day in america. because if there's one thing i've learned traveling around the world, it is that successful companies, successful cities and successful countries start their day every day with a very simple question, what world am in my living in? what are the biggest trends in this world, what are the policies that need to put in place to take advantage of those trends and to nurture all the potential from them? that is not how we start our day in this country. we start our day in this country with her two biggest parties taking out a large crowbar and asking how they can stick it in the wheel of the other party in order to win the 24 hour news cycle. part of doing the research for this book i visited singapore and there is something a singapore economist said to me that stuck in my mind. he said tom, we in singapore live in a thatched hut with no doors and no windows. we feel every change in the direction of the wind. we feel every change in

temperature. you americans are living in a wreck house with central heating. you seem to feel nothing.

f-hour. [applause] >> thank you. thank you very much for that the chechen commanders great to be

here. i think this is a brilliant innovation. you take relatively unused space in central urban locations and make it available for entrepreneurs and socialist bernard's and starbucks. this is absolutely a key facility for people who have a great idea and want to build it into something but can staff and some believe was office. this is a great idea for the government to take up unused space that we have so that we can help build more osbourne oriole and social of memorial society that we all want to see. but these are difficult times. we have to deal with the legacy of the deficit and the debt. the eurozone has been deep and continuing trouble. and yesterday unemployment rose again. across europe economies of stalled. here in britain this is an active government sleeves rolled up, doing everything we possibly can to get our economy

moving. the biggest work programs as the 19,373,000,000 people, a massive drive, major initiatives on regional growth, infrastructure, enterprise many people are questioning not just palin when we will recover but the whole way in which our economy works. so when our economic challenge starts with stealing with the debt it must not end there. we must aim higher than just the storms that are affecting the international call of because i believe that i am just this current diversity. we must aim to build a better economy, one that is truly fair and worthwhile. my argument today is this. we will build a better economy by turning back on the free-market. we will do it by making sure that market is fair as well as free. well of course, there is a role

for government to regulation, intervention the real solution is more enterprise, more competition, more innovation. in this debate the kind of economy that we want to see position is very clear. i believe that open markets and free enterprise of the best imaginable force for improving human wealth and happiness. they are the engine of progress. they generate the enterprise and innovation that lifts people out of poverty and gives people an opportunity. and i would go further. where markets work open markets and free enterprise actually promote morality. why? because they create a direct link between contribution and reward between effort and the outcome. the fundamental basis of the market is the idea of something for something an idea that we need to encourage, not condemned.

so we should use this crisis of capitalism and to improve markets but not undermine them. i believe conservatives in particular are well-placed to do this. because we get the free-market. we know its failings as well as its strengths. no true conservative has a net you believe that all politics and politicians have to do is stand back and let capitalism representative. we know that every difference in the world between a market that works and one that does not come markets can fail. uncontrolled globalization can slide into monopolization sweeping aside this small personal local. ..

which should allow everyone to share in the success of the market. at the idea of social responsibility is not some new departure for my party. it was on public accountability with willing pets reported under the control of government. later the same spirit of responsibility helped write the campaign against the slave trade, and appealed to lead to force the price of food and the israeli electorate that jury asked, which began to set working conditions. of course it is true that great campaigns for reform restraints

for many other business to social responsibility, watching other business, correct the market failure recognizing obligations has been part of the conservative mission of the story. a large part of my leadership has been about renewing the commitment and a long-standing tradition. corporate social responsibility and environmental responsibility has been constant themes in the arguments i've made and policies have developed. soon after i was elected leader and said that we should not just stand up for business, but also we should stand the two big business when it was in the national interest to do so. three years ago i argued that previous government turbo s. and i turned a bright day to corporate excess, while we believed responsible capitalism and government would make it happen. with the second principle, popular capitalism is just important as the first social

responsibility. we need to open up markets. we need to get more people engaged hme popular capitalism, which is what you see when he was at the space of the health care today today in new zealand. conservatives have always believed in ownership society. a theme has been the ambition of building a nation of shareholders and savers of homeowners. mln champion mr. homeownership giving people an asset of their own. or thatcher did the same of privatization with the right to buy canceled ads. in two years ago i called for a new popular capital one that we recognize what's going to a capitalism in which makes people make something of themselves, to get a good job, own a home started business. today this mission of improving markets and ensure it the airfare as well as free and for many principles of social responsibility and genuinely popular capitalism should have three things that is sorry.

