23.

To reach its lowest level in 20 years.

As a percentage of our GDP it falls from 2.4% this year, to 1.9% next year; then 1.6%; 1.5%; 1.3%; and finally, 1.1% in 2022-23.

The OBR forecast the structural deficit to be 1.3% of GDP in 2020-21, giving £14.8 billion headroom against our 2% target.

Debt will peak at 86.5% of GDP this year; it will then fall to 86.4% next year; then 86.1; 83.1; 79.3, and finally 79.1% in 2022-23.

The first sustained decline in debt in 17 years.

[Political content removed]

Mr Deputy Speaker.

At the heart of a Global Britain must be a dynamic and innovative economy.

On Monday, the Prime Minister set out the key elements of our Modern Industrial Strategy.

A strategy to raise productivity and wages in all parts of our country.

And to guarantee the brighter future we have promised to the next generation.

My Right Honourable Friend the Business Secretary will present a White Paper to the House in the next few days.

But this is not just an economic plan.

It is a key part of our vision for a fairer Britain.

A Britain where every one of our citizens can contribute to, and share in, the benefits of prosperity.

The key to raising the wages of British workers is raising investment – public and private.

And Mr Deputy Speaker, we are investing in Britain’s future:

Half a trillion pounds since 2010.

The biggest rail programme since Victorian times.

The largest road building programme since the 70s.

The biggest increase in science and innovation funding in four decades.

And the two largest infrastructure projects in Europe – Crossrail and HS2.

When I took this job I committed to make the battle to raise Britain’s productivity.

And thus the nation’s pay.

The central mission of the Treasury.

Last Autumn I launched the National Productivity Investment Fund, to provide an additional £23 billion of investment over five years.

To upgrade Britain’s economic infrastructure for the 21st Century.

Today I can announce that I will extend this fund for a further year and expand it to over £31 billion.

Meaning that, public investment under this government will, on average, be £25 billion higher per year, in real terms than under the last Labour government.

We are allocating a further £2.3 billion for investment in R&D

And we’ll increase the main R&D Tax credit to 12%.

Taking the first strides towards the ambition of our Industrial Strategy to drive up R&D investment across the economy to 2.4% of GDP.

Mr Deputy Speaker,

Britain is the world’s sixth largest economy.

London is the number one international financial services centre.

We have some of the world’s best companies.

And a commanding position in a raft of tech and digital industries that will form the backbone of the global economy of the future.

Those who underestimate Britain, do so at their peril.

Because we will harness this potential and turn it into the high paid, high productivity jobs of tomorrow.

Others may choose to reject the future.

We choose to embrace it.

A new tech business is founded in Britain every hour.

And I want that to be every half hour.

So today we invest over £500m in a range of initiatives from Artificial Intelligence, to 5G and full fibre broadband.

We support regulatory innovation with a new Regulators’ Pioneer Fund.

And a new Geospatial Data Commission to develop a strategy for using the government’s location data to support economic growth.

And to help our tech start-ups reach scale we asked Sir Damon Buffini to review the availability of patient capital, and I am grateful to him.

Today we’re publishing our ‘Action Plan’, to unlock over £20 billion of new investment in UK scale-up businesses.

Including through a new fund in the British Business Bank, seeded with £2.5 billion of public money.

By facilitating pension fund access to long term investments.

And by doubling EIS investment limits for knowledge intensive companies, while ensuring that EIS is not used as a shelter for low-risk capital preservation schemes.

And we stand ready to step in to replace European Investment Fund lending if needed.

There is perhaps no technology as symbolic of the revolution gathering pace around us as driverless vehicles.

I know Jeremy Clarkson doesn’t like them.

But there are many other good reasons to pursue this technology.

So today we step up our support for it.

Our future vehicles will be driverless, but they’ll be electric first.

And that’s a change that needs to come as soon as possible.

So we’ll establish a new £400m charging infrastructure fund, invest an extra £100 million in Plug-In-Car Grant, and £40 million in charging R&D.

And I can confirm today that we will clarify the law so that people who charge their electric vehicles at work will not face a benefit-in-kind charge from next year.

The tax system can play an important role in protecting our environment.

We owe it to our children that the air they breathe is clean.

We published our Air Quality plan earlier this year

And we said then that we would fund it through taxes on new diesel cars

From April 2018 the first year VED rate for diesel cars that don’t meet the latest standards will go up by one band.

And the existing diesel supplement in Company Car Tax will increase by 1%.

Drivers buying a new car will be able to avoid this charge as soon as manufacturers bring forward the next-generation cleaner diesels that we all want to see.

And we only apply the measures to cars.

So before the headline writers start limbering up let me be quite clear:

No white van man (or woman) will be hit by these measures.

This levy will fund a new £220 million Clean Air Fund to provide support the implementation of local air quality plans.

But air quality is, sadly, not our only environmental challenge.

Audiences across the country, glued to Blue Planet II, have been starkly reminded of the problems of plastics pollution.

The UK led the world on climate change agreements.

And is a pioneer in protecting marine environments.

Now I want us to become a world leader in tackling the scourge of plastic, littering our planet and our oceans.

With My Right Honourable Friend the Environment Secretary I will investigate how the tax system and charges on single-use plastic items can reduce waste.

Because we can’t keep our promise to the next generation to build an economy fit for the future.

Unless we ensure our planet has a future.

Mr Deputy Speaker,

Meeting the challenge of change head on means giving our people the confidence to embrace it, and the skills to reap the rewards from it.

And we have a plan to do so.

We’re delivering 3 million apprenticeship starts by 2020 thanks to our apprenticeship levy.

And I’ll keep under review the flexibility that levy payers have to spend this money.

We’re introducing T-levels.

And today I provide a further £20m to support FE colleges to prepare for them.

Knowledge of maths is key to the high-tech, cutting edge jobs in our digital economy.

But it is also useful in less glamorous roles.

Such as frontline politics.

So we’ll expand the Teaching for Mastery of Maths programme, to a further 3000 schools.

We’ll provide £40 million to train maths teachers across the country.

We’ll introduce a £600 Maths Premium for schools, for every additional pupil who takes A level or Core maths.

And we’ll invite proposals for new maths schools across England.

So highly talented young mathematicians can release their potential wherever they live and whatever their background.

More maths for everyone.

Don’t let anyone say I don’t know how to show the nation a good time.

Computer science is also at the heart of this revolution.

So we’ll ensure that every secondary school pupil can study computing, by tripling the number of trained computer science teachers to 12,000.

And we’ll work with industry to create a new National Centre for Computing.

But Mr Deputy Speaker, rapid technological change means we also need to help people to retrain during their working lives.

Ensuring that our workforce is equipped with the skills they will need for the workplace of the future.

Today, my Right Honourable Friend the Education Secretary and I are launching an historic partnership, between government, the CBI and the TUC – to set the strategic direction for a National Retraining Scheme.

Its first priority will be to boost digital skills and to support expansion of the construction sector.

And to make a start immediately, we will invest £30 million in the development of digital skills distance learning courses, so people can learn wherever they are, and whenever they want.

And I am pleased to be able to accept the representation I have received from the TUC to continue to fund UnionLearn, which I recognise as a valuable part of our support to workplace learning.

Mr Deputy Speaker.

Backing skills is key to unlocking growth nationally.

But far too much of our economic strength is concentrated in our capital city.

If we are truly to build an economy that is fit for the future

Then we have to get all parts of the UK firing on all cylinders.

