It is a pleasure to be here in Dublin. I want to begin by paying tribute to the tireless work of Graham Watson as ELDR President and to the whole ELDR team for making this Congress possible. And I hope to be able to welcome to you to the 2013 ELDR Congress in London. I also want to say a big thank you to Micheál Martin and Fianna Fail for their excellent hospitality and for making sure that that this Congress will, I have no doubt, be a real success. And I would like to congratulate Mark Rutte and the VVD on their recent election results. I know Mark couldn't make it today but he and I have been good friends for some time and it's great to see him and his VVD colleagues back where they deserve to be - in government.

Congress, I am particularly pleased to be here today, because it is my strong conviction that it is at times of great turmoil that Europe needs liberals the most. In the middle of the 20th Century those who came before us took a continent scarred by war, a place of great uncertainty, fear and hardship, and set about building a continent whose citizens would live together in peace, work together in mutual respect, and grow together in shared prosperity. Whatever the challenges that face the European Union, our nation states and our shared institutions, it is liberals who will make sure we always rise to those challenges.

Europe needs liberals now more than ever. The shared challenges we face are ones that can only be tackled when like-minded people across Europe work together: how to create jobs, particularly for our young people, and bring back prosperity; how to tackle climate change and build the new, green economies we need for our future; and how to keep our citizens safe in an uncertain and fast changing world. Those at home and abroad who want us to pull up our drawbridges and remove ourselves from the outside world, to cut us off and go it alone, cannot rise to those challenges. We must remain open, outward-looking and optimistic. Pulling together, not falling apart.

I haven't come here to rehash the arguments we all know too well about the future of the Eurozone, about the budget or the bailouts. At a time of great division in Europe I want to talk about the things that unite us: as people; as nations; and as liberals. Europe needs liberals now more than ever because it is only with agreement, co-operation and shared priorities that we will rise to these challenges.

YOUTH UNEMPLOYMENT

Liberals have always played a key role in challenging consensus, pushing for change and coming up with new, radical thinking. One of the gravest threats to the long-term future of our economies and societies is youth unemployment. Millions of young people across Europe are leaving education and finding either that there are no jobs, or that employers who are hiring are not prepared to take a chance on them. True, the rates of youth unemployment vary across Europe, but the underlying problem is one that is facing every single country in the Western world. Here in Ireland, almost one in three young people is unemployed. In the UK, we have a million young people not in work, education or training.

Youth unemployment is not only an economic tragedy, it is a slow burning social disaster. Research shows that the more time you spend unemployed when you are young the worse you will do over your working life. It crushes the hope of young people who send out application after application but rarely ever receive a reply let alone an interview. And it means businesses miss out on the enthusiasm, innovation and productivity of a generation.

Liberals believe fundamentally in spreading freedom and opportunity. But there is no quick fix or silver bullet. And no one country can claim to have all the answers. So we need to learn from each other. That's why next week I am travelling to France to discuss youth unemployment with the Prime Minister, Jean-Marc Ayrault. And it's why much of what we are doing in the United Kingdom is influenced by colleagues overseas.

In the UK, Liberal Democrats are leading the way in tackling youth unemployment. Because we understand the importance of equipping our young people with the skills they need to thrive we are overseeing a massive expansion of apprenticeships. But it would be wrong for us to pretend that we are taking on these problems without benefiting from the experiences and ideas of our fellow liberals and neighbours.

For example, in the UK, and despite the pressures on budgets, we have developed a £1bn Youth Contract, which will provide nearly half-a-million new opportunities for 18-24 year olds. Targeted job subsidies for employers who will give young people a chance, much like those that operate in Belgium and Netherlands. New work experience placements to break the cycle of joblessness, like those we see across Sweden, Finland and Denmark. And a new programme to help the most disengaged 16 and 17 year olds - getting them back to school or college, onto an apprenticeship or into a job with training. In fact, our apprenticeship scheme unashamedly seeks to emulate the phenomenal success of Germany's long-standing apprenticeship schemes. The pool of radical ideas and new thinking is vast when we choose to look beyond our national borders. And I am delighted to see much of this radical thinking being done here in Ireland by our hosts Fianna Fail. Encouraging entrepreneurship. Expanding the national internship service. And giving new support to train young Irish people in the skills they need to succeed.

Europe needs liberals because we believe fundamentally in spreading freedom and opportunity, and too many of our young people have too little of both. As we rebuild our economies we must make sure the skills and livelihoods of our young people are put at the top of our priorities.

GROWTH

Europe needs liberals because we understand the way the world is changing. Globalisation and the information revolution have transformed the way we communicate and do business. They have spread democracy and empowered parts of the world to grow at remarkable rates. And they have helped fuel the great rise of the emerging powers whose economic and political might grows daily. Liberals know that we in Europe must adapt to this modern world with openness as our watchword. We are open minded internationalists.

Where other politicians see risk, we liberals see potential. Where other parties see threats, we liberals see opportunity. The opportunity to spread prosperity by completing the single market in services and digital, unlocking over €4,000 in extra income for every European household; the huge growth potential for Europe to lead the world in research and development and high tech industries, by unlocking investment and venture capital for our innovators and through agreeing a new EU-wide patent; and the chance for us to use our collective weight to drive forward free trade agreements for the benefit of European businesses and consumers. Deals like the recent EU-South Korea Free Trade Agreement that, in just one year, has increased European exports by €1.7bn; or game-changing deals with some of the biggest markets in the world, such as Japan and the United States.