for us, we need to be clear about the specific mistakes of the last decade. second, we need to put the right rules and institutions in place to correct them. and third and i think this matters more than anything else is we need to open up enterprise and opportunity so everyone has a chance to participate and benefit from a genuine market economy. we need to boost competition, back enterprise, encourage adventurous spirits and challenge the status quo. that is how we'll build a a more worthwhile economy. so first, what went wrong? the last government claimed to have got rid of movement. what really happened? did it get out of control clicks this series is if you like a series of lethal imbalances in our economy between north and south, financial services and manufacturing between the people that huge awards at the

top. everyone else seemed to get left out. the truth is the last government made some data for fast and packed with the. it encouraged the economy because it needed to pay for spiraling welfare costs and a very much top-down intervention state. it tolerated market failure because at heart he didn't accept the markets would be made to work properly. he seemed frightened of challenging vested interest, believing too often that the interest of big business were always one of the same as those with the economy as a whole. all this left us with a level of public spending we could afford any model economic growth that would work. now i understand why this has made any people totally disenchanted with markets even angry. far from abolishing boom and bust, what we had is the biggest boom and the biggest baddest where everyone has to share the data. and thanks a while, only a few seem to get a share of the profit.

too many people found they couldn't count on their savings growing. they couldn't afford to buy a home. they wondered how they would pay their bills and old-age. in the city kumble should've been a powerhouse of competition and creativity became instead a byword for financial visit tree that left the taxpayer with other risk in a fortunate few with all of the rewards. so instead of a popular capitalism, we ended up with an unpopular capitalism. so the next question is what needs to change? my answer is we need to change the way the free market works not just up the free market from working. we need to reconnect the principles of risk, hard work and success with reward. when people take risk with their own ideas, their own energy, own money, when they succeed in the contested market and anyone can come and knock them off their perch at any time, we should celebrate entrepreneurs succeed

and create wealth in get rich in that way. we should support business leaders who earn great rewards for building great businesses, for doing great things for their come to me for economy and for society. they should be a probable functioning market for talent at the top of business. and that will inevitably mean that some people will earn great rewards. but that is away from what we've seen in recent years with the bonus culture, particularly in the city has got out of control with the link between risk hardware, success and reward has been broken. this is not the politics of anything. the government of the bank of england reminded us this week, excessive undeserved or mrs. reduced funding that's debatable for small businesses. lurch rumors for failure and companies are suffering become even less is left the customers for shareholders.

so next week the business secretary will set out a detailed proposals on executive pay, including any necessary legislation to follow. so there is a need for new rules. but we should be clear about what we do most to bring about true responsibility. we need to make the market work and will do that by empowering shareholders and using the power sector. see as well. that is why i welcome this week's decision by fidelity worldwide to add their cars for better policing of boardroom pay. it's responsible action to make markets work in the thread that runs to his government. regulation is part of it, but again the last government that regulation of wrong way around. small companies were often strangled in red tape of the banks were allowed to live with. we need to turn the tables of this are acting to make banks for the people of the firms who rely on it as implementing the vickers report, separate investment banking for retail

banking. we would ensure banks are properly capitalize should people buy investors not by taxpayers. we're completely overhauling financial services regulation, abolishing the apartheid system and putting in place a system that will work and protect the consumer, were fundamentally reviewing the finance commission gave to strike a balance between risk and reward and private sector. and almost busting up in the cozy collusion between big business and big government out of public-sector contracts come a market worth 150 billion pounds a year. none of this should mean more regulation. it means less not better regulation. we need strong frameworks that people can understand what am must in effect give tape. that's a life behind the new rule that the chancellor is examining, which will make the tax cuts and other, not more complex this stuff abuse at the