That is what our modern industrial strategy is all about.

Today we back the Northern Powerhouse, the Midlands Engine and elected mayors across the UK.

With a new £1.7 billion Transforming Cities Fund.

Half to be shared by the six areas with elected metro mayors to give them the firepower to deliver on local transport priorities.

The remainder will be open to competition by other cities in England.

We’re investing £300 million to ensure HS2 infrastructure can accommodate future Northern Powerhouse and Midlands Engine rail improvements.

I am also providing £30 million to trial new solutions to improve mobile and digital connectivity on trains, on the TransPennine route.

We’re developing a local industrial strategy with Manchester.

And I’m pleased to announce a second devolution deal with Andy Street in the West Midlands.

We’ve agreed a new devolution deal with North of the Tyne.

And we’ll fund the replacement of the 40-year-old rolling stock on the Tyne and Wear Metro at a total investment of £337million.

We’ll invest £123 million in the Redcar Steelworks site to support the ambitious plans of our new Tees Valley Mayor, Ben Houchen, and my Honourable Friend for Middlesbrough South and East Cleveland who are leading the fight for prosperity in their area.

And we’re piloting 100% business rates retention in London next year.

And continuing to work with TfL on the funding and financing of Crossrail 2.

We will also make over £1 billion of discounted lending available to local authorities across the country to support high-value infrastructure projects.

A Conservative government giving power back to the people of Britain.

And driving prosperity and greater fairness across our United Kingdom.

Mr Deputy Speaker.

The decisions taken in this Budget also mean £2 billion more for the Scottish Government, £1.2 billion more for the Welsh Government, and over £650 million more for a Northern Ireland Executive.

I can confirm that progress is being made on city deals for Tay Cities and Stirling, and on a growth deal for the Borderlands.

Mr Deputy Speaker.

I am getting used to the new experience of having my ear bent by my thirteen Scottish Conservative colleagues, most recently on the issue of Scottish Police and Fire VAT.

[Political content removed]

So we will legislate to allow VAT refunds from April 2018.

And in response to yet more representations from my HFs, aided and abetted by my HF for Waveney, from November 2018 we will introduce ‘Transferable Tax History’ for transfers of oil and gas fields in the North Sea.

An innovative tax policy that will encourage new entrants to bring fresh investment to a basin that still holds up to 20 billion barrels of oil.

We will begin negotiations towards growth deals for North Wales and Mid-Wales.

And we’ll abolish tolls on the Severn Bridge, as promised, by the end of next year.

We’ll deliver on our commitment to review the effect of VAT and APD on tourism in Northern Ireland, reporting at next year’s Budget.

And we will open negotiations for a Belfast City Deal as part of our commitment to a comprehensive and ambitious set of city deals across Northern Ireland.

A Conservative government delivering for all parts of our United Kingdom.

Mr Deputy Speaker.

It is only by supporting our regions and nations – dealing with our debts and investing in skills and infrastructure for the long term – that we can build an economy fit for the future.

But I recognise that many people are feeling pressure on their budgets now.

And because we are all in politics to make peoples’ lives better.

In the short term as well as the long.

We will take further measures in this budget to help families and businesses where we can.

Mr Deputy Speaker.

The switch to Universal Credit is a long overdue and necessary reform.

Replacing [political content removed] broken system that discouraged people from working more than 16 hours a week.

And trapped 1.4 million on out-of-work benefits for nearly a decade.

Universal Credit delivers a modern welfare system, where work always pays and people are supported to earn.

But I recognise the genuine concerns on both sides of the House about the operational delivery of this benefit.

Today we will act on those concerns.

First, we will remove the seven day waiting period applied at the beginning of a benefit claim so that entitlement to Universal Credit will start on the day of the claim.

We have looked at reducing the delay at the end of the first month assessment period.

But to do so would mean compromising the principle of payments being made on the same day of the month.

A key feature of the system which is very important for claimants in managing their budgets.

So to provide greater support during the waiting period we will change the advances system to ensure that any household that needs it can access a full month’s payment within five days of applying.

We will make it possible to apply for an advance online.

And we will extend the repayment period for advances from 6 months to 12 months.

Any new Universal Credit claimant in receipt of Housing Benefit, will continue to receive it for two weeks.

This is a £1.5 billion package to address concerns about the delivery of the benefit.

My Right Honourable Friend the Secretary of State for Work and Pensions will give further details in a statement to the House tomorrow.

Mr Deputy Speaker.

We also want to help low-income households in areas where rents have been rising fastest.

In the long run, the answer lies in increasing the amount of housing available – a theme I shall return to.

But in the meantime, the best way to help them is by increasing the rate of support in those areas where rents are least affordable.

So we will increase Targeted Affordability funding by £125 million over the next two years, benefitting 140,000 people.

We will always listen to genuine concerns, and act where we can to help.

Mr Deputy Speaker.

Making work pay is core to the philosophy of this government.

That is why we introduced the National Living Wage in 2016.

From April, it will rise 4.4%, from £7.50 an hour to £7.83.

Handing full-time workers a further £600 pay increase.

And taking their total pay rise, since its introduction, to over £2000 a year.

We also accept the Low Pay Commission’s recommendations on National Minimum Wage rates.

Supporting our young people with the largest increase in youth rates in ten years.

And delivering a pay rise for over 2 million minimum wage workers of all ages across the country.

Mr Deputy Speaker.

Today, income inequality is at its lowest level in 30 years.

The top 1% are paying a larger share of income tax than at any time under the last Labour government.

The poorest 10% have seen their real incomes grow faster since 2010 than the richest 10%.

And the proportion of full-time jobs that are low paid is at its lowest for 20 years.

A Conservative government delivering a fairer Britain.

But as well as making work pay, we want families to keep more of the money they earn.

When we came into office the personal allowance stood at £6,475.

From April, I will increase the personal allowance to £11,850.

And the higher rate threshold to £46,350.

Making progress towards our manifesto commitments.

The typical basic rate tax payer will be £1,075 a year better off compared to 2010.

And a full-time worker on the National Living Wage will take home more than £3,800 extra.

This Conservative government delivering for Britain’s workers.

Mr Deputy Speaker.

I turn now to duties.

The tobacco duty escalator will continue at inflation plus 2%.

With an additional 1% duty on hand rolling tobacco this year.

And minimum excise duty on cigarettes will also rise.

Excessive alcohol consumption by the most vulnerable people is all too often through cheap, high strength, low quality products – especially so-called white ciders.

I want to pay tribute to the campaign led by my Honourable Friend for Congleton on this issue.

And so following our recent consultation we will legislate to increase duty on these products from 2019.

But recognising the pressure on household budgets.

And backing our Great British pubs.

Duties on other ciders, wines, spirits and on beer will be frozen.

This will mean a bottle of whisky will be £1.15 less in 2018 [political content removed]

And a pint of beer 12p less.

So, Merry Christmas, Mr Deputy Speaker.

The cost of travel is also an important factor for families and businesses.

From April 2019, I will again freeze short-haul Air Passenger Duty rates and I will also freeze long-haul economy rates.

Paid for by an increase on Premium class tickets, and on private jets.

Sorry Lewis.

For those who don’t stretch to a private jet, I can announce a new railcard, for those aged 26-30.

Giving 4.5 million more young people a third off their rail fares.

And I will, once again, cancel the fuel duty rise for both petrol and diesel that is scheduled for April.

