Chancellor Gordon Brown says Labour needs to be 'clear about our ideological bearings' on equality to achieve 'equality of opportunity and fairness of outcome' for all.

Conversation between Oona King (OK) and Gordon Brown (GB) at the Fabian Society New Year Conference 2007, on 'The Next Decade', held at Imperial College, Saturday 13th January 2006, introduced by Ed Balls (EB), Chair of the Fabian Society.

GB: Thank you. It's great to be here.

OK: Well Ed, thank you for that introduction. I know it's going to be a great year for the Fabians, with you as the new Chair, and as you were saying they haven't done badly – not a bad century or so. And so on that note, straight on to the main event.

Gordon, we've been saying, 'Education, Education, Education' for years, years, years. What's new about your approach to education and how did your own educational experiences shape you –because weren't you about ten years old when you went to university?

(laughter)

GB: Nine.

(laughter)

I was actually sixteen when I went to university, but funnily enough I didn't arrive to any courses until I was 18 because the minute I arrived at university I ended up with this rugby injury, I was in hospital for much of 18 months, so I think I could only answer questions about Radio 1 pop records in the first 18 months, because I was lying flat out after my eye operation, and I didn't learn much about economics, and you may think that that shows in the way that I'm Chancellor of the Exchequer.

But being at University and being a beneficiary obviously of the education system, I think our number one priority for the future, what should have pride of place, for it's a passion and I think it should be our national passion, that we are the first generation that genuinely delivers educational opportunity for a lifelong recurrent and permanent education – not just from three to eighteen which would be an enormous achievement and Alan's been talking about it this week – but lifelong, permanent education, so that at any point people can use the education system. And it's the best economic policy, but also the best social policy, because it provides the opportunity that people need to realize their potential to the full.

And I'm very struck by the fact that when John F Kennedy decided in the 1960s to put a man on the moon, and they went to Cape Canaveral, and they interviewed the cloakroom attendant there, and they said, 'What are you doing?' And instead of saying, he was a cloakroom attendant, he said, 'I'm helping put a man on the moon'.

And I think this sense of national mission, if we can mobilize all our national resources, that we ensure that the potential of each person in our country contributes and each determines the posterity of all. And that means quite major investment in education in the years to come. It means not just a change in the education leaving age, it means far more individual tuition for individual students. It means, in essence, that we focus our national effort on making sure that we not only lead the world as world class in education, that we show the world, particularly the developing countries, the importance of education for the future.

I think it's Thierry Henry who said that I score every goal with my head. And what he means is that he as a footballer, has to think about what he has to do, and almost every other profession in every other occupation, if we can help people realize that they have genuine potential, I think that's one of the great challenges. It is the key to economic success in the global economy. I'm more conscious of that than ever before: I've been to China, India – against all the countries of the world, we will only survive and succeed by our creative skills, our ingenuity, our talents.

And what better - what better - objective for the Fabian Society, which led the way on education over its 120 years, than that every child in Britain, and every adult, should have the chance to realize their potential to the full – to bridge the gap between what they are, and what they have it in themselves to become. That seems to me to be a national mission for the future.

OK: Thank you Gordon. I still don't want to let you slip away from your student years that easily. Erm, and you've got a reputation now for having immense breadth of detail. But weren't you actually not such an organized student?

GB: Yes, well I did a thesis at Edinburgh University, I came to London – actually to a Fabian conference – I arrived back, I found my flat in Edinburgh had been burgled, the police were there looking round. They went into the room that you could call my study, where all my papers were, and the police chief said to me, 'Totally ransacked, sir. Totally ransacked'. I had actually to point out to him that it hadn't been touched by the burglars. (laughter)

I'm not very well organized at meetings either. I remember, when I became a Member of Parliament for the first time, I was invited by Jack Jones to speak to a pensioners organization in Fife, where my constituency is, and I arrived there not knowing very much about the details of the meeting, and I turned to the chairman and I said to him, 'How long do you want me to speak?' And he said, '45 minutes'. And, you know, you wouldn't appreciate a speech for pensions that went on for 45 minutes, and everything that was to be said about the international comparisons, about what had happened under Margaret Thatcher, was said. And I sat down and the chairman said, 'Look friends, there's not enough time for any other speakers, and I'll just say to the band that is playing for our pensioners that the repertoire will have to be cut back. So I said to him, 'Look, I thought you said 45 minutes?' And he said, 'four to five minutes'.

(Laughter)

So please keep me right on that.

OK: So, no pressure there!

Now, although you have pulled millions of children out of poverty and I know that everyone in this room applauds what you've done on that level, we are still struggling to stem growing inequality in this country. One measure of this is the failure to get more children from low income families into the top universities. How does this really square with your commitment, your passion, around social justice.

GB: This is the great challenge. I know the Life Chances review of the Fabians, and I do applaud the Fabians for doing that, for beginning the discussion on this. I know that there is more work to be done on this in the Fabian's work programme this year, on education, and this is the great challenge.