same time. at the end about this, this government will have reduced regulation, not increased it. the third part of the mission to improve pockets and make them various illustrious enterprise and opportunity. capitalism will never be genuinely popular in the savings opportunities for everyone to participate and benefit. of course this means a greater emphasis on equality of opportunity. you can never create a fair economy if there are people who are automatically excluded from it through poor education. or if there are people who encouraged that the only way to live their lives is to depend on state handouts. people need the capacity to succeed. but he said his government has made the education revolution a priority with the academies, preschool, richter come exam and tolerance of failure as we saw this week with the abolition of the ij you can have a score less than good being called

satisfactory. we are shrinking the funding system in education and vapor of the poorest with a premium that means disregarded pupils get more. so every time a child or preschool walks into a school, that school knows they'll get more money teaching that people must missile will get help to turn their lives and prospects around. in an age where we have to cut public spending, were actually investing more in early years. and we're intervening comprehensively and family is failing to help children who otherwise look at a poor start in life. the popular capitalism also means believing in what i call the insertion economy, where we support the new, innovative and bold and give a chance for thousands upon thousands in a country who aren't envious yet but want to be come whose ideas and energy and enterprising ambition have crucial spring

rolls, intelligence, ingenuity energy. i believe witnesses in the business potential in you can see it a few yards from where i'm standing. we need to have a theory that says this is opportunity for review. i admire almost went than anything the bravery of those who turn my back on security of the regular wage to follow their dream and started from any. if you take a risk on a quicker job, create google or facebook could wind up a billionaire and if you take a punch, message your money in a hugely risky set up and made a fortune. let's also recognize people who take risks, to succeed the first time, who often find the first investment of the first business failed, doesn't succeed but who persevere. we have to recognize that as a process leading to success, not a failure in itself. they want to see it happen and

encourage it. but if i were taking a whole series of steps. for improving entrepreneurial beliefs of the founders of come these get a bigger slice of the gains they made. it's why we want to be entrepreneur thesis of the best and brightest would-be entrepreneurs around the world and start their business right here in the u.k. if i was implemented some of the most diverse texas and as for early-stage investment of any developed economy inextricably launching a new campaign to start up with, helping people take that a step in the business for themselves. it is a basic truth that if people have a stake in business they will support its growth and sharing his success. but the reality is even as our country has grown richer, participation has actually shrunk. yes we are boosting shareholding by giving tax of two people invest in useful businesses. for the olympic year 2012, were taken another step that hasn't had much easier.

we are effectively abolishing capital gains tax for people who this year are prepared to have a go and invest in a startup. i don't believe we should start there. we need more shareholders, more homeowners, march but her spirit that is why we are real degrading three to buy or cancel a home in transforming the failing housing rocket. as the deputy prime minister said monday, we need to encourage different models of capitalism. what more employees of a much more direct stake in the success of their come to me. this is an issue i have long cared about. back in 2007 i established the conservative cooperative movement which now has 40 conservative mps as members. any government where we are providing new ways for public-sector workers to create mutual said on a stake in the first success come with employee led mutuals not delivering on the civilian pounds worth, i think it's right to take further steps because we know that

breaking monopolies, encouraging choice opening up new forms of enterprises not just safer business, it's also the best way of improving our public services too. there's over 12 million co-op members in the u.k. it is if you like a vital bunch of popular capitalism. rate other too many barriers in the way to extending and improving that record. there are over a dozen separate identity pieces of legislation that cost and complexity to the process. today announced they will be brought together and simplified and a new cooperative bill that will be putting before parliament. i wonder in these difficult economic times to achieve more than just paying down the deficit and encouraging growth. i want these times to lead to a more socially responsible and genuinely popular capital one in which the power of the market and obligations of responsibility really come together.