Since 2010, we will have saved the average car driver £850, and the average van driver over £2,100, compared to Labour’s escalator plans.

Fuel duty has now been frozen for the longest period in 40 years, at a total cost to the Exchequer of £46 billion since 2010.

Mr Deputy Speaker.

Our NHS is one of our great institutions.

An essential part of what we are as a nation.

And a source of pride the length and breadth of the country.

Its values are the values of the British people, and we will always back it.

Dedicated NHS staff are handling the challenges of an ageing population and rapidly advancing technology with skill and commitment.

And, Mr Deputy Speaker, [political content removed]

The number of patients being treated is at record levels.

Cancer survival rates are at their highest ever level.

17 million people are now able to access GP appointments in the evenings and at weekends.

And public satisfaction amongst hospital inpatients is at its highest level in more than two decades.

It is central to this government’s vision that everyone has access to our NHS, free at the point of need.

That is why we endorsed and funded the NHS’s Five Year Forward View in 2014.

And met its funding ask – providing an extra £10 billion in real terms per year by 2020.

But even with this additional funding, we acknowledge that the service remains under pressure and today we respond.

First, we will deliver an additional £10 billion package of capital investment over the course of this Parliament.

To support the Sustainability and Transformation plans which will make our NHS more resilient.

Investing for an NHS which is fit for the future.

But we also recognise that the NHS is under pressure right now.

I am therefore exceptionally, and outside the Spending Review process, making an additional commitment of resource funding of £2.8 billion to the NHS in England.

£350 million immediately to allow trusts to plan for this winter

And £1.6 billion in 2018-19, with the balance in 19-20, taking the extra resource into the NHS next year to £3.75 billion in total.

Meaning that it will receive a £7.5 billion increase to its resource budget over this year and next year.

Mr Deputy Speaker.

Our nation’s nurses provide invaluable support to us all in our time of greatest need and deserve our deepest gratitude for their tireless efforts.

My Rt Hon Friend the Health Secretary has already begun discussions with health unions on pay structure modernisation for Agenda for Change staff to improve recruitment and retention.

He will submit evidence to the independent Pay Review Body in due course.

But I want to assure NHS staff and patients, that if the Health Secretary’s talks bear fruit, I will protect patient services by providing additional funding for such a settlement.

Mr Deputy Speaker.

Just as our public services must be fit for the future, so, too, must our tax system.

It must remain competitive to attract the brightest and the best to establish, and grow the businesses of the future.

It must raise the revenue we need to fund our public services.

And it must be robust against abuse so that it is fair to all.

[Political content removed]

It is this government that has clamped down on Avoidance and Evasion.

This government that has seen the tax gap cut by a quarter to a record low.

And this government that has raked in an extra £160 billion over seven years for our public services by collecting the taxes that are due.

So I will take no lectures, but I will take action.

This Budget continues the work of the last seven years.

With a package of measures that is forecast to raise £4.8 billion by 2022-23.

[Political content removed]

Mr Deputy Speaker.

Our long-term phased reduction of Corporation Tax has generated investment and jobs, and raised £20 billion extra for our public services.

We are committed to maintaining Britain’s competitive Corporation Tax rates.

But there is a case now for removing the anomaly of the indexation allowance for capital gains – bringing the corporate system into line with personal capital gains tax.

I will therefore freeze this allowance so that companies receive relief for inflation up to January 2018, but not thereafter.

I am grateful to the Office for Tax Simplification for their recent report on the VAT registration threshold.

At £85,000 The UK’s VAT threshold is by far the highest in the OECD.

By contrast, in Germany it is just £15,600.

I note the OTS conclusion that it distorts competition and disincentivises business growth.

I also note the Federation of Small Businesses’ concerns about the cliff edge of the threshold.

But such a high threshold also has the benefit of keeping the majority of small businesses out of VAT altogether.

So I am not minded to reduce the threshold.

But I will consult on whether its design could better incentivise growth.

And in the meantime we will maintain it at its current level of £85,000 for the next two years.

Mr Deputy Speaker.

We can’t build an economy fit for the future without supporting its backbone:

Our 5.5 million small businesses who are responsible for nearly half of our private sector jobs.

They give it extraordinary vibrancy and resilience.

But I recognise that many are feeling under pressure right now.

And I know what hard work it is to get a business off the ground; to get it to grow.

So today I want to do what we can to ease that pressure.

Mr Deputy Speaker, business rates represent a high fixed cost for small businesses.

At Budget 2016 we introduced a package of Business Rate relief worth almost £9 billion, with a further £435 million in the Spring Budget.

Today I go further.

We have listened to concerns about the potential costs of the annual uprating of business rates in April.

And today I will accept the representation of the British Chambers of Commerce, CBI and other business organisations and bring forward the planned switch from RPI to CPI by two years, to April 2018.

A move worth £2.3 billion to businesses over the next five years.

I’ve also listened to businesses affected by the so-called ‘staircase tax’.

We will change the law to ensure that where a business has been impacted by the Supreme Court ruling it can have its original bill reinstated if it chooses, and backdated.

And I hope I can expect cross-party backing to speed that measure through?

Mr Deputy Speaker, three simple steps to solve the staircase tax.

To support the thousands of small pubs that are at the heart of so many of our communities.

We’ll extend the £1,000 discount for pubs with a rateable value of less than £100,000 for one more year to March 2019.

And I have heard the concerns about the 5 yearly revaluation system.

Shorter revaluation periods will reduce the size of changes in valuations.

So I can announce today that after the next revaluation, future revaluations will take place every three years.

This Conservative government listening to our small businesses.

Mr Deputy Speaker.

There is a wider concern across this House and in the business community about the tax system in the digital age.

Along with the innovation and growth that it brings, digitalisation poses challenges for the sustainability and fairness of our tax system.

But this challenge can only be properly solved on an international basis.

And the UK is leading the charge in the OECD and the G20 to find solutions.

Today we publish a position paper on the tax challenge posed by the digital economy, setting out our emerging thinking about potential solutions.

But in the meantime, we will take what action we can:

Multinational digital businesses pay billions of pounds in royalties to jurisdictions where they are not taxed.

And some of these royalties relate to UK sales.

So from April 2019, and in accordance with our international obligations, we will apply income tax to royalties relating to UK sales, when those royalties are paid to a low tax jurisdiction.

Even if they do not fall to be taxed in the UK under our current rules.

Raising about £200 million a year.

This does not solve the problem, but it does send a signal of our determination.

And we will continue work in the international arena to find a sustainable and fair long-term solution that properly taxes the digital businesses that operate in our cyberspace.

And following representations from a number of my Honourable Friends, we are also taking further action to address online VAT fraud which costs the taxpayer £1.2 billion per year.

By making all online marketplaces jointly liable for VAT.

Ensuring that sellers operating through them pay the right amount of VAT.

Just as we would expect traditional retailers to do.

Mr Deputy Speaker.

I want to turn to the challenge of the Housing Market.

But before I do, I want to touch on the aftermath of the appalling events at Grenfell Tower.

We have provided financial support for the victims of this terrible tragedy.

And today I can announce we will provide Kensington and Chelsea Council with a further £28m for mental health services, regeneration support for the surrounding areas and to provide a new community space for Grenfell United community group.

This tragedy should never have happened, and we must ensure that nothing like it ever happens again.

All Local Authorities and Housing Associations must carry out any identified necessary safety works as soon as possible.

If any local authority cannot access funding to pay for essential fire safety work, they should contact us immediately.