In fact, if the EU can complete all of its current free trade agreements with third countries, it would permanently add more than 2% to the EU's GDP or some €275 billion annually, and create more than 2m new jobs. I would like to pay particular tribute to our friends in the European Commission for keeping the single market and free trade agenda moving forward, and urge them to keep it up, to go further and to go faster.

GREEN AGENDA

When it comes to understanding how the world is changing, there can be no clearer example than climate change. Some people say that at times of hardship and economic uncertainty we cannot afford to care about the environment. It is a foolish and dangerous argument. Climate change is no less a threat to us when times are tough. If we shrink from the task of cutting our emissions then our legacy to our children and grandchildren will be disaster. If we want our children and grandchildren to live in peace and prosperity then we must act now and act decisively before it is too late. So we must tackle climate change now with the same urgency, if not more, than we have in the past.

Europe needs liberals because we understand that the only way we can tackle a problem of this scale is by working together, leading by example and pooling our resources. But Europe needs liberals not just because we understand the urgency of the challenge but because we see the opportunity it presents. We are all looking for ways to get our economies growing and ways to create jobs that last. The green goods and services market is a key part of the answer. It is one of the fastest growing sectors in the world, worth over €4trillion today, and all the projections are that it will grow and grow at an increasing rate.

I'm proud that companies in Britain, including in South Yorkshire where I am an MP, are at the cutting edge of green innovation. In the UK, the Liberal Democrats in Government are expanding our renewables sector. Rolling out a massive programme of energy efficiency in our homes and businesses. And creating a revolutionary Green Investment Bank. An idea developed by Liberal Democrats, put in our manifesto, argued for in our coalition negotiations and being delivered by a Liberal Democrat Secretary of State.

At the European level, we liberals must come together to ensure that Europe taps into the huge potential of green jobs in this area. Through driving forward new ambitious emissions targets. Through implementing in full the Commission's Low Carbon Roadmap. And through investing in low carbon energy infrastructure to develop a European supergrid, linking up our countries to enjoy efficient, clean and secure energy, just like the exciting ideas for interconnecting Britain and Ireland, so that excess wind energy in Ireland can be transported and used in the UK.

There is so much to do to deliver a full low carbon energy transformation, to unlock millions of green jobs and to establish thousands of world leading clean tech businesses, and it is Europe's liberals who must be bold, ambitious and radical to make sure this become a reality.

SECURITY AND JUSTICE

As liberals we also understand the importance of working together to keep our citizens safe in a dangerous and uncertain world. The UK and Ireland, two nations with a shared land border, are painfully aware of the value of cross-border co-operation on policing and security. We all know that cross border crime and terrorism is a major threat to us as individuals, as nations and as a European community. And we know that when crime crosses borders, justice should too.

So together we have built the world's most advanced system for cross-border police and justice co-operation. Co-operation that in 2010 cracked open a pan-European human trafficking network, rescuing over 180 children; that last year broke up the world's largest online paedophile ring, freeing over 200 children who were being systematically abused; that, as we speak, is investigating hundreds of serious and organised international crimes, like the recent and tragic murder of a British family in Annecy, in France.

There is a live debate in the UK on the level of UK involvement in European police and justice measures. The Government has said our current thinking is to opt out of these measures en masse, before seeking to rejoin those measures which are important to our safety and security. It's true that some of the measures may be old, out of date or defunct. And yes, some need improvement. But I want to be absolutely clear: a final decision has not been taken, and the Liberal Democrats will only agree to doing that if I am satisfied we can opt back in to the measures needed to protect British citizens. Liberal Democrats in the UK's Coalition Government, like liberals across Europe, understand that we are all safer when we work together.

CONCLUSION

So as we face this array of economic, environmental and security challenges, it is fitting that the ELDR Congress should be held here in Dublin. As Ireland prepares to take on the presidency of the European Union, there can be no doubt its economy is coming back. All the indications point to this: growth in exports and in agriculture; a well-educated young population; continued investment from the technological industry; a country gaining increasing confidence from the financial markets due to its strong implementation of EU and IMF-supported programmes.

But there is a long way to go for all of us. European countries can't deal with these major challenges - growth, jobs and youth unemployment, climate change and security - by themselves. Europe needs liberals because we understand that the challenges that face us all right now require a collective, liberal response. Europe needs liberals because we understand that it is only by spreading freedom and opportunity that we will thrive as individuals, as nations and as a continent. Europe needs liberals because we understand that all of us are richer, greener and safer when we stand together, and that we are all weaker when we stand apart.

Pulling out all the stops

The party is pulling out all the stops in the last few days of campaigning before next Thursday's big polling day, and candidates need your help to deliver some good results.

On 15th November there will be three Parliamentary by-elections, a City Mayoral Poll in Bristol and voting will also take place for the new Police and Crime Commissioners.

"Liberal Democrats support the living wage and we commend those employers who have introduced it.

"Instead of asking employers to take on this burden, Liberal Democrats are focusing on making sure people keep as much of the money they earn as possible. That's why in the Coalition Government, we have cut income tax for people on low and middle incomes. By 2015 tens of millions of people will have had a £700 Income Tax cut and millions more will be taken out of paying tax altogether.