You know, there's this great story, of Olaf Palme going to see Ronald Reagan in America, and Olaf Palme was the great Swedish social democratic Prime Minister, leading the campaigns against poverty and inequality, and he went to see Ronald Reagan in the White House. Before he saw Ronald Reagan, Reagan turned to his advisors, and he said, 'Isn't this man a Communist?' And Ronald Reagan's advisors said, No, Mr President, he's an Anti-Communist. And Ronald Reagan said, I don't care what kind of Communist he is.

But Ronald Reagan asked Olaf Palme, 'What do you really believe? Do you believe in abolishing the rich?' And he said, 'No, I believe in abolishing the poor.'

I believe that every individual person should have the chance to realize their potential to the full. And I think at this point in our history, when we have taken a million children out of poverty, when we've doubled the expenditure per pupil in education, but we know that there is still a long way to go, and we know there are still far too many children, too many young people, left behind.

We need to do two things: we need to be clear about our ideological bearings, and we need to be quite precise about the new policies that are needed.

When I say ideological bearings, I think there is a huge debate about equality that's taking place in the country, in the Fabians in particular, but round the country. Equality of opportunity and fairness of outcome, is how I would describe what our policies are, and what they should be, trying to achieve. Equal opportunities for all, unfair privileges for no one. And I think when we have the debate about equality as the capability of people, the access of people to services, I think we should focus on what specific policy changes we need to make, to ensure that people are not disadvantaged by background, or by previous circumstances, from getting the opportunities that they need to realize their potential.

Now, in some cases, that will mean many chances, so instead of a first chance, and if you fail, you're out, that was the old 11-plus, that is something about of what happens when people leave school at 16, out of the education system, despite what we've tried to do, so many people never come back in, and education then becomes a life defining event at 11 or 16, a pass or fail, and if you're out, you're out forever. Now we've got to change that.

OK: Do you think we should raise the leaving age?

GB: I think the education leaving age is now a huge issue. Because the school leaving age at 16, and of course the school starting age through nursery education is now 3, so we've moved it from 3 to 16. Now I think we've got to look at how in full or part time education until the age of 18, everybody has something that they are offered. So if you take someone who goes to work, I think it is quite wrong that an employer gives nobody at 16 or 17 any training. We've got to ensure that that happens. And if you take people who are outside the education system at 16, they should have some training, and in many cases it's full time and in some cases it's part time. So the education leaving age should indeed be considered not at 16 but at 18. And then, we've gone from 3, when we started it was 4, from 3 to 18. But I would emphasise the importance of life long education as well, so that any adult at any time can come back into the education system, and there are multiple chances, many points of entry, and you can genuinely call it permanent education.

Now if we can do that in Britain, the message we are sending to the world, particularly to developing countries, about the importance of education as the means by which people have opportunities, is incredibly significant.

OK: I'm glad to hear you talking about giving people more than one opportunity to screw up their career. Excellent.

(laughter)

Right, we are also interested, people are very interested to hear what you are saying about a new style of politics, because there's a huge growing cynicism, there's a rejection of party politics, there's growing extremism, and what you've spoken about is the need to engage the talents of the wider community. But what exactly does that mean?

GB: Now what that means is, every problem that we face – now you've got group discussions this afternoon, one's on the environment, one's on security and foreign policy, one's on the economy and opportunity, and then there's ones on education and public services. If you think of every problem that we face, each one of them has one thing in common, none of these problems in this decade can be solved without the positive, practical involvement of people. If you take the environment, we cannot win the environmental issue unless there is personal and social responsibility, and therefore the engagement of people themselves in helping work with governments and international organizations in finding a solution.

If you take security, which is a huge issue now, I actually believe that what has been undervalued is the importance of winning hearts and minds. You will not solve the security issues we face, particularly in relation to terrorism, by policing, intelligence and security action, important as they are, and the job that our forces and security services does is really important and to be valued. But you will not solve that problem unless you can win the battle of hearts and minds. So you've got to engage people in the solution. There is no point in us failing to have that debate about what kind of Britain and what kind of world we want to see.

If you take the economic problem, I've just described it: unless people see the importance of acquiring skills for themselves, then we will just fall behind other countries. Unless people understand that their skills are the key to the future of the economy, and therefore they are practically engaged in making these changes that we need to bring about, then we will not succeed.

And then individual aspirations for public services, unless people are involved themselves in setting the agenda for public services, and feel they have control over them, we won't solve the problems. So, the new politics is not only the right thing to do, it is the essential way of dealing with the challenges for the future.

I was at a youth group earlier this week on Tuesday, and they were going round all the things that they were interested in doing, and this was a group that had been brought together from all round the country. But what really was fascinating is that when we talked about a youth budget, that they actually made the decisions themselves about the facilities, you could see them suddenly getting more interested in the debates about whether the money should go to sports, or whether it should go to youth workers, or to transport subsidies and everything else.

Then you talk about a Youth Mayor, which we've got in Lewisham, a Youth Parliament, then you talk about young people themselves being involved in all sorts of ways in running their own facilities and communities, and the debate starts to take a different perspective, young people start to be involved. And that's something that we could apply right across the board.