As I have said before, we will not let financial constraints get in the way of essential safety work.

Mr Deputy Speaker.

I want to address the issue of empty properties:

It can’t be right to leave property empty when so many are desperate for a place to live.

So we will give Local Authorities the power to charge a 100% council tax premium on empty properties.

We will also launch a consultation on barriers to longer tenancies in the private rented sector, and how we might encourage landlords to offer them to those tenants who want the extra security.

And I want to say something about rough sleeping.

It is unacceptable that in 21st Century Britain there are people sleeping on the streets.

So we’ll invest £28 million in three new “Housing First” Pilots in the West Midlands, Manchester and Liverpool.

And establish a homelessness taskforce.

As part of our commitment to halving rough sleeping by 2022, and eliminating it by 2027.

Mr Deputy Speaker.

I’d like to thank the many colleagues who submitted ideas on how to tackle the challenge of the Housing Market.

Including Honourable Friends for North East Hampshire, Eastleigh, and Weston-Super-Mare.

By continuing to invest in Britain’s infrastructure, skills and R&D we will ensure the recovery in productivity growth that is the key to delivering our vision of a stronger, fairer, more balanced economy.

And the assurance to the next generation of their economic security.

But however successful we are in that endeavour, there is one area where young people today will, rightly, feel concern about their future prospects – and that is in the housing market.

House prices are increasingly out of reach for many.

It takes too long to save for a deposit.

And rents absorb too high a portion of monthly income.

So the number of 25-34 year olds owning their own home has dropped from 59% to just 38% over the last thirteen years.

Put simply, successive governments over decades, have failed to build enough homes to deliver the home-owning dream that this country has always been proud of.

Or, indeed, to meet the needs of those who rent.

In Manchester a few weeks ago, my Right Honourable Friend the Prime Minister made a pledge to Britain’s younger generation that she would “…dedicate [her] premiership to fixing this problem”.

Today we take the next steps to delivering on that pledge.

By choosing to build.

We send a message to the next generation that getting on the housing ladder is not just a dream of your parents’ past.

But a reality for your future.

We’ve made a start with schemes like Help to Buy, which has helped over 320,000 people buy a home.

We’ve increased the supply of homes by more than 1.1 million since 2010.

Including nearly 350,000 affordable homes.

Housebuilding stands at its highest level since the crash, with the latest figures showing that over 217,000 net additional homes were added to the stock last year.

That is a remarkable achievement.

But we need to do better still if we are to see affordability improve.

This is a complex challenge.

There is no single magic bullet.

If we don’t increase supply of land for new homes, more money will inflate prices, and make matters worse.

If we don’t do more to support the growth of the SME housebuilding sector.

[Political content removed]

We will remain dependent on the major national housebuilders that dominate the industry.

And if we don’t train the construction workers of tomorrow.

We may generate planning permissions, but we will not turn them into homes.

Solving this challenge will require money, planning reform and intervention.

So today we set out an ambitious plan to tackle the housing challenge.

Over the next five years we will commit a total of at least £44 billion of capital funding, loans and guarantees to support our housing market.

To boost the supply of skills, resources, and building land.

And to create the financial incentives necessary to deliver 300,000 net additional homes a year on average by the mid-2020s.

The biggest annual increase in housing supply since 1970.

New money for the Home Builders Fund to get SME housebuilders building again.

A £630 million small sites fund to unstick the delivery of 40,000 homes.

A further £2.7 billion to more than double the Housing Infrastructure Fund.

£400 million for estate regeneration.

A £1.1 billion fund to unlock strategic sites, including new settlements and urban regeneration schemes.

A lifting of HRA caps for councils in high demand areas to get them building again.

And £8 billion of new financial guarantees to support private housebuilding and the purpose-built private rented sector.

And because we need a workforce to build these new homes.

We are providing an additional £34m to develop construction skills across the country.

Mr Deputy Speaker.

Solving the housing challenge takes more than money.

It takes planning reform.

We will focus on the urban areas where people want to live and where most jobs are created.

Making best use of our urban land, and continuing the strong protection of our green belt.

In particular, building high quality, high density homes in city centres and around transport hubs.

And to put the needs of our young people first, we will ensure that councils in high demand areas permit more homes for local first time buyers and affordable renters.

My Right Honourable Friend the Communities Secretary will set out more detail in due course.

However, one thing is very clear: there is a significant gap between the number of planning permissions granted and the number of homes built.

In London alone, there are 270,000 residential planning permissions unbuilt.

We need to understand why.

So I am establishing an urgent Review to look at the gap between planning permissions and housing starts.

It will be chaired by my Right Honourable Friend for West Dorset.

And will deliver an interim report in time for the Spring Statement next year.

And if it finds that vitally needed land is being withheld from the market for commercial, rather than technical, reasons.

We will intervene to change the incentives to ensure such land is brought forward for development.

Using direct intervention compulsory purchase powers as necessary.

Mr Deputy Speaker, my Right Honourable Friend the Prime Minister has said we will fix this problem.

And no one should doubt this government’s determination to do so.

But the solution will not deliver itself.

Local Authorities will need help and support.

Developers will need encouragement and persuasion.

Infrastructure to facilitate higher density development must be funded and delivered.

So the Homes and Communities Agency will expand to become “Homes England”.

Bringing together money, expertise, and planning & compulsory purchase powers.

With a clear remit to facilitate delivery of sufficient new homes, where they are most needed, to deliver a sustained improvement in affordability.

But Mr Deputy Speaker, the battle to achieve and sustain affordability will be a long-term one.

So we also need to look beyond this Parliament, to long-term measures.

We will use New Town Development Corporations to kick-start 5 new locally agreed Garden Towns in areas of demand pressure.

Delivered through public-private partnerships designed to attract long term capital investment from around the world.

Last week the National Infrastructure Commission published their report on the Cambridge-Milton Keynes-Oxford corridor.

Today we back their vision and commit to building up to 1 million homes by 2050.

Completing the road and rail infrastructure to support them.

And as a down-payment on this plan, we have agreed an ambitious Housing Deal with Oxfordshire to deliver 100,000 homes by 2031.

Capitalising on the global reputations of our two most famous universities.

And Britain’s biggest new town,

To create a dynamic new growth corridor for the 21st Century.

Mr Deputy Speaker,

This is our plan to deliver on the pledge we have made to the next generation.

That the dream of home ownership will become a reality in this country once again.

But I also want to take action today to help young people who are saving to own a home.

One of the biggest challenges facing young first-time buyers is the cash required up front.

We have put £10 billion more money into Help to Buy equity loan to help those saving for a deposit.

But I want to do more still.

I’ve received representations for a temporary Stamp Duty holiday to first time buyers.

But that would only help those ready to purchase now.

And would offer nothing for the many who will need to save for years.

So, with effect from today, for all first-time buyer purchases up to £300,000, I am abolishing stamp duty altogether.

To ensure that this relief also helps first time buyers in very high price areas like London, it will also be available on the first £300,000 of the purchase price of properties up to £500,000.

Meaning an effective reduction of £5,000.

A stamp duty cut for 95% of all first-time buyers who pay stamp duty.

And no stamp duty at all for 80% of first time buyers from today.

Mr Deputy Speaker.

When we say we will revive the home-owning dream in Britain.

We mean it.

We do not underestimate the scale of the challenge

But today, we have made a substantial downpayment.

Mr Deputy Speaker.

One of the things I love most about this county is its sense of opportunity.