one in which we improve the market by vacated fare as well as free in which many more people get a stake in the economy and the share of the rewards of success. that is a vision of a better or worthwhile economy we are building, an economy where people who work hard every words that are fair and true conservatives of the world. an economy in their destiny because they started their own business or shareholders in the company they work for or indeed part of a cooperative an economy river and has a chance to build assets come to pass on links the next generation. that is how we make markets work for all of us, to spread wealth, freedom and spread opportunity. thank you very much indeed for listening. [applause] thank you very much. we've got time for some questions.óo let's start with james alexander this evening.éñññ÷

>> by ministers james alexander, and bbc.??3ñ? ? you have to present the proceeds of poorly on a treadmill andg owned banks for million dollarsx businesses click >> the short answer is yes. first of all distorting the "financial times" this morning as i'm afraid to say that accurate. there has been no meeting of the remuneration committee at the bank of scotland and so no decision has been made. for our part as major shareholders in the business, first of all we say we are repeating what we did last year and restricting bonuses and all state owned yanks, restricting the cash element for 2000 pounds. you might ask why there's any bonuses that all. i argue there's people working hard in the business' bank managers tylers for junior employees leaking their target doing my best try to restore portions of their bank and i think it's right there should be a small cash bonus available for

those people/year. that would apply to anyone at the top of the organization as well as anywhere else. in terms of the broader question of the chief executive of the rest as i've said is there's no meeting of the remuneration committee. that to be a proper process. if there's a bonus will be a lot less than it was last year. but the process has set up should be followed in the proper way. david shipley and from the daily mail. >> thank you, prime minister. if you agree it is what are you going to do about it? >> i think it's right there is a proper process to be followed for some enough disorder. there is a committee in terms of honors that exist and that will now examine this issue. i think it is right that it does so and there's a proper process.

obviously take into account the financial services authority report, which i think is material and import because of what he says about the failures of what would amount into his response will not investigate. they should do the work rather than the prime minister himself. for herself. christya. >> thank you, prime minister. anyone watching the speech today might ask him if he can act on a company of which he rode 83% are your words noteworthy a? are ultimately meaningless. >> i have that day. as you just heard, there will be a 2000-pound cash limit how many bonus for anyone whether they are at the top of the cab near the bottom of it. that is the action of this government took last year and the action we asked rbs to take again this year. as for the rest of the process the review duration committee

needs to be, discussions need to be held, decision made but clearly the british government is a major shareholder and has a major interest message is heard has a pretty clear view. >> thank you, prime minister. you are right to comment on the good tradition of corporate responsibility in this country. w ó i sometimes they can experience it is rather patronizing kind of business leaders how to run a business. i think we could argue that we could tell them a bit more about how to motivate staff rather than ethical and sustainable business. so the practical two hopeful suggestions number one. how about encouraging come needs to take charity leaders onto their board? number two with the bankers take the bonuses. tell them to give it to charity or invest in social enterprises.8

>> some great ideas there. let me just remind the principle behind what you're saying is entirely ready.÷÷÷÷÷ for too long in this country, social responsibility was seen as some in that businesses should sort attack on to an otherwise third street port profit-making model and now i began to shed a bit of money to this charity or that social enterprises to. that's completely the wrong model. the nakedness model for seems like a hundred years. but business status should actually incorporate all of social responsibility. the way it treats its customers, its staff, the weighting gauges in the world in the businesses sometimes they do think you're taking this a bit far, i could actually go sit in the classroom with young children and see what their aspirations are for the sort of businesses that want to work for consume products by coming to you within all the rest of it.