OK: But, but, but … Isn't it the case that people only feel you are engaging with them if you listen to them, and you can't give everyone a budget, so what are you actually going to do to make people feel that government is listening to them?

GB: Well, I see it as in three steps really. There is no doubt that the constitutional reform that we are discussing the day is back on the agenda. Every generation needs to have a new settlement, about the responsibilities and rights of the individual, how the community works as a community, and what is the role of the state. And I believe that we should think of the state as the servant state, the state serving people, and we should think about how we can engage and give more power to individuals and communities to run their own affairs.

I disagree entirely with the Conservatives' position, which is to say, give up on everything that government does and hand it back to charities. That is a nineteenth century answer, and it led to the chaos in health care, which led to, and had to lead to, the creation of the national health service, and to the creation of many of the institutions of the welfare state. But what we need is a better relationship between individual, community and state. The Executive therefore has got to be far more humble about the power that it has in future decades. Reform of Parliament to ensure that there is proper accountability is in my view on the agenda. The devolution to local bodies of greater responsibilities, including, for example, communities running and owning their own assets as communities - the community's right to buy assets. Equally of course, far better ways of consulting people, whether it be on anti-social behaviour issues, or on some of the big issues of our time for both the country and the world as well.

Now I think the discussion on that new constitutional settlement should begin. The second part of that is of course devolution, so that people have more say over their own affairs. And the third part is empowering people so that they actually feel as patients, and as parents, and as consumers but also as citizens in the community that they have more say over the affairs of their lives.

And I think that a vigorous debate, probably starting today with the discussions that you have, is one that can actually make a huge difference. I think we're recognizing that constitutional issues are not dry things, they are actually at the heart of what we mean about modern citizenship, the responsibilities that we have and the rights we are owed.

OK: Thanks for that, and I just want to reassure the audience at this point that I'm not going to hog all the questions.

So I've only got really one more in this tranche that I want to ask, which is about the thing that I feel most passionate about, international development, and security and a fairer world, with a fairer distribution of resources. And what I wanted to ask you about are the debt reduction policies you've had. I think everyone in this room would pay tribute to you for the phenomenal leadership that you've shown on this issue.

Again, the problem is that people feel that maybe Gleneagles was the high watermark. Maybe those problems aren't all going to be delivered on. What can you say to reassure people that that is not the case, and how will you personally progress this issue?

GB: I think on these issues, we've only just begun. We've only made a start on debt relief, and the whole set of changes that I think as a new deal between rich and poor countries is now the next stage of the agenda.

It's fifty years this year since Ghana became independent. And John Prescott is visiting Ghana and the Ghanian President is visiting Britain.

There's a great story: in 1957, Richard Nixon was Vice President of the United States of America, and he was sent to Ghana for the independence celebrations. And Nixon as you know was rather crass and gauche in the way that he dealt with people. And he so he thought he would be a populist, and he would go round the audience, and he started going round the audience and he said to these people, 'How does it feel to be free?' And he kept saying, 'How does it feel to be free?' How does it feel to be free? And then this guy said to him, how should I know, I come from Alabama.

(Laughter)

Now, the importance of this story is that civil rights have moved on in the United States of America, but the social and economic rights that people expected to come with independence and the end of colonialism, have not always emerged. And that means there is an absolutely huge agenda.

And it's actually, if you take Africa, it is actually a strategic as well as a moral issue. There are more Al chieda cells in Africa than in any part of the world. African immigration to Europe is a big, big issue – everybody knows that if there is no prosperity in Africa, they will move, and many will come into Europe. It is right at the centre of the environmental and climate change issues. China is now intervening in power politics in Africa. So, even if people didn't agree with you and me, that this was one of the great moral issues of our time, a stain on the soul of the world, it is also a major strategic issue.

Now, I think that the greatest gift that we could give, and it would be part of a new deal between rich and poor, is that every child has education in Africa. Twenty-two countries have submitted plans for education. I went with two young teenagers from a school in London, courtesy of Comic Relief, to launch the Education for All campaign, in Mozambique, with Nelson Mandela present, and Hilary Benn came as International Development Secretary. And it is very funny, Nelson Mandela greeted us and we were talking away, and then he said to Hillary, he said, 'How's Tony?' And Hillary said, 'He's 84, you know'.

(Laughter)

He said, he's just had his birthday.

And of course it's the first time that Tony Benn and Tony Blair have been mistaken.

But Nelson Mandela came out of retirement to launch the Education For All campaign. We are putting eight and a half billion pounds over the next ten years into it. There is going to be an international conference in March, organised through the European Union which is playing a big role here. And I believe that even bigger than Make Poverty History over the next few years could be a campaign in which school children themselves, because there are schools linking up with Africa, teachers, parents, churches, civil groups. They say it is not satisfactory that 80 million children are not going to go to school tomorrow. It is not satisfactory that they are in classrooms of 150 to one. We can do something about it. It only costs two pence per person per week in the richest countries of the world to do something about this, and we should make it our business that we are the first generation when every single child in the world is given a chance of schooling.