I have always felt it.

And I want young people today to grow up with that same sense of boundless opportunity.

In this Budget I have set out a vision for Britain’s future, and our plan for delivering it.

By getting our debt down.

By supporting British families and businesses.

By investing in the technologies and the skills of the future.

By creating the homes and the infrastructure our country needs.

We are at a turning point in our history.

And we resolve to look forwards, not backwards.

To build on the strengths of the British economy.

To embrace change, not hide from it.

To seize the opportunities ahead of us.

And, together, build a Britain fit for the future.

A little over forty years ago in a small village in Oxfordshire, I signed up to be a member of the Conservative Party. I did it because it was the party that had the ideas to build a better Britain.  It understood the hard work and discipline necessary to see them through.

And it had at its heart a simple promise that spoke to me, my values and my aspirations: that each new generation in our country should be able to build a better future. That each generation should live the British Dream. And that dream is what I believe in.

But what the General Election earlier this year showed is that, forty years later, for too many people in our country that dream feels distant, our party’s ability to deliver it is in question, and the British Dream that has inspired generations of Britons feels increasingly out of reach.

Now I called that election. And I know that all of you in this hall – your friends and your families – worked day and night to secure the right result. Because of your hard work we got 2.3 million more votes and achieved our highest vote share in 34 years. That simply would not have been possible without the long days and late nights, the phone calls, the leaflet drops. The weekends and evenings spent knocking on doors. So for everything that you do, let me say – thank you.

But we did not get the victory we wanted because our national campaign fell short. It was too scripted. Too presidential. And it allowed the Labour Party to paint us as the voice of continuity, when the public wanted to hear a message of change. I hold my hands up for that. I take responsibility. I led the campaign. And I am sorry.

But the choice before us now is clear: Do we give up, spend our time looking back? Or do we do our duty, look to the future and give the country the government it needs?  This country will judge us harshly if we get this decision wrong.

Because all that should ever drive us is the duty we have to Britain and the historic mission of this party – this Conservative Party – to renew the British Dream in each new generation. That dream that says each generation should do better than the one before it. Each era should be better than the last. The dream that, for decades, has inspired people from around the world to come to Britain. To make their home in Britain. To build their lives in Britain. The dream that means the son of a bus driver from Pakistan serves in a Conservative Cabinet alongside the son of a single mother from a council estate in South-West London. And in a way, that dream is my story too.

I know that people think I’m not very emotional. I’m not the kind of person who wears their heart on their sleeve. And I don’t mind being called things like the Ice Maiden – though perhaps George Osborne took the analogy a little far.  But let me tell you something. My grandmother was a domestic servant, who worked as a lady’s maid below stairs. She worked hard and made sacrifices, because she believed in a better future for her family. And that servant – that lady’s maid – among her grandchildren boasts three professors and a prime minister. 

That is why the British Dream inspires me. Why that dream of progress between the generations spurs me on. And it is why today at this conference, this Conservative Party must pledge to renew the British Dream in this country once again. To renew that dream is my purpose in politics. My reason for being. The thing that drives me on. And it has never wavered through good times and hard times. My belief that this Conservative government can renew it has always remained strong.  

For whenever we are tested as a nation, this party steps up to the plate. Seven years ago, our challenge was to repair the damage of Labour’s great recession – and we did it. The deficit is down. Spending is under control. And our economy is growing again. But we didn’t limit ourselves to that ambition. We have achieved so much more. 

An income tax cut for over 30 million people. Four million taken out of paying it at all. Employment up to a record high. Unemployment down to a historic low. Income inequality at its lowest for thirty years. More women in work than ever before.

Over 11,000 more doctors in our NHS. Over 11,000 more nurses on our hospital wards. Free childcare for 3 and 4 year olds doubled. 1.8 million more children in good or outstanding schools. 3 million more apprenticeships. Crime down by more than a third.

More young people from disadvantaged backgrounds going to university than at any time in the history of our country. Britain leading the world in tackling climate change, eradicating global poverty, and countering terrorism wherever it rears its head. Same sex marriage on the statute book, so that two people who love each other can get married, no matter what their gender…

And a National Living Wage – giving a pay rise to the lowest earners – introduced not by the Labour Party, but by us, the Conservative Party. So let us never allow the Left to pretend they have a monopoly on compassion. This is the good a Conservative Government can do – and we should never let anyone forget it.

But it’s easy when you’ve been in government for a while to fall into the trap of defending your record, and standing for the status quo. Yes, we’re proud of the progress we have made, but the world doesn’t stand still. 

Change, as Disraeli taught us, is constant and inevitable. And we must bend it to our will. That means staking out an agenda for Britain – and uniting behind it too. And the agenda that I laid out on day one as prime minister still holds. It burns inside me just the same. 

Because at its core, it’s about sweeping away injustice – the barriers that mean for some the British Dream is increasingly out of reach. About saying what matters is not where you are from or who your parents are. The colour of your skin. Whether you’re a man or a woman, rich or poor. From the inner city or an affluent suburb. How far you go in life should depend on you and your hard work.

That is why I have always taken on vested interests when they are working against the interests of the people. Called out those who abuse their positions of power and given a voice to those who have been ignored or silenced for too long.     

And when people ask me why I put myself through it – the long hours, the pressure, the criticism and insults that inevitably go with the job – I tell them this: I do it to root out injustice and to give everyone in our country a voice. That’s why when I reflect on my time in politics, the things that make me proud are not the positions I have held, the world leaders I have met, the great global gatherings to which I have been, but knowing that I made a difference. That I helped those who couldn’t be heard.

Like the families of the 96 men, women and children who tragically lost their lives at Hillsborough. For years they saw people in authority closing ranks and acting against them, but now they are on the way to seeing justice served. 

That’s what I’m in this for. Like the victims and survivors of Child Sexual Abuse, ignored for years by people in positions of power, now on the long road to the truth. That’s what I’m in this for.

Like Alexander Paul, a young man who came to this conference three years ago to tell his story. The story of a young black boy growing up in modern Britain who without causing any trouble – without doing anything wrong – found himself being stopped and searched by people in authority time and time and time again. 

Alexander spoke so eloquently about his experience and how he came to mistrust those in positions of power as a result. So inspired by his example, we took action. We shook up the system, and the number of black people being stopped and searched has fallen by over two thirds. I am sad to have to tell you that last year, Alexander – who inspired us all with his passion – was diagnosed with brain cancer. And in June of this year he tragically passed away. He was just 21. Let us today remember the courage he showed in coming to our conference to speak out against injustice, take pride that we gave him a platform – and inspired by his example, redouble our efforts to give a voice to the voiceless at every opportunity. That’s what I’m in this for.

And that same commitment is the reason why one of my first acts as Prime Minister was to establish the ground-breaking racial disparity audit – investigating how a person’s race affects their treatment by public services, so that we can take action and respond.

We already know, for example, that members of Black and Minority Ethnic communities have a higher risk of illnesses such as high blood pressure that may lead to the need for an organ transplant.

But our ability to help people who need transplants is limited by the number of organ donors that come forward. That is why last year 500 people died because a suitable organ was not available. And there are 6,500 on the transplant list today. So to address this challenge that affects all communities in our country, we will change that system. Shifting the balance of presumption in favour of organ donation. Working on behalf of the most vulnerable. That’s what I’m in this for. 