"Those changes mean that someone working full time on the minimum wage will see their income tax bill cut in half, but the Liberal Democrats want to go further. Our policy is for nobody to pay any income tax until they earn more than the minimum wage.

"That's real help delivered by Liberal Democrats compared to a Labour Party that raised taxes on working people by abolishing the 10p tax rate and left the economy in a mess for others to clear up."

More cities free for growth


The Deputy Prime Minister announced this week that 20 more cities and their wider areas will be given the opportunity to bid for radical new powers to boost local growth under the 'City Deals' programme.

Cities from the successful first wave of deals, with England's

eight largest cities, secured groundbreaking powers including the ability to 'earn back' tax from the Treasury, devolved transport budgets and control of the skills budget for their city.

The second group includes: the Black Country; Bournemouth; Brighton and Hove; Hull and Humber; Ipswich; Leicester and Leicestershire; Greater Norwich; Oxford; Reading; Plymouth; Southampton and Portsmouth; Stoke and Staffordshire; Sunderland and the North East; Swindon and Wiltshire and the Tees Valley.

"In the best English tradition we have witnessed a quiet revolution across the nation's eight largest cities," said Nick. "From control over buses and trains and the freedom to plug skills gaps, to powers to 'earn back' tax and

set up local investment funds to spend on local projects - the deals are unlocking the huge potential of our cities so they can go for growth.

"Now it's time to free even more places from Whitehall control. I want these 20 cities and their wider areas to come up with ambitious and innovative proposals to help them make changes that will be felt by everyone across their region."

City Deals are a key part of the government's objectives of rebalancing the economy and boosting private sector growth. The Deals will accelerate the pace of decentralisation and unlock new and innovative ways to drive growth.

MP Julian Huppert has welcomed the chance for Cambridge - was one of the cities announced this week - to bid for more government funding. "This is an excellent opportunity for Cambridge to demonstrate what it is capable of - freeing us to do what we want with less interference from Whitehall," he said.

"Cambridge has always struggled because of the lack of government funding for major infrastructure. Despite this, the City has proved it is one of the strongest economic centres in the UK; but it could do so much more with the right financial support. If our bid is successful, it will open up a whole range of new opportunities for our City; the possibilities are endless," added Julian.

This autumn, the great debate on Britain's role in Europe has, as ever, generated a lot of heat yet little light.

We want to be in, we want to be out;
We want to repatriate powers, use our veto, keep our pint, save our pound, protect our strongest export market...
Be critical of Germany, not end up like Greece, feel proud of our role in creating peace in Europe, yet cynical about an acronym winning the Nobel Prize.
And just last night, in a House of Commons debate on the European Budget, we saw Europe turned into a political football as political opportunists sought to score a political point.

But when it comes down to it, there is a serious debate to be had...
And we do have some serious decisions to make.

In Europe today, there are effectively three places you can be.
They fit together like rings around a circle.

There's the core:
Where the Eurozone countries are now pulling together more closely;
Integrating further to shore up the single currency.

Then there is the ring around that - the inner circle:
The states who aren't in the euro, but are members of the EU.

And the outer circle:
Where you find the accession countries, EEA countries, Norway, Switzerland, and so on.

The UK is in the inner circle - but the terrain is shifting.
The core is tightening - to what degree we don't yet know.
Some states on the outside are seeking, over time, to head further in.
And, as a different Europe emerges, over the coming years...
We have to decide where the UK fits within it.
What role will we play in our new neighbourhood?

Very few people are now suggesting we move into the centre.
Joining the Euro will not be in our interests anytime soon - certainly not in my political lifetime.

But there are forces who want to pull us towards the edge;
Towards the outer circle.
Reducing the extent to which we cooperate on the continent;
Happy for the Channel to widen.
Hoping, even, that it becomes a gulf.

Today I want to explain why that is a very dangerous position...
Leaving the UK isolated and marginalised.
And I want to offer a more compelling alternative:
A strong UK, influential in Europe and so more influential in the world;
Working with our allies on the issues that matter to our prosperity and security;
Driven by pragmatism, as opposed to dogma, in these debates.
Unambiguously in the inner circle.

That will require an approach that is engaged and balanced.
So not accepting every request or regulation sent from Brussels.
But, equally, cooperating constructively where it is in our national interest to do so.

Iin our immediate future, that means three things:
One: a tough EU Budget settlement.
Two: defending and deepening the Single Market - and our place in it - for the sake of growth and jobs.
Three: taking the decisions on law and order cooperation that will keep British citizens safe.

The Europe debate will continue to run and run, as the Eurozone integrates further - that is certain.
And in the UK we will find ourselves talking about it, thinking about it, arguing about it frequently over the coming years.
But right here, right now the UK's priorities can be easily summed up:
Tough on the money; more jobs; more criminals behind bars.


Before I turn to those, I want to focus on the proposal doing the rounds that...
The best way to improve the UK's position in Europe...
Is to renegotiate the terms of our relationship with the rest of the EU.
We should opt out of the bad bits;
Stay opted in to the good bits;
And the way to do that is a repatriation of British powers.

That seems very reasonable; in fact, it's a pretty seductive offer - who would disagree with that?

But, look a little closer:
Because a grand, unilateral repatriation of powers might sound appealing...
But, in reality, it is a false promise, wrapped in a Union Jack.