Now, that's the first campaign, and I think we can deliver that. The second is on health. It's possible now to abolish these dread diseases: tuberculosis, malaria, diphtheria, all these major diseases. The medical science is there, the technology is there. What we need is both the money and the political will. And we will be launching in the next couple of days what's called the Advanced Market Mechanism, where we, the richest countries, underpin the development of the drugs for the poorest countries, so that they now come in at affordable prices and therefore can be mass produced, and that would be a huge contribution that we could make to the development of Africa and the world. And as you may know, we launched only a few weeks ago, the vaccination facility, where five hundred million children will be vaccinated as a result of front-loading money that is provided by governments by ours, and the Gates Foundation, and ten million lives will be saved.

Now these are causes that people can link up to. The idea that we have lost our idealism after Gleneagles is just completely wrong. When you go to a school – I went to a school in Abuja, in Nigeria, and there were all these kids there.

And you ask them, what do you want to do? And they're saying, I want to be an engineer, I want to be a scientist, I want to be a doctor, I want to be a teacher.

None of them wanted to be a finance minister, by the way, or a politician. But they had these great ambitions, but you knew immediately, that there was no chance of them getting a secondary education, far less medical education or university education, under present circumstances. Now, this could be our great gift to the world in future years, a new deal between rich and poor countries that delivered health and education to the world, as part of a programme of economic development, and I believe that these are the campaigns that we should involve ourselves in over the next year.

(applause)

OK: Well, Gordon, you've outlined some of your vision there, and I know that members of the audience want to, well I shouldn't say take you to task on any of it, ask questions. I'm going to take four at a time, please be as brief as you can, and give your name first. The gentleman at the front, then the gentleman at the back, and then we'll go for a woman.

Question: Thank you. Chancellor, on the question of parliamentary reform, should we introduce proportional representation for the House of Commons?

OK: OK, thank you. And, the gentleman at the very back. Yep, oh sorry, I can't see – I was just saying what perfect eyesight I have, it's the only perfect thing I've got, but I can't see a thing. Yes, you, standing up.

Question: [Name unclear] Roberts, I'm a Human Rights Barrister. The Chancellor says, 'Privileges for No one'. Why has he not done more to remove tax relief for non-residents – i.e. the rich and especially the super rich?

OK: OK, and can I have the lady in the white T shirt.

Question: I'm an early years coordinator. The Chancellor has spoken about education, but he hasn't mentioned the early years. I just want to say that it does need a lot of support.

Question: Andrew Edwards. I just simply wondered, shouldn't the Bank of England be renamed, the United Kingdom Central Bank, to reflect better the work it does in the United Kingdom. Thank you.

GB: (laughs)

First of all, the Bank of England: we thought of that. And then we thought, when we were making the Bank of England independent, it has always been the Bank of Britain for the financial services regulation. It was better to leave the name and change the purpose and the most important thing was actually changing the purpose. And I'll tell you why making the Bank of England independent is so important. It is the message that we send that we are not going to be influenced simply by short term, partisan considerations when making our decisions. It is the long term and the future of the country that matters most. And I think that signal was sent, and you don't really need a change of name to do it. What you need is a change in the purpose of your economic policy, and since 1997, I think people have seen long term, that we take the right decisions in the British interests, and it has brought a degree of stability that we haven't seen before, in what used, as we may remember, under the Conservatives, to be the most stop-go, and unstable economy, for nearly twenty years under the Conservatives, and the worst two recessions. It is now the most stable economy. So, you're right, that it is the bank that covers the whole of Britain, but it was more important to us to change the purpose and perhaps some of the traditions of the Bank of England helped us as we persuaded people that this was the right change to make.

I was asked also then about loop holes in the taxation system. There's an interesting debate here because every time I do a Budget, there's a whole accountancy profession, public relations exercise, that complains about all the tax loop holes that we've closed down. If I may say so, when we started as a government, you could get tax relief for bribing an African country. You could actually put in on your tax form as a company that you'd paid a bribe and get tax relief. When we started off as a government, people were getting grants under the Business Enterprise Scheme, for starting up a chain of nightclubs. Under the grounds it was something to do with new investment in urban regeneration. And people were getting grants for training for doing executive golf courses, as a result of some of the Tory loopholes, and we closed that done, because basically, we wanted the money to go to real training, and not to executive perks. In every Budget, and I think you are referring to non-domiciles and non-residents, we have taken action on tax avoidance. And if it is not the most publicised thing about the Budget, I just tell you it is certainly very controversial.

One of the problems that you've got as Chancellor, is that every time you look round, someone has invented a new loophole, someone has been using the law in a particularly difficult way, and you've got to keep closing it down, and we will keep looking at tax loopholes which mean that people are paying an unfair share of taxation.