It’s why after seeing the unimaginable tragedy unfold at Grenfell Tower, I was determined that we should get to the truth. Because Grenfell should never have happened – and should never be allowed to happen again. So we must learn the lessons: understanding not just what went wrong but why the voice of the people of Grenfell had been ignored over so many years. That’s what the public inquiry will do. And where any individual or organisation is found to have acted negligently, justice must be done. That’s what I’m in this for.

And because in this – as in other disasters before it – bereaved and grieving families do not get the support they need, we will introduce an independent public advocate for major disasters. An advocate to act on behalf of bereaved families to support them at public inquests and inquiries. The strong independent voice that victims need. That’swhat I’m in this for.

It’s why tackling the injustice and stigma associated with mental health is a particular priority for me. So we are building on our record of giving mental and physical health parity in law by investing more in mental health than ever before. But there is widespread concern that the existing Mental Health legislation passed more three decades ago is leading to shortfalls in services and is open to misuse. Detention rates under the Mental Health Act are too high. And it is people from black and minority ethnic populations who are affected the most. So today I can announce that I have asked Professor Sir Simon Wessely to undertake an independent review of the Mental Health Act, so that we can tackle the longstanding injustices of discrimination in our mental health system once and for all. That’swhat I’m in this for.

This is the Conservatism I believe in. A Conservatism of fairness and justice and opportunity for all. A Conservatism that keeps the British Dream alive for a new generation. That’s what I’m in this for. That’swhat we must all be in this for. 

And we must come together to fight for this mainstream Conservative agenda. To win the battle of ideas in a new generation all over again. For those ideas are being tested. And at stake are the very things we value.

Our precious union of nations – four nations that are stronger as one – threatened by those with their narrow, nationalist agendas that seek to drive us apart. The strength of our society, in which we understand the obligations and responsibilities we have to one another, under attack from militant forces who preach animosity and hate. The free-market economy – for so long the basis of our prosperity and security. An idea that has lifted millions around the world out of poverty – called into question by those who would imperil our future by adopting the failed experiments of the past.

That idea of free and open markets, operating under the right rules and regulations, is precious to us. It’s the means by which we generate our prosperity as a nation, and improve the living standards of all our people. It has helped to cement Britain’s influence as a force for good in the world.

It has underpinned the rules-based international system that helped rebuild post-war Europe and the world beyond. It has ushered in the fall of the Berlin Wall; the end of communism, and the dark days of the Iron Curtain; securing the advance of freedom across Europe and across the world. It has inspired 70 years of prosperity, raising living standards for hundreds of millions of people right across the globe.

So don’t try and tell me that free markets are no longer fit for purpose. That somehow they’re holding people back. Don’t try and tell me that the innovations they have encouraged – the advances they have brought – the mobile phone, the internet, pioneering medical treatments, the ability to travel freely across the world – are worth nothing.

The free market – and the values of freedom, equality, rights, responsibilities, and the rule of law that lie at its heart – remains the greatest agent of collective human progress ever created. So let us win this argument for a new generation and defend free and open markets with all our might.  Because there has rarely been a time when the choice of futures for Britain is so stark. The difference between the parties so clear.

And it’s the Conservative Party that has a vision of an open, global, self-confident Britain, while our opponents flirt with a foreign policy of neutrality and prepare for a run on the pound. Some people say we’ve spent too much time talking about Jeremy Corbyn’s past. So let’s talk about his present instead. 

This is a politician who wants to pile on taxes to business just when we need them to invest in our country the most. This is a politician who wants to borrow hundreds of billions of pounds to nationalise industries without the slightest idea of how much it will cost or how he will ever pay it back. This is a politician who wants to strip us of our nuclear deterrent, without being honest with voters about his plans. This is a politician who lets anti-Semitism, misogyny and hatred run free, while he doesn’t do a thing to stop it. This is a politician who thinks we should take the economics of Venezuela as our role-model.

No… Jeremy Corbyn.

By contrast, when I look around the cabinet table, I have confidence that we have a team full of talent, drive and compassion. A team that is determined that this party – this great Conservative Party – will tackle the challenges of the future together. A team that is determined we will always do our duty by our country.

And our first and most important duty is to get Brexit right. The people have decided. We have taken their instruction. Britain is leaving the European Union in March 2019.

I know some find the negotiations frustrating. But if we approach them in the right spirit – in a spirit of cooperation and friendship, with our sights set firmly on the future – I am confident we will find a deal that works for Britain and Europe too. And let’s be clear about the agreement we seek. It’s the agreement I set out earlier this year at Lancaster House and again in my speech in Florence ten days ago.

It’s a new deep and special partnership between a strong, successful European Union and a sovereign United Kingdom. A partnership that allows us to continue to trade and cooperate with each other, because we see shared challenges and opportunities ahead. But a partnership that ensures the United Kingdom is a sovereign nation once again. A country in which the British people are firmly in control.

I believe it is profoundly in all our interests for the negotiations to succeed. But I know that are some are worried whether we are prepared in the event that they do not. It is our responsibility as a government to prepare for every eventuality. And let me reassure everyone in this hall – that is exactly what we are doing.   So a deep and special partnership is our ambition and our offer. And I look forward to that offer receiving a positive response.

And let me say one more thing – because it cannot be said often enough. If you are a citizen of the EU who has made their life in this country, I know you will feel unsettled and nervous. But let me be clear that we value the contribution you make to the life of our country. You are welcome here. And I urge the negotiating teams to reach agreement on this quickly because we want you to stay.    

Whatever the outcome of our negotiations, Britain’s long-term future is bright. The British Dream is still within reach. For as we look to that future, we do so with the fundamentals of our country strong.

Ten years after Northern Rock, our economy is back on track. The deficit is back to pre-crisis levels, we are firmly on course to get our national debt falling and business investment is growing. The work to get there hasn’t been easy. It’s meant big decisions and huge sacrifices. I know the public sector has had to carry a heavy burden. The private sector has played its part too. But with government, businesses and the public sector working together, we have bounced back – creating record numbers of jobs, and getting more people into work than ever before.  

So while we will never hesitate to act where businesses aren’t operating as they should, let this party celebrate the wealth creators, the risk takers, the innovators and entrepreneurs – the businesses large and small – who generate jobs and prosperity for our country, and make British business the envy of the world. Because we understand that it is the wealth creators whose taxes fuel our public services. It is their success that funds the things we want to do. 

And the difference between us and Labour is that we understand that to deliver the things we want, private enterprise is crucial. That you can’t get something for nothing. Prosperity is key. And when politicians offer the earth but have no means of delivering their promises, disillusionment with politics only grows. 

So over the years ahead this government will adopt a balanced approach to the economy – dealing with our debts, keeping taxes low, but investing in our priorities too. Things like our vital public services, our schools, our police, housing, and our great national achievement, our NHS. Let us not forget that it is this party that has invested in the National Health Service and upheld its founding principles through more years in government than any other.

For we understand that the NHS doesn’t just bring us into this world, make us well if we fall ill, and nurse and care for our families through their final hours. It doesn’t just bear witness to moments of joy and to times of intense sorrow. It is the very essence of solidarity in our United Kingdom. An institution we value. A symbol of our commitment to each other, between young and old, those who have and those who do not, the healthy and the sick. 

Like most people in this hall, it has been there for me when I have needed it. I have early childhood memories of visiting my family GP. More recently, it was the NHS that diagnosed my type 1 diabetes and taught me how to manage it so I could get on with my life. And in recent months, I have seen it at its most brilliant – in the world-class response shown by the doctors, nurses and paramedics when terrorists struck London and Manchester.