Let me explain why.

I am all for reducing frivolous and expensive European rules.
At the weekend we heard stories about proposals to regulate the shoes and jewellery British hairdressers wear.
That kind of thing is clearly too much.
Having worked at the heart of the EU, I can certainly give you some more examples.

And, more profoundly, we need to refocus the EU...
So it does more where it adds value, and less where it doesn't.
I'm very proud of this Government's track record in working with our European partners to do that.
Whether that's reducing EU red tape for small business;
Or securing agreement on a European Patent after 23 years of negotiation;
Or getting long overdue agreement to devolve powers over fisheries policies.
But there is a lot more we need to do to get the Europe focused on the policies that create economic growth and make it more competitive.
And I want the UK leading that.

So I do not think the EU is perfect by any stretch and I'm a big advocate of EU reform.
But this idea that we should - or could - extract ourselves from the bulk of EU obligations is nonsensical.
It is wishful thinking to suggest we could - effectively - give ourselves a free pass to undercut the Single Market...
Only to then renegotiate our way back in to the laws that suit us.
The rest of Europe simply wouldn't have it.

What kind of club gives you a full pass, with all the perks...
But doesn't expect you to pay the full membership fee or abide by all the rules?
If anyone else tried to do it...
If the French tried to duck out of the rules on the environment or consumer protection...
If the Germans tried to opt out of their obligations on competition and the single market...
We would stop them - and rightly so.

And let's be honest:
Many of the people who advocate repatriation are the same people who want us out of Europe - full stop.
For them, no rebalancing of powers will ever be enough.
And so there is no hard border between repatriation and exit...
Because, for these people, repatriation is pulling at a thread - and they want to unravel the whole thing.
Just look at the last few weeks:
As soon as we start talking about repatriation, we descend into the in-versus-out debate.


And heading to the exit would be the surest way to diminish the UK.
Because what then?
Become the next Norway or Switzerland?
Advocates of repatriation point to these nations and say they have the best of both worlds:
Access to Europe's markets...
Without an assault on their sovereignty.

But these countries sit and wait for bills and directives from Brussels...
Duly paying their bit, changing their laws...
But with absolutely no say over Europe's rules:
No political representation; no national voting rights; no voice at all.
They work by fax democracy:
You find your instructions on the machine in the morning, and you follow them.
They have no meaningful sovereignty in the EU.

Norway has had to implement three quarters of all EU legislation...
Including the Working Time Directive.
They pay into the EU Budget: for the specific programmes they participate in and for development grants to new member states.

Switzerland has no guaranteed access to the Single Market.
They have to negotiate on a case-by-case basis.
And right now they are having to match - even surpass - rigorous EU banking regulations...
Just to protect business between Swiss and European banks.

To go down that route would be a catastrophic loss of sovereignty for this nation.
I want better for the UK.


And our other allies want better for us too.

It's long been the case that the UK stands tall in Washington...
Because we stand tall in Brussels, Paris and Berlin.
There is a great deal to our enduring special relationship.
But, for the Americans, the UK's leverage on the continent has always been part of our appeal.
That will remain the case - no matter who's in the White House after next week.

And while it is, of course, important that we form new alliances in the world...
In Asia, India, Latin America...
The idea that we can float off into the mid-Atlantic...
Bobbing around in a new network of relationships...
Without a strong anchor in Europe...
While countries around the world - incidentally - are working more and more in regional blocks...
Is clearly not a sound strategy in a fast-moving, fluid and insecure world.

Those who advocate turning our back on our neighbours…
Seem to think we have a ready-made web of alternative alliances…
A set of international agreements with other countries that could readily sustain us.
But that isn't how it works.

The Commission has just confirmed, for example, that if the UK suddenly left the EU…
We would instantly lose access to every EU trade agreement with a third party.
Agreements with 46 countries are in place, and agreements with a further 78 are under negotiation.
Our membership of the EU gives us access to all of them.
And that includes almost every Commonwealth country.
The EU is looking at opening negotiations with nine more countries, two of which, Japan and the USA, would be very significant.
Do we really want to leave the EU, lose these free trade arrangements for UK exporters, which go above and beyond WTO rules...
And potentially have to negotiate that all from scratch?
The UK government would spend a decade doing that and nothing else.
And can anyone seriously suggest that Japan, or South Korea, or Brazil would cut us a better deal as an island of 60m people than as a continent of 500 million?

Ironically, the people who do understand this strength-in-numbers argument are the Scottish Nationalists.
They may be trying to pull away from the UK...
But they're going around saying an independent Scotland would have automatic entry into the EU - an assertion that has no basis in fact...
Precisely because they see how important it is to Scottish prosperity.
And they know a separate Scotland, seeking re-entry into the EU, would lose the extra benefits it gains from being part of a big member state.
They don't want to face what might happen to Scotland's influence on fishing quotas, or agricultural policy, or the regulation of the banks.
They don't want reality to bite.
So they've gone into denial, preferring political assertion to legal advice.

The best - and most realistic - choice for the United Kingdom is to stand tall in our European hinterland;
For the sake of our security, our prosperity and our place in the world.

Standing tall means asserting ourselves when we need to protect the nation's interests.
But also cooperating with our neighbours when it is for the good of the British people.
In the coming weeks and months, that will mean three things.