And then I go onto the constitutional issues. It is true to say that the Labour Party in Scotland in 1918 had three distinctive positions. One was Home Rule for Scotland, the second was proportional representation, and the third was prohibition of alcohol.

(laughter)

Now, they've only achieved one in a hundred years. The issue, however, for me, about the constitution, does not start with the reform of the electoral system. It starts with reforming the relationship between the executive, the legislature and the people. And I think when we look at the constitution, at the heart of the questioning future is can the executive be persuaded to give up power, both to Parliament and the people, in such a way, that you can actually have a participative democracy at work? So, the debate on PR will continue, and it is right that it does so. You have forms of proportional representation in Scotland, Wales, Northern Ireland and for the European elections. If there were to be reform of the House of Lords that involved electing people no doubt that too would also be on the agenda. But I just say, when we are discussing the constitution, at the heart of the issue about trust, about disengagement, about the overpowerful state that some people talk about in some instances, is that we get right the relationship – Let me give you an example: peace and war. I've said that I don't see, that unless there were emergency situations I can't conceive of a situation where under our constitution the government should not have Parliamentary approval before these major decisions are made. I think that you could apply that across the board: you could look at patronage that still exists with the executive, and look at how that could be made more accountable to Parliament. And if you look across the board also at some of the civil liberties issues, I do think that for example, on national identity cards or the 28 days, more Parliamentary accountability is needed to assure the people that there is no arbitrariness in the way that the executive exercises power.

So I'm saying that the PR debate should continue, it must continue, but at the heart of the constitutional issue is this huge question about how in a modern democracy, people themselves feel properly that they are in the driving seat.

OK: And Gordon, I'm sorry to pick you up on this, but I want to hear about Early Years. It's things that women campaigned for, you see.

GB: Early Years is probably the issue of which I feel proudest about what the government has started to achieve, and feel determined that we have got to do more to achieve. If you think about the welfare state after 1945, there was no provision made for under fives: mothers were expected to take full responsibility, childcare was ignored, maternity leave was very patchy, at the same time there was no provision for nursery education as a right. And what has happened in the last ten years under a Labour government: nursery education now from three years old; Sure Start, there will be 3,500 centres around the country for 0 to 4 year olds; maternity pay and maternity leave, and indeed paternity pay, has increased; and that in my view is only the start of the agenda that is necessary. Why? Because as I know the questioner will be thinking, and knowing, that we now know, and I know it as the father of a young child, that the earliest months of a child's life are so important. Fail there, and you've got a huge amount to do to catch up. And therefore the investment that we need to make in nursery education, increasing the number of hours, increasing the range; Sure Start – increasing the range of facilities available; parents – new rights and new opportunities that they want; maternity leave, being moved upwards – it's going to go to nine months in the next few weeks. All these changes are absolutely important because the early years are the key to future years, and we know now that to be left behind before the age of five is unacceptable. So I think you can see that that is a central part of the educational agenda moving forward, but it is also a central part in how we support parents in the very difficult decisions that they make. And I see us being able to say at the end of a long period of Labour government running long into the future that this is one of the great changes that we have made. We have transformed opportunities for both young children and parents for these early years.

OK: Yeah, and I honestly think early years is one of the most radical policies this government has had. And I know that I only picked one woman out of four questioners, so I'm going to try to pick some more women. And while applauding the government on this, Gordon, can we remember the women who have campaigned on this, Harriet Harman, Joan Ruddock and Patricia Hewitt. The women often get left out, and we want to try and make sure that they get heard. So, some women please. The woman there – yes.

Question: Rosamund McCarthey, I'm a charities and social enterprise lawyer. You seem to dismiss the role that charities and social enterprises can play in the delivery of public services. I wonder if you can comment on this a little bit more, given that the government has set up the office of the Third Sector, and is promoting innovation that these kinds of organisations can bring to the public services.

OK: OK, and the woman in the white scarf.

Question: It's about the cuts to adult education, and how we can enable adults to participate in permenant and lifelong learning, when we have had a very large amounts of cuts in adult education generally, and particularly to very vulnerable ESOL learners, who have now lost the right to free classes, and I wondered what we were going to do about that.

OK: OK, the gentleman with the white paper.

Question: I work with children in Tower Hamlets, in schools, and my question is, what is the government going to do to promote the full implementation of the UN Convention on the Rights of the Child.

OK: If people didn't hear that, that was about implementing the UN Convention on the Rights of the Child. And the lady at the very back of the room.

Question: My name is Emma Burnell and I'm from SERA. You talked about personal responsibility in terms of the environment, and I think you are absolutely right, we all have a role to play, but we all have a role to play, and that includes both government and business. And I'd like to see some leadership in terms of regulation, particularly in terms of how we're going to build 100,000 new homes over the next ten years. So I'd like you to comment on that please.