To them all – and indeed to the public servants everywhere who so often go unsung – let me say this: for your service, your hard work and for your dedication – thank you. So I rely on the NHS. I believe in the NHS. And because we believe in ensuring that a world class NHS will be there for generations to come, we will increase funding per head for every year of this parliament, we will oversee the biggest expansion in training for doctors and nurses, and we will always support the service to deliver safe, high quality care for all – free at the point of use. That’s what our balanced approach to the economy will help us to do.

With our economic foundation strong – and economic confidence restored – the time has come to focus on Britain’s next big economic challenge: to foster growth that works for everyone, right across our country. That means keeping taxes low, spreading prosperity to all corners of this United Kingdom, and getting out into the world to trade, export and help our economy grow.  

So as the world’s leading advocate for free markets and free trade, we will pursue new free trade agreements with countries around the world. As we roll out our modern industrial strategy, we will attract and invest in new high-paid, high-skilled jobs – spreading prosperity and opportunity to every part of this country. Tackling our economy’s weaknesses like low levels of productivity, backing our nation’s strengths, and bringing investment, jobs and opportunities to communities that feel they have been forgotten for far too long.

We will continue to reform education and skills training so that people growing up in Britain today are ready and able to seize the opportunities ahead. Starting in our schools – those great drivers of social mobility – where our record is strong and our legacy is proud. Because our reforms are working. And after years of stagnation under the last Labour Government, we are turning things around. But there is more to do. Our reform programme goes on. Because it’s simply not good enough that if you live here in the North, you have less chance of attending a good school than someone living in the South.

So we will extend the Free Schools programme for a new generation of young people – building 100 new Free Schools in every year of this Parliament. Not because our ideology says so… but because Free Schools work. And it’s the right thing to do.    

And we need to bring that same energy to skills training too. Preparing our young people for the world of the future. Setting them up to succeed. Taking skills seriously with new T-levels for post-16 education, a new generation of Technology Institutes in every major city in England – providing the skills local employers need, and more technical training for 16-19 year olds. A first-class technical education system for the first time in the history of Britain. Keeping the British Dream alive.

That’s how we will prepare Britain for an open, global future. I know that some young people worry that Brexit means we’re turning our back on the world. That Britain will no longer be open, but closed. But we reject both the isolationism of the hard-left and those who would have us turn inward, and we choose a global Britain instead.

As Asia booms and the world looks to the East, we will reach beyond the borders of Europe to become a trusted friend to nations all around the world. We will meet our commitments to international security, with the finest armed forces and intelligence services anywhere on the planet. We will build an outward looking Britain that cooperates with other nations to tackle the great challenges of our time like mass migration, modern slavery and climate change. And we will provide a moral lead in the world, and set an example for others.

Meeting our commitments on security: committing fully to the NATO alliance and spending 2% of our GDP on defence. Remaining firmly committed to renewing our independent nuclear deterrent, to help uphold the security of the world. And leading the world in cracking down on modern slavery – because if you are buying and selling another human being, you are undermining all that is right. The very basis of our humanity.And we must bring this outrage to an end. 

And under this government, we will continue to meet the international aid target, spending 0.7% of our GNI on international development. That’s not just because it’s good for Britain, but because it is the right thing to do.

Today, UK Aid is being used to bring food to starving children in conflict zones like Syria and Iraq. UK Aid is being used to bring water to drought stricken parts of Africa. UK Aid is helping to educate women and girls in parts of Asia where that most basic of human rights has been denied to them for so long. Yes, charity may begin at home, but our compassion is not limited to those who carry the same passport. We should be proud that under a Conservative Government, this country is one of the few that is meeting its duty to some of the poorest people in our world. And as Prime Minister, I will ensure that’s something Britain always continues to do.

But let me also be clear: it is absurd that international organisations say we can’t use the money to help all those that have been hit by the recent Hurricanes in the British Overseas Territories. Many people on those islands have been left with nothing. And if we must change the rules on international aid in order to recognise the particular needs of these communities when disaster strikes, then that’s what we will do. 

This then is the Britain we choose. Not a Britain that retreats behind its borders, but a global Britain that stands tall in the world. A beacon of hope and an example to others. A modern, compassionate Britain that we can all be proud to call home. 

And we must renew the British Dream at home through a determined programme of economic and social reform. A programme that champions our belief in free markets by being prepared to reform them when they don’t work. That ensures our economy and society work for everyone in every part of this country, not just the privileged few. Because for too many, the British Dream feels increasingly out of reach. 

The effects of the financial crisis – nearly a decade of low growth, stagnating wages and pay restraint – linger. The boom in the housing market means that while some have done very well, for many the chance of getting onto the housing ladder has become a distant dream. And it’s that fact, perhaps more than any other, that means for too many the British Dream is increasingly out of reach.

Just over a decade ago, 59% of 25-34 year olds owned their own home. Today it is just 38%. It has always been a great sadness for me and Philip that we were never blessed with children. It seems some things in life are just never meant to be. But I believe in the dream that life should be better for the next generation as much as any mother. Any father. Any grandparent. The only difference is that I have the privileged position of being able to do more than most to bring that dream to life.

So I will dedicate my premiership to fixing this problem – to restoring hope. To renewing the British Dream for a new generation of people. And that means fixing our broken housing market. 

For 30 or 40 years we simply haven’t built enough homes. As a result, prices have risen so much that the average home now costs almost 8 times average earnings. And that’s been a disaster for young people in particular. We have begun to put this right. The number of new homes being delivered each year has increased significantly since 2010. Our Housing White Paper set out plans to increase it further, ensuring councils release more land for housing, and giving them new powers to ensure that developers actually build homes once they’re given planning permission to do so. And because it will take time for greater housebuilding to translate into more affordable house prices, we have introduced schemes like Help to Buy to support people who are struggling right now.

But the election result showed us that this is not nearly enough. We’ve listened and we’ve learned. So this week, the Chancellor announced that we will help over 130,000 more families with the deposit they need to buy their own home by investing a further £10 billion in Help to Buy. 

We have announced measures to give the increasing number of families who rent from a private landlord more security – and effective redress if their landlord is not maintaining their property. And today, I can announce that we will invest an additional £2 billion in affordable housing – taking the Government’s total affordable housing budget to almost £9 billion.

 We will encourage councils as well as housing associations to bid for this money and provide certainty over future rent levels. And in those parts of the country where the need is greatest, allow homes to be built for social rent, well below market level. Getting government back into the business of building houses. A new generation of council houses to help fix our broken housing market. So whether you’re trying to buy your own home, renting privately and looking for more security, or have been waiting for years on a council list, help is on the way.

It won’t be quick or easy, but as Prime Minister I am going to make it my mission to solve this problem. I will take personal charge of the government’s response, and make the British Dream a reality by reigniting home ownership in Britain once again.  

And let me say one more thing. I want to send the clearest possible message to our house builders. We, the government, will make sure the land is available. We’ll make sure our young people have the skills you need. In return, you must do your duty to Britain and build the homes our country needs.

And to renew the British Dream for a new generation of young people we must also take action on student debt. As Conservatives, we know education can be the key to unlocking the future. That’s why for more than a century, it has been Conservative Education Secretaries who have driven the reforms that have widened access and raised standards. And it’s why we want everyone to have the opportunity to benefit from studying more after they leave school. Because it’s good for them and good for the country too.