First, taking a tough line on the EU Budget...
Ahead of a special European Council meeting at the end of the month.

The Coalition Government's position remains the same:
We will not accept an increase, above inflation, to the EU Budget.
That is a real terms freeze.
And we will protect the British rebate in full.
That is the toughest position of any European country.
At a time of deep fiscal tightening in the UK...
With British taxpayers seriously feeling the pinch...
We cannot support a real increase in EU spend.

Labour has now taken a different position - as we saw last night - having had a change of heart.
Ed Balls knows only too well, from bitter experience...
That there is absolutely no prospect of securing a real terms cut to the EU budget.
But at the eleventh hour, and having stayed silent on this issue for months...
Labour now proclaims that, actually, this is what they've wanted all along...
And they can wave a magic wand over the Council negotiations and convince 26 other countries to agree.

Yet it was Labour who agreed to the last long-term EU budget settlement...
Which saw a major jump in EU spending and lost part of the UK's rebate...
In exchange for virtually no real EU spending reforms.
And British taxpayers have suffered the consequences ever since...
With our net contributions going from less than €3bn in 2008 to more than €7bn in 2011.

Who were two of the Labour MPs to vote for it?
Ed Balls and Ed Miliband.
Who was the Europe Minister?
Douglas Alexander.

Their change of heart is dishonest, it's hypocritical...
And worst of all, Labour's plan would cost the taxpayer more, not less.
Because in pushing a completely unrealistic position on the EU budget...
One that is miles away from any other country's position...
Labour would have absolutely no hope of getting a budget deal agreed - driving the annual EU bill up instead, over which we would have no veto power at all.

We've been waiting for years for the Labour party to announce how they would cut spending.
Now they have finally come out in favour of cuts...
But in a way they know is undeliverable; and in a way that would hurt British taxpayers.
And it turns out even their cuts cost money.
I've heard people describe it as clever opposition politics - and I suppose it is.
But it's not the behaviour of a party serious about government.

Yes, the British Government's position is tough.
Yes, it is going to be difficult to negotiate.
But we are working for a deal because that is the best way to protect British interests.
The Prime Minister and I may have our differences on Europe...
But, on this, we are absolutely united.
To one side we have opponents of the Government pretending we can give less...
On the other side, there are some in Europe demanding we give more.
But it's our job to make realistic, responsible and hard-headed decisions on behalf of the British people.

This is a deal that can be done - that's the message I'm pushing with my European counterparts.
With governments across Europe having to get the most out of every pound, Euro or zloty they spend...
A real terms freeze is a good offer.
It's in the EU's own interests to be seen to be showing real restraint.


Second, we need to be actively protecting and advancing the single market - and our place in it - for the sake of British jobs.

Around one in every ten jobs in Britain relies on British trade within the Single Market.
Around half of all our trade goes to other European states - exports from around 100,000 firms.

But as Europe evolves, we cannot take the integrity of the Single Market for granted.
That's already been made clear during negotiations on the new Eurozone banking union...
Which we're having to ensure doesn't undermine the single market in financial services - prejudicing the City.
And we can expect more of this kind of thing, as the Eurozone integrates further.

And not only will we need to defend the Single Market - we also need to deepen it.
Removing trade barriers in services and digital industries would be worth around £3,400 a year to the average household.
Money we need as we return our economy to health.
But it won't happen without leadership from the UK.
We were among the Single Market's architects:
Lord Cockfield - a British Commissioner - helped design it;
Margaret Thatcher played a critical role in pushing it through
And today - as the most open, liberal economy in the EU - we will need to help finish what was started twenty years ago.

And that's how we send the right signal to foreign investors too.
One of the reasons big multinationals come here is because we offer a launching pad to the world's largest borderless marketplace.
Think of the big employers who've set up operations here: Samsung, Tata, Siemens.
The automotive giants helping drive the renaissance in the UK's car industry:
Nissan, Honda, BMW, Toyota.
Firms who currently pay no import tariffs on the vehicles they send from here to the continent.
But who would be faced with levies of up to 22% if the UK suddenly left the EU.

These companies need to be reassured that we will continue to be the best bridgehead into the European market.
We cannot afford to give the impression that we are going to disengage.
We need to stay focused on driving trade between us and our neighbours.
That is the only way to protect British jobs.
It's a position that is pro-business and pro-Britain too.


Third, cooperation on law and order.

Before signing up to the Lisbon Treaty in 2009…
The previous Government negotiated an opt out on a package of 130 crime and policing measures, which pre-dated the Treaty.
The Coalition now has to decide whether to stay opted in to all of those measures...
Or else pull out of the lot, before seeking to opt back in to individual instruments - depending on negotiations with the Commission and the Council.
A decision needs to be taken by 2014 and we will give Parliament a say.
But, clearly, we need to agree our starting position now.

So we're looking across the 130 measures.
The Government has said our current thinking is to opt out of them en masse, before seeking to rejoin some.
But I want to be absolutely clear:
A final decision has not been taken.
And I will only agree to doing that if I am 100% satisfied we can opt back in to the measures needed to protect British citizens.
And if I am convinced we are not creating waste and duplication, incurring unnecessary costs.
We will be led by the evidence and the experts at all times.
What matters is preventing crime and terrorism - this must not turn into an ideological scrap.