GB: Start with the environment. In my view, economic and social policy after 1945, was about economic justice and full employment. Now, there is no economic policy in the world that can't be about economic progress, social justice and environmental care and protection. So the old assumptions about environmental policy have gone. The environment is now abolustley at the heart of what we've got to achieve as a government. Not just in ecological and environmental and energy policy, but economic policy as a whole. And when I asked Nick Stern to do the report, it was my intention that as a result of the report, we move the environmental issues right to the mainstream of economic and social policy for the future. And the way that we will make the changes that you were talking about – and you were talking about regulation in relation to housing, where we are now saying that we will have carbon free homes within ten years, we will have stamp duty exceptions for people who buy and build them, and we are now putting in building regulation which ensures that energy efficiency required of the homes being built now is forty per cent better than before. That I think emphasises that the way we will deal with environmental issues in the future, and that's why individual responsibility is crucial, yes, we will need new public investment and we will need it at a worldwide level. That's why I'm going to India next week, and we're proposing a World Bank facility of twenty billion dollars that will allow the poorest countries to invest in energy efficiency and alternative sources of energy. Yes, we will also need new market mechanisms. Carbon trading, I think we could probably lead the world in carbon trading, and Europe can lead the world in carbon trading, and that is a mechanism by which we can get a price for carbon, people know the cost of what they are doing, and then they trade around the cost in such a way that we can meet the targets that have been set on carbon emissions.

Then there is the issue of the personal and social responsibility of individuals, and there is the issue also of science and technological advancement. We're creating in Britain – there was lot about the decision in the Pre Budget Report – the first energy and environmental institute. That research has been undervalued compared to medical research and IT research in previous years. There is a billion pounds going into that, with a joint public private partnership to do that. And then there is this area that I think you were talking about also about personal incentives through the taxation system, either incentives to do something that is good, or disincentives through taxing it not to do something that is bad. And of course we've had air passenger duty and all the other changes that we've brought about. And in the future I think we've got to look at our environmental policy as marrying personal responsibility but also with the recognition that with 2 per cent of the world's emissions, we cannot succeed without international action. Now, why I think the Conservatives are so completely wrong on the environment, is that you cannot solve the climate change problem by Euro-scepticism. You've got to cooperate with Europe, with carbon trading agreements, and with environmental action,

(applause)

I believe that the case for European Union and European action around environmental action is one of the strongest and we should be putting it every day. And you cannot solve the environmental problem without international action as well. And the Conservative Party that walks away from the international organisations necessary for it, like the World Bank, is making a huge mistake, because unless we can bring on board India, China and other countries, we will not get the climate change changes that we want to see. So it is the marrying of individual and social responsibility with the new public investments that we will make as a government, and you will see more coming from David Miliband and other work that is being done in the next few months, and also the international cooperation that shows we are an interdependent world.

John Kennedy again said in 1960 the age of independence was over, and the age of interdependence had begun. And that is where we are. If the age of interdependence means anything, it means international, European cooperation on the environment, and we are determined to move that forward whether in relation to India, where I'm going next week, and Nick Stern is coming with me to do this, or whether it is in relation to European cooperation and integration.

Now, the second set of questions were around the issue of charities. I believe that charities, charitable work, voluntary organisations, community action, are at the heart of British society, so please do not misunderstand. What I do not believe that you can substitute what are the legitimate responsibilities of government, where we have got a duty to take action, and say hand it over, and let if you like charities just get on with it, without the resources to do so, and without the support of the government to make that happen. And I do believe that those people who want to privatise some of the things that government is doing and hand them over, is the wrong position – and this is the Conservative position – is the wrong position. What you need is a partnership between charities and government. If you take carers, there is not one carer that is asking government to do less, but they actually want us to be in a proper partnership with them. If you take most of the charities that we are talking about, they want us to work together with them to solve the very real problems of drugs and teenage vandalism and everything else that charities are involved in. I believe that what Beveridge called the driving power of social conscience is at the heart of what makes people join charitable work, join political parties, join movements for change in our society. You can call it the moral sense, you can call it enlightened man, you can call it the better angels of our nature, you can call it the soul that people have, the conscience that people have. But that's what makes people want to change society.

And I believe that what we are seeing around the country, and I think you said that you were a social enterprise lawyer, it social enterprise, corporate social responsibility, community action, environmental action, all these things coming together. You could call it the Good Society movement that is taking place in our country, and it is our duty and the right thing to do, to back the work that is being done by charities, community action, and so many different bodies. When I go round the country now, I insist on wanting to meet voluntary organisations that are involved in really innovative things, and we learn from the innovative things that are being done by charities and voluntary organisations.

Now the next question, very briefly, on adult education. I want to see for adults the equivalent for non-university education of what the open university was able to offer. And I believe that we can achieve that over time. The reason that people are raising the issue of funding at the moment is that we made it our priority that under 25s get resources to enable them to get the first qualification, and that's why the priority for resources over the next period was to ensure that every person under the age of 25 had a qualification. But that's not to neglect adult education for the long term. I believe that you cannot have a society where we talk about lifelong education unless we support that for the future, and we're determined to do so.