But today, young people take on a huge amount of debt to do so. And if we’re honest, some don’t know what they get from it in return.

We have listened and we have learned. So we will undertake a major review of university funding and student financing. We will scrap the increase in fees that was due next year, and freeze the maximum rate while the review takes place. And we will increase the amount graduates can earn before they start repaying their fees to £25,000 – putting money back into the pockets of graduates with high levels of debt.  

For while we are in favour of free markets, we will always take action to fix them when they’re broken. We will always take on monopolies and vested interests when they are holding people back. And one of the greatest examples in Britain today is the broken energy market.

Because the energy market punishes loyalty with higher prices. And the most loyal customers are often those with lower incomes: the elderly, people with lower qualifications and people who rent their homes. Those who for whatever reason, are unable to find the time to shop around. That’s why next week, this Government will publish a Draft Bill to put a price cap on energy bills. Meeting our manifesto promise.  And bringing an end to rip-off energy prices once and for all. 

So we have a big task before us. An agenda to follow. A duty to uphold. To renew the British Dream for a new generation, and bring our country together again. For a country that’s divided can never make the most of its potential. And we need to harness that potential if we’re to compete and succeed in the years ahead.

That’s why where others seek to bring division, we must stand united. Recognising as Jo Cox put it that we have more in common than what divides us. It’s why I will always be proud to call myself a Unionist – and proud to be the leader of the Conservative and Unionist Party too. Because that word means something special to me. It stands for this great union of nations that has so much to offer the world. And it stands for this great union of people – people from all over the world who have made their homes here and are proud to call themselves British. Attracted by the strength of the British Dream. We are an example to the world of how people of different colours and creeds can live side-by-side. And we celebrate that. 

And as a proud Unionist, I take comfort that the General Election saw the threat of nationalism set back, the case for a second referendum in Scotland denied. And wasn’t it a brilliant result for the Scottish Conservatives and their superb leader, Ruth Davidson? 

Together, quite simply, we are stronger. So we must unite the country around our Conservative vision of a global, prosperous Britain in which the British Dream is alive. That means showing that we’re determined to make a difference. To doing something, not being someone. To doing our duty by Britain again. Because people are fed-up with the game-playing, the name-calling. The refusal to listen to the other’s point of view. We can look around the world and see where this approach to politics gets us – anger, recrimination and polarisation too. 

So we must – all of us – look inside. Consider how we conduct our politics in this country. And find a better way. For there is a big problem in our politics when an MP from one party refuses to be friends with those of another. There is a problem in our politics when a leading journalist from our national broadcaster has to hire bodyguards just to be able to do her job. There is a problem when one of our two great political parties is so riven with the stain of anti-semitism that even one of its own council leaders questions if they will be welcome in his city again.

Let me be clear: racism, intolerance and hatred has no place in British politics or British society. This party will never permit it. We will always stamp it out. Britain can do better than this. For this country is – and has always been – the home of tolerance, a bastion of freedom and a beacon of democracy. And this city of Manchester knows it better than anyone. Because four months ago, this city came under attack from those who hate our country and despise our values.

The liberty we extend to everyone, whoever they are and wherever they are from. The way in which our society is open, accepting, and tolerant of others. The fact that we celebrate diversity and champion difference. The way we encourage people from all backgrounds and beliefs to live their lives in freedom. To be all they want to be. And because of this hatred, they chose to take out their rage on the defenceless and vulnerable. The innocent and the young.

Let us be in no doubt: the responsibility for such an outrage lies with no one other than those who planned it, and those who saw it through. And this party, which knows the terrible toll of terrorism all too well, will never seek to justify or excuse such acts of terror. We will stand strong in the face of terrorism and ensure our values always prevail.

But what we remember most from the cowardly attack on the Manchester Arena is the response of the Spirit of Manchester. People throwing open their doors to strangers, giving them a place to shelter. Taxi drivers helping people get home safely, accepting no fare in return. Ordinary people rushing to the scene of destruction. Putting themselves in harm’s way. The incredible men and women of the emergency services running towards the carnage, while others dropped what they were doing and went back to work to help.

But above all, an image of a community coming together. Men and women, young and old, black and white, Muslim, Christian, Sikh, Hindu, Jew, standing together as one. And it was that image of this city – an image of modern Britain in all its diversity, compassion and strength – that was shared around the globe.

And it said something about us. It said that this is modern Britain. A country of promise, of potential, of hope. And perhaps we too easily forget that. But we must hold on to that essential truth. For we are a nation of dreamers, with the capacity to deliver those dreams too.

Cities like Manchester were the pioneers that fired the industrial revolution, helping to make Britain the workshop of the world. And it’s this heritage that means today we export to and trade with nations in every corner of the globe. It was here in Britain that we discovered the structure of DNA, the biological code for life. All the technologies for sequencing the human genome have been developed in this country. And today we are using this knowledge to improve human health.

Back in the 1970s it was scientists in Oxford who invented the lithium ion battery which powers all laptops and mobile phones. Today we continue to be pioneers in this sector, funding new battery technologies for electric cars and renewable energy. Technologies we will soon be exporting around the world. Within a few hundred yards of here you will find the world’s first passenger railway station. And a few hundred yards beyond that a new research facility to develop the extraordinary material Graphene, for which two scientists here in Manchester won the Nobel prize.

And let me say this to George Osborne – you were right to back it as part of the Northern Powerhouse and this Government will back it too. So the future is bright, our potential is great, and if we choose the right path, the British Dream can be renewed. So let us do our duty by Britain. Let us shape up and give the country the government it needs.   

For beyond this hall, beyond the gossip pages of the newspapers, and beyond the streets, corridors and meeting rooms of Westminster, life continues – the daily lives of working people go on. Many pay little attention to great conferences and gatherings like this. They get up early and go to work. They want to know their job is going to last and that they are going to get paid a fair wage. They want to know that the school their children go to is the best it can be. That they will be cared for when they fall ill. That they will have safety and security as they advance towards old age. 

And they want to believe in the British Dream: that their children will do better than themselves. That they will have the opportunity to lead happy, successful, secure lives. That they will have the chance to be all they want to be. These are the priorities that it is our duty to respond to. The priorities of working people up and down this land. And they must be our only focus.

Not worrying about our job security, but theirs. Not addressing our concerns, but the issues, the problems, the challenges, that concern them. Not focusing on our future, but on the future of their children and their grandchildren – doing everything we can to ensure their tomorrow will be better than our today.  

That is what I am in politics for. To make a difference. To change things for the better. To hand on to the next generation a country that is stronger, fairer and more prosperous. And to renew the British Dream for a new generation again.

None of this will be easy. There will be obstacles and barriers along the way. But it has never been my style to hide from a challenge, to shrink from a task, to retreat in the face of difficulty, to give up and turn away. For the test of a leader is how you respond when tough times come upon you. When faced with challenge, if you emerge stronger. When confronted with adversity, if you find the will to pull through.  And it is when tested the most that we reach deep within ourselves and find that our capacity to rise to the challenge before us may well be limitless.

That is the story of our party. That is the story of our country. And that is the resolve and determination we need as we turn to face the future today.

So let us go forward together. Confident in our values. Clear in our vision. Sure in our purpose. With a rich, ambitious agenda to follow. A bold, exciting mission to pursue. Let us fulfil our duty to the British people.Let us fulfil our duty to our country. Let us fulfil our duty to Britain. Let us renew the British Dream.