We are likely to find that some of the measures are defunct.
Like old measures to improve data collection in drug trafficking, or things like outdated skills directories for crime fighting professionals - old instruments that have now been superseded.

But there are others which have transformed the way our police operate...
Delivered justice for victims of crime where once there was none...
And put thousands of criminals behind bars.

It is my strong personal view, that there is a great deal of value in Europol, for example, which pools intelligence to combat serious organized crime.
Joint Investigation Teams and Eurojust, which enable cross-border operations...
Like the ongoing investigation into the recent murder of a British family in Annecy in France.
Today, if a rapist, or paedophile or violent offender living in Britain has a foreign criminal record - we can receive it at virtually the click of a button.
When a forged British passport or driving licence turns up in Europe - we can find out about it straight away.
When a fugitive runs from the UK, we can use the European Arrest Warrant to bring them back - as we saw again recently in the case of teacher Jeremy Forrester.
Yes, the Arrest Warrant needs reform so that it is used proportionately, but it is an important crime fighting tool.
We've managed to set high standards for combatting children pornography across the whole of Europe - something the UK pushed for.
Our police can call on the resources and intelligence of the entire European crime-fighting community....
To hunt down and arrest murderers, escaped convicts;
To stop billions from being laundered out of the UK every year.

In the words of Hugh Orde, the President of the Association of Chief Police Officers:
'In the 21st Century, policing is international.'
And to anyone who says we don't need these EU measures to fight crime and terrorism effectively, I say prove it.
Prove it to the police, the intelligence agencies, the lawyers, the victims of crime charities.
Prove it to the people who deal day in day out with the worst criminals imaginable.
Because my position is clear: I will not ask them to protect the British people with one hand tied behind their back.

The UK is part of the most advanced system for combating cross-border crime on the planet.
And we have been at the forefront of building it.
Over the last fifteen years we've led the way on crime and policing cooperation in Europe.
The Head of Europol is British.
The last head of Eurojust was British.
The EU's police training centre is at Bramshill in Hampshire.
This package of 130 law and order measures has British fingerprints all over it.
And I want UK citizens continue to benefit - fully - from the system we built.


So, tough on the money; more jobs; more criminals behind bars.
That's the deal we are going to deliver for the British people.

You cannot do any of those things from the edge.
You cannot deliver for British citizens when you're halfway out the door.
Europe is changing - yes.
But rather than go into retreat, now is the time to confront those changes head on.
We need to make a decision about who we will be in the new Europe.
And I say we need to be strong, loud, present…
That's the strategy that will leave the UK more prosperous, safer, strong.
Standing up for the people of Britain by standing tall in our own backyard.

Thank you.

Paul Burstow MP has also been elected as chair of the Parliamentary Party.

The new appointments in the House of Commons are:

Gordon Birtwistle, Business, Innovation and Skills

Mike Crockart, Energy and Climate Change

Julian Huppert, Home Affairs, Justice and Equalities

John Leech, Culture, Media and Sport

Greg Mulholland, Work and Pensions

Alan Reid, Transport

Mark Williams, Wales

Roger Williams, Food and Rural Affairs

John Thurso becomes the co-chair to the Parliamentary Party Committee on Constitutional and Political Reform in addition to the role he holds for the Scotland committee.

The new appointments in the House of Lords are:

Lord (Jonathan) Marks of Henley on Thames, Justice

Lord (Monroe) Palmer of Childs Hill, Defence

Lord (Mike) Storey, Education (starts January)

Lord (Martin) Thomas of Gresford, Wales

A full list of the Liberal Democrat Parliamentary Party Committee Co-Chairs is copied below:

Work & Pensions
Commons Co-Chair: Greg Mulholland
Lords Co-Chair(s): Lord German


Education, Families & Young People
Commons Co-Chair: Dan Rogerson
Lords Co-Chair: Baroness Walmsley until January 2013, followed by Lord (Mike) Storey


Constitutional & Political Reform (including Cabinet & House Business)
Commons Co-Chair: John Thurso
Lords Co-Chair: Lord Tyler CBE DL

Culture, Media & Sport
Commons Co-Chair: John Leech
Lords Co-Chair: Baroness Bonham-Carter of Yarnbury


Energy & Climate Change

Commons Co-Chair: Mike Crockart
Lords Co-Chair: Lord Teverson

Environment, Food and Rural Affairs
Commons Co-Chair: Roger Williams
Lords Co-Chair: Baroness Parminter


Transport
Commons Co-Chair: Alan Reid
Lords Co-Chair: Lord Bradshaw


Communities & Local Government
Commons Co-Chair: Annette Brooke
Lords Co-Chair: Lord Tope CBE


International Affairs (FCO, Defence & DfID)
Commons Co-Chair: Martin Horwood
Lords Co-Chair: Baroness Falkner of Margravine (FCO)
Lords Co-Chair: Lord Palmer of Childs Hill (MoD)
Lords Co-Chair: Lord Chidgey (DFID)

Health & Social Care
Commons Co-Chair: John Pugh
Lords Co-Chair: Baroness Jolly

Home Affairs, Justice & Equalities
Commons Co-Chair: Julian Huppert
Lords Co-Chair: Baroness Hamwee (Home Office)
Lords Co-Chair: Lord Marks (MoJ)

Business, Innovation & Science
Commons Co-Chair: Gordon Birtwistle
Lords Co-Chair: Lord Razzall CBE

Treasury
Commons Co-Chair: Stephen Williams
Lords Co-Chair: Baroness Kramer

Wales
Commons Co-Chair: Mark Williams

Lords Co-Chair: Lord (Martin) Thomas

Scotland
Commons Co-Chair: John Thurso
Lords Co-Chair: Lord (Nicol) Stephen

Northern Ireland
Commons Co-Chair: Stephen Lloyd
Lords Co-Chair: Lord Alderdice

New £1bn boost for regional growth

The £1bn third round of the Coalition Government's Regional Growth Fund was announced by Deputy Prime Minister Nick Clegg last week. This is another massive investment in new jobs across England. It will create or safeguard thousands of jobs over the long term, benefitting around 130 projects and leveraging £6bn of private sector investment.