The UN Convention on the Rights of the Child: this is the 200th anniversary this year of the abolition of slavery. We should at least in 2007 make it impossible for there to be child labour in so many parts of the world where children are exploited. One of the things that I want to see coming out of the debate and the celebration of the abolition of the slave trade is that people are more and more determined that child labour is abolished, that young children are able to go to school, and that all the horrors that are inflicted on children, from child prostitution to children being teenage soldiers, are not only exposed, but internationally we start properly to deal with them, as a result of the UN commitments that we've all made.

(applause)

OK: Right, we've only got time for one more round, so I'm going to be deeply unpopular here. Could I have the gentleman with the checked shirt – yes, yes, that's you with the white hair - although there are a lot of gentlemen here with white hair. (laughter)

Question: Andrew Davis, community worker, and I hope we're not slipping into a Labour Party Conference. I think this should be a Fabian Conference about new thinking. I've heard you talk over the years about young people achieving their potential, and you've talked about engaging the public. It's my belief that the government has shown very little knowledge about how this can be achieved. Do you think that you should be prepared to go back to school to learn how it is that young people can achieve their potential and how we can engage the interests of the public?

OK: OK, can I take a question over there from Sunder.

Question: Sunder Katwala of the Fabian Society. Chancellor, last year this conference was dedicated to the theme of Britishness, and there was a great deal of response to that. People are asking what practical agenda that will lead to in the future. I know that you've been writing this morning about the importance of defending the Union with Scotland against Scottish Nationalists but also against some arguments against Englishness from the Conservatives. But I also wonder whether Britishness will be an important part of your mission on education and international issues and on democratic engagement and trust itself.

Question: Hi there, my name's Mike Smith and I'm a director of the National Centre for Independent Living. In Scotland we have free social care provision, yet in England over the last five to ten years we've had increasing cuts in the budgets for local authorities which has meant that social services have had to cut their spending on provision for disabled people in general. You were talking about social justice, but in America the American Disabilities Acts provided probably one of the greatest booms to the GDP of the country over the nineties, and yet we're limiting the choices for disabled people in this country by not giving the adequate support they need to live a full and prosperous life.

OK: Thank you Mike for that question on independent living for disabled people. The lady with the glasses up the front.

Question: I'm a Labour councillor in the London Borough of Barnet. Firstly I'd like to congratulate you for what the Labour government has done in my ward, which is one of the most deprived wards. Apart from putting four million pounds into building a new primary school, Sure Start, doing all this extra work for us. Can you please assure us that when you become Prime Minister, which I hope you will, because they you can continue with this investment in housing, decent homes standards, which have actually seen improvement. And then there will not then be need for Ministers to take their children out to pay for 15,000 pound schools, which over 60 per cent of the people in my ward don't even earn, they don't even have annual income of 15,000. So can you please assure us that you will do all that.

(applause)

OK: Right, I'm going to end with that round, because Gordon, I want to ask you a question about your personality.

(laughter)

You always come across as being very serious. Reliable and dependable, it's true, but you know, very, very serious. And people don't always want to be serious all the time. And you know, in a trivial, celebrity obsessed world, you, Gordon Brown, cannot match David Cameron for being lightweight and fluffy. Do you recognise that this is a problem?

(laughter and applause)

GB: Well, I have got my fitness video coming out next week.

(laughter)

There is a story that Mark Twain went to Nevada when he was very young and he had lived a very Presbyterian background before he went to this frontier town. And then he got to this frontier town, and he found gambling, he found sex and prostitution, drinking, and he said , 'I soon realised that this was no place for a Puritan … and so I did not remain one long'.

(laughter)

And I'm not going to do something that I'm not, simply to get attention. I think celebrity actually in the modern world is seen as just like someone who gets into a room, looks around the room, and says, 'Well what do people want me to be, and I'll tell them that'. Whereas I think personality and character is really, you go in a room, you say, I have values and I believe in these things, and I'm going to tell you and debate with you what these are about. So you listen and you hear, but you actually say that you stand for something which you think is important.