he will soon find out the corporate social responsibility is not some businesses should do as an add-on. it should be absolutely core to the way they do business. from that flows consequences and one of which you think your first idea is saying to businesses as you look at who you want to have on your board actually the awful word mainstreaming, but will save would help if you have someone who really understood the social enterprise what social responsibility is all about. the second suggestion i bonuses is also a good one. the point the governor of england made with importance, which is links to sites pay out more in bonuses or pay out more in dividends, they are going to effectively be reducing the capital base on which they commit their decisions. i think we all know one of the problems in our country today is actually difficulty of getting hold of bank lending. that is why the government has taken an intervention, his strong start to the murdoch

agreement, which was my initiative is fitting that the banks of a book you want some predictable rules on tax and what is going to happen in terms of banking. you are only going to get that if in return you actually set //ñ out to the sort of funding are doing to businesses large and/ñw/ñw small. /ñw i think it is important that we have done that and actually those targets are on course to be met. maybe one or two more from the press. the bst can defend themselves in wakulla today. >> thank you, prime minister. their announcement today of a cooperative bill is very very welcome. it's an historic decision that would clean up a fragment dated classic process that will be good for cooperative business. over 12 million members of metrical within individual shareholders in deed in the u.k. this year has been declared to the united nations vis-à-vis the

international year of cooperatives in the united nations asks government to review their framework. i think the u.k. is the first country in the world to get that commitment under way. i wonder whether you have a message for the 12 million numbers of cooperatives large and small up and down the country this year. >> first of all thank you for telling the ended in an international obligation of which i wasn't entirely aware. i'm very grateful for that. it is important to clear up a lot and make it easier and encourage creation of new co-ops large and small, clearly trying to cut the paperwork is a sensible thing to do. i think my message just keep on doing what you're doing. i think we want to see a spread of different business models, not just in the private sector but the public site. is doing a lot of work to encourage public services is

more appropriate in some rather than others. i think trying to give people a greater sense of ownership in what they are doing is hugely important. if you ask people about what it is that makes them satisfied in work and happy at all the rest of it, it is obviously partly collect good to your job security, but it's also whether you feel you have a real stake in what you're doing. i have often had my leg pulled pork talking about happiness and the rest of it they think it is important. i think there's a growing understanding that it is about the control you have come to influence you have come as setting your work as well as vital themes of pay and conditions. >> , no, the fact.

>> prime minister, just go back to is you just described the out-of-control bonus culture. what about the nonstate owned banks, which as you'll note the vast majority of the city. you have no control over them. he's got a few opportunities today to exert any moral suggestion they should be paying their bonuses to charity. you are totally powerless over goldman sachs. >> i don't accept that. what the government is doing is recognizing, but we can't legislate for the pay level in every business in every company in the country. where you can do is make this market for top pay work properly. it's quite clear it's not working properlyí today. -- india saw 49% increase in the value of pay and the ftse top management, but she only saw a 4% increase in the proceed. as i said in my speech,

rewarding success has become big. >> was a date and morality onto mass., are you prepared to use a state to limit the power and influence of big capital? >> the answer to that is a straight yes. if you have an example where despite ascii participants in the market to exercise responsibility they don't clearly you have to intervene with the law. no conservative believes that america without law. there's all sorts of practices you have to ban. for instance, insider trading or what have you. obviously a conservative hopes that she'll have a max on extent of responsibility allowing you to have a minimal extent of law whereas i would say they tend to believe you need a maximum extent of law because we can't ever trust anyone to behave responsibly in any way.

let me encourage responsibility when possible a much as they were necessary. the good example to prove i am somebody consistent was yesterday when i was asked about on line and television gambling advertising. i basically believe that kinsley is an industry that should be licensed. it should be legal but he must behave responsibly. if you want, the government has to think again. i'll be having meetings last week about the issue of how to advertise to children and issues around commercialization and sexualization of childhood. again, there should be a strong repeal for behaviors from business of the things are handled properly in the marketplace. if they can't be, you have to go to rules and regulations. that is solid now. thank you thank you indeed for comingcuqú on. thank you i can to the house for having us. thank you very