For too long, the economy has been lopsided and over-reliant on financial speculators in only one Square Mile. As we build a new economy from the rubble of the old, Liberal Democrats in the Coalition Government want to rebalance the economy so that it benefits the whole country, not just London and the South East.

The Business Secretary, Vince Cable went to Liverpool to visit Redx Pharma, a UK-based pharmaceutical company, which has been allocated £4.7m in round three, for research into drugs against microbial infection, influenza, hepatitis C and HIV. The project is expected to create 119 jobs over five years.

The government investment will help manufacturing firms, small businesses and local partnerships across England to expand their operations, create new jobs and stimulate growth - the Coalition's top priority.

Bidders will be putting in £6bn of their own cash for these projects and programmes which are expected to create and safeguard more than 240,000 jobs over the long term. This comes in addition to the 300,000 jobs that are being created or safeguarded from rounds one and two of the fund - the majority of which are being added over the next five years.

"Today's positive GDP figures are another encouraging sign. Together with falling unemployment and inflation, these are signs that the economy is healing.

"The UK suffered a huge economic shock during the financial crisis. Liberal Democrats were clear when we joined the Coalition Government that it would be a choppy road to recovery but that we needed to create the right conditions to support growth and deal with the deficit.

Many in the corporate world do not - automatically - see the Liberal Democrats as natural allies. Perhaps that's because, most recently, we've rightly earned ourselves a reputation as loud critics of corporate irresponsibility.

Not least in financial services following the crash in 2008. Yet, historically, the Liberal Democrats are a party of industrialists and small business; staunch advocates of free trade between open economies; long believers in the power of enterprise to help individuals fulfill their own potential, while serving society at large. And, since coming into government, we've been taking decisions, day in, day out, to promote British business.

Whether that's ensuring a sensible approach to Europe: where we're determined to defend and deepen the Single Market - protecting our place in it - while the Eurozone members integrate more tightly.

Whether it's a sensible approach to immigration: where we're tightening the system, but must do so without turning away the talented individuals who want to come here and make a contribution to your firms.

Whether it's pushing for more investment in green industry: where there's such high potential for growth.

But perhaps I haven't said enough about these things. From now on, I intend to be much more open about our efforts to support British business. I want you to be confident that my party is on business' side. That we are determined to put the private sector at the heart of a strong, rebalanced economy. That we will be sensible and centrist; pragmatic - not dogmatic - at all times.

Bluntly, with the economy still fragile, this is not the time for dogma. There's a lot of speculation about what tomorrow's GDP figures will bring. Whatever they look like, we know that, overall, we've set the economy on the right path. But recovery is slow and fitful. Repairing the damage following the shock in 2008 is a gradual healing process. And the Government must remain absolutely focused on the reforms that will drive growth.

Indeed, it's dogma - at least in part - that got the economy into this mess. It was blind faith in the unrestrained operation of financial markets that helped take the banking system to the edge of a precipice. Political, regulatory and financial elites were so intoxicated with an unfettered and over-leveraged banking system that they refused to hear the alarm bells as the financial crisis loomed; they refused to see the deep, structural weaknesses that had emerged in our economy.

So we're turning a page on the economic ideology of our recent past. And, as we navigate these extreme times and uncharted waters, we should be vigilant against kneejerk or dogmatic responses to our economic challenges. And tonight I'd like to single out three areas where pragmatism is especially needed from both Government and business, as we work together.

First, we need a balanced, engaged approach to Europe - essential to the interests of the City. Second, we must prioritise lending to sound business - critical for our economic recovery. Third, we need to lead the shift to a more responsible, more sustainable corporate culture - crucial to our long term success.

First, defending the City in Europe.

The Coalition's starting point is simple: we support difficult regulatory surgery - at home and abroad - where that is needed to stabilise the financial sector. But we will not accept steps that are anticompetitive or protectionist. The playing field must be level.

That's why, for example, I don't support a Europe-wide Financial Transaction Tax. Though I would support a global one. Limiting the FTT in this way would skew the playing field. It would be bad for Europe in the world, and bad for the UK in Europe. And, what's more, at a time of high unemployment in Europe. The Commission has itself said that it would cost more jobs than it creates.

On the other hand, I welcome the Liikanen Report: a set of reforms for Europe's banking system. It's largely consistent with our domestic intentions, as set out in the Vickers Report. And I'm keen that we support implementation of the Liikanen proposals across Europe. Alongside implementing Vickers here in the UK.

Where our situation is less straightforward is the Eurozone banking union - at the top of the agenda at last week's European Council. And it's here that we need a sophisticated approach.