Take the example of Britain that Sunder has just raised, you know they say of Britain that the first five hundred years of any institution is always the most difficult. So it's hardly surprising that after three hundred years there are still some teething problems in relation to the Union between Scotland and England. But what I think is very important to recognise, and I think we did when we had this conference here last year, is that Britishness, and Britain itself, is not based on ethnicity and race. It is not founded on race or on a cricket test. It is founded on the shared values that we hold in common. And I think if you look back in our history at these shared values that have developed and evolved over centuries, it is a commitment to liberty for all, it's a commitment – and that's why it's relevant when talking about charities and social enterprises to talk about social responsibility shown by all – and it's a commitment to fairness to all. And I think sometimes we allowed America to run away with the idea that it is the country of liberty, but actually the idea that arbitrary power should never be exercised by our rulers was developed in Britain, and it was a British idea that there should be liberty for all. And I think therefore we have something which is a model for the rest of the world for the future. If we have got many nations living in one island, and they are able to live together not purely because they are just contiguous but because they share the same values, and they have been proved so over a period of years, then in a world which is interdependent and globalised, when people of different nationalities will be living side by side and closer to each other in the future, then the idea that you can build your relationships and your community around shared values is very important. And I do sense that there is now a dividing line in Britain between the Labour government and many, many sensible people who believe that we should stress what unites us rather than divides us, and believes that our constitution and our civil liberties and the future of our society should be founded on shared values of liberty and democracy and fairness and social responsibility shown by all. And then an opportunist group of nationalists, and what used to be the old unionist party, that are prepared to play fast and loose with the Union. English votes for English laws, for example, is a recipe for the executive, that is the government, drawing its authority from two different kinds of Parliament, and that would push the Union apart and make it impossible for Britain to hold together. And I just want to emphasise that the dividing line is increasingly between those of us who are prepared to support shared values of the Union and the shared institutions that we brought about, and those who are prepared to play fast and loose with the Union and are prepared to put the whole future of the Union at risk. Now, together we've not only created national health services and welfare states and fought fascism in the 1940s, but we're also in international development leading the world because these shared values are being applied to the international policies that we are pursuing. And I think that these shared values are the guide to the next stage of constitutional development in this country, the protection and advancement of civil liberties and building a society where people feel of all races, and people of all communities feel that they have a major role to play, and we welcome their engagement in this country.

And this leads me on to the two questions, one about independent living and one about education. You show the nature of your country by the decisions that you are prepared to make. We had two councillors speaking here about the problems that they face. And I do understand the problems in financing education and the challenges in financing independent living. Some of you may have heard me say that when I started of in politics first of all as a student, a trade union leader came to me and he said, would you like to stand for Edinborough Council? And I said, 'Look, I don't know much about council taxation or anything like that'. And you may think that I still don't know much about it when I'm making decisions as Chancellor. And he said, 'Look, pal, if we were going to win this seat on the Council elections, you wouldn't be the candidate'.

(laughter)

And that put me in my place. But I understand the difficult job that councillors face. On independent living and what we're doing for disability, I think one of the big breakthroughs, and John Hutton is leading this, is getting more people who have been on incapacity benefit back into work, giving them therefore a higher income. We've made tax credit arrangements specifically for people who are trying as disabled people to get new opportunities. And I'm aware that this is an issue and I'm very happy to talk to you about it at the end.

But equally on housing and the cost of housing, the expansion of housing in future years, and affordable housing is a priority for us. I think it is unacceptable that not enough houses are being built for people who need them, and therefore the cost of housing is too high, and we're making major changes to ensure that there is an adequate supply of affordable housing.

On education, I was asked would I go into schools. What I've been trying to do as Chancellor over the last couple of years is to get into schools and Sure Start Centres and nursery schools and colleges and just listen to what people are saying. I met a headmistress who told me that in her primary school, only seven people over thirty five years had ever gone to secondary school who had then gone to university. So only a fraction of thousands of pupils from that mining area had ever gone to university. That's what I mean about being concerned about young people being left behind and we've got to do more.

And then I was speaking to someone else who said that they'd been at a school prize giving, and for the first time a very young guy from a very underprivileged background was given a certificate, and for the first time he'd been given a certificate for being the most improved pupil in the school. And then for the first time the mother, the single parent – she was a single parent turned up at the school, she'd never been there for a parents' night at all, but she turned up at the school to see her son getting this prize. And he did come from a very poor background

And then a few weeks later, someone from the school were visiting that parent at the home. And there was hardly any furniture that was good furniture, and hardly any decorations in the house, but right at the centre of the mantelpiece was that one certificate, and that lady said, I'm never going to allow my child to fail again.

So when we think about what the power of education is to help people realise their potential, and what we can do to help people who have been left behind to make sure that they can make their contribution. If we say that the future of this country, the prosperity of the country, does indeed depends on the talents of each, we must make sure that everybody, everybody, not just some but everybody – that's the difference between us and the Conservatives – has the chance to make the most of their talents and fulfil their potential. And I think that building an education policy around that, from the under fives right through to adult education and university education, being about opportunity and challenging people to fulfil their potential, that is not just a mission for this country, it defines the sort of society that we want to be, a society where I believe that the Fabians, who right from the beginning, in the 1880s, were concerned about educational opportunities, people being able to fulfil their potential, would be proud that today, in 2007, are discussing how everybody in the next decades can realise their potential to the full. And I fully intend to work with you in the groups that you are involved in, to create more life chances and equality of opportunity, that's backed by a fairness in outcome for people in the future.

Thank you very much.

(Applause)

Thank you very much. Thank you.

(Applause)

OK: So there you have it. If you want celebrity and glitz, Gordon is not your man. If you want economic stability and social justice, then he is. Apparently he is not going to be hiring as his new economic advisor Jade Goody. Actually, I'm really glad that some Fabian members, and possibly Gordon himself, obviously don't know who Jade Goody is. And that gives me hope for the future.

If listening to Gordon this morning gives you hope for the future, please can you just once more give Gordon the round of applause he deserves. Gordon Brown.

(Applause)

GB: Thank you