Clearly it's not a good idea for the UK to be part of a full Eurozone banking union designed to break the vicious circle between sovereign debt and bank debt in the single currency area. But let's not forget that we're already part of a banking union-lite: the single market in financial services. And so, while we have an obvious interest in the full, Eurozone banking union succeeding. At the same time, we need to make sure it doesn't prejudice the UK. The worst outcome would be the creation of an over-powerful banking bloc. Able to undermine the single market. Able to undermine what remains - by far - Europe's largest financial centre: the City of London.

So the question is: how do we get the best outcome? As someone who worked in Europe for years, my view is the best approach is to engage fully and properly in the debate. Making our case and winning the argument over and over again, while decisions are being made.

That's why the Coalition Government will now do two things: One: after last week's summit, we'll work flat out to make sure that the rules governing the relationship between the European Central Bank, in it's new supervisory role, and the Bank of England - and the role of the European Banking Authority - are settled in a sensible manner.

Two: we want to work with you to show that the City is not just a British asset, but a European asset too. It's responsible for over a third of the European wholesale market. 80% of the EU hedge fund industry is based here.
Our financial and professional services employ more people than Paris and Frankfurt put together. We've got more foreign banks than any other city. The largest insurance industry in Europe. AIM - Europe's biggest equity market for small business. The City is the biggest exporter of financial services in the world. And you know better than anyone that if London-based firms decided to leave they wouldn't all head straight to Frankfurt or Paris. Many would go to New York, Hong Kong, Dubai.

That's the reality I'm pressing with my European counterparts. And I implore the industry to do more to push this message yourselves - not least City UK. The rest of Europe needs to be crystal clear: If they integrate in a way that hurts the City, they potentially hurt Europe as a whole.

Second: lending. The thing our economy needs most, right now, is money flowing through it. Especially for SMEs. That is urgent. And it's essential if we're going to build a private sector that is vibrant, entrepreneurial, diverse.

So Government is doing everything we can to help finance business: working with the Bank of England to deliver the £80bn funding for lending scheme; creating a new Business Bank to support up to £10bn worth of loans; setting up a Green Investment Bank for low carbon companies specifically; investing directly - and leveraging private money - through schemes like the Regional Growth Fund; as well as seeking to boost non-bank forms of financing like peer-to-peer-lending, supply-chain finance; and so on. But with such tight constraints on the public finances, we can only do so much; the bulk of the money has to come from you.

I know that there are issues with demand - I don't discount those. But perception is as big a problem as any: many small firms simply don't think they'll get the loans. I know that the banks feel restricted by their capital and liquidity requirements. But the FSA has recently announced more flexibility in those requirements - a move I very much welcome. Precisely because it increases the banks' capacity to lend.

Third: responsible enterprise - the theme of my last speech here, in January. It's an issue David Cameron and Ed Miliband have also spoken about. And, while it is encouraging to see the parties converge for once. This must not be mistaken for a political bandwagon that will, eventually, roll on.

It won't. Responsible capitalism is not a fad, it's hard-headed economics. It's about empowering shareholders, investors and ordinary workers to create a check on reckless decisions. It's about rewarding people who drive short-term profit but who think about long-term stability too. It's about fair and healthy competition so the best companies flourish and the most talented individuals rise.

That's a corporate world more sustainable, ultimately more profitable, and which commands public support. Business doesn't operate in a social vacuum. Especially at a time when banks have come to rely - for their very survival - on an explicit or implicit taxpayer guarantee. The public backlash against the banks hasn't just been uncomfortable for the sector, it has threatened the basic consent in society. Without which the modern commercial banking sector would be unable to operate. So it's in businesses' own interests to be sensitive towards their social context.

In government, we're delivering a range of reforms that will strengthen our corporate culture, many led by Vince Cable:

He also called on all Liberals around the world to focus on fighting corruption in the corporate world as well as the public sector to build sustainable growth.

Speaking at the closing ceremony of the Liberal International Congress Simon Hughes said:

"Remember as liberals what our core values are:

A passionate commitment to the rule of law, equally applied to all, the powerful and the weak, the rich and poor;

A passionate commitment to the rights of all human beings to freedom of expression;

And a passionate commitment to economic and social justice.

The majority of people on the planet live in places where inequality is greater than a generation ago.

From the beginning, Liberals knew that we could not fight injustice, corruption, violence and ignorance without working together across countries, and in today's world of global financial markets and global communications this is truer than ever.

We will not be able to end poverty in Africa as long as banks in Europe allow corrupt politicians in Africa to launder money through them.

We will not end conflict worldwide if we do not have strong controls worldwide on the arms trade and conflict financing.

In this city of Abidjan one of the worst environmental and economic crimes was committed when toxic waste from a European company was dumped here and 100,000 people had to seek medical attention.

And it was in my city, London, where these crimes were exposed and justice sought and obtained.

At the start of the 21st century, a liberal economy in both developed countries and developing countries must take on corruption in the public sector and the corporate sector, and must take on inequality and vested interests if we are allow everybody to benefit from our shared resources.

So all Liberals must go home to our own countries and work harder for greater equality for all people, particularly minorities who are discriminated against on the grounds of their faith, ethnicity, race or sexuality; work harder for a reduction in inequality of income and wealth, and work harder to end corruption of governments and social irresponsibility by private companies."