George Osborne
George Osborne spoke at the Conservative Party conference in Manchester on 5 October Getty

NB: This is a press released version of George Osborne's speech at the Conservative Party conference in Manchester and may differ from his delivery.

Let me tell you how proud I am to stand before you the first Conservative Chancellor in a Conservative Government to address a Conservative Conference in eighteen years. If I'd told you twelve months ago that the Member of Parliament for Morley and Outwood was going to come onto this stage and speak in our economy debate you'd have called security. Andrea, your win capped off a night that no-one here will ever forget.

Can you all remember where you were when that exit poll came through? I certainly can. I was just a few miles away from here, waiting to go to my count at the Macclesfield leisure centre. I was completely calm.

No I wasn't. I was completely nervous. Unable to sit down. Unable to stand still. I was pacing around. And then a moment of calm did descend. I realised there was absolutely nothing more I could do. I was powerless. Completely powerless in the face of the real power of the British people.

You realise, the way we talk about these elections is all wrong. We think elections are the moment when we all go round the country and talk to people. But actually elections are when the British people talk to us. And what the British people said to us in May couldn't have been clearer: We elect you to do a job.

'Tough decisions'

So take decisions, don't duck them. And the truth is this: If you do take those decisions - even if the decisions are unpopular and bitterly opposed at the time - If you do take the decisions and they are rooted in your values and turn out to be the right ones, then people will go on putting their trust in you.

That's the lesson of the last Parliament. That's the lesson for this one. So we've had our instructions from the British people and we say to them: we will not let you down. You in this hall are the heroes of this famous campaign. You're the ones who fought inch by inch, door by door, street by street for this election victory.

We're a team. A great team, I'm lucky to count myself part of. I want to thank you. I want to thank you on behalf of every candidate who stood in this election. And I've been asked to pass on a special thanks. From the maintenance team at Downing Street. They want to thank you that they don't have to put up an eight-foot high tombstone in the back garden.

I want to thank my brilliant Treasury team: Greg Hands, David Gauke, Harriett Baldwin, Damien Hinds, Mel Stride, Chris Skidmore, Jake Berry, Conor Burns and the world class economist Jim O'Neill. And there's one member of the Conservative team who I personally owe a huge amount to. Let's face it. There were moments when lots of people had doubts whether our plans would work moments, as I was well aware, when people had doubts about me.

Praise for Cameron

But one person always backed me in private and in public, and never wavered in their support. I want to thank him. That is the person who's led our country with integrity, intelligence and imagination. My friend, our Prime Minister: David Cameron. Under David's leadership, after a full term in Government we increased both the number seats we hold and the share of the vote we won. That's a winning combination no Prime Minister of any party has achieved since the nineteenth century.

It earns David not just a mandate to govern; It earns him a place in the very highest rank of our party's leadership. David, we salute you. But, friends, it is precisely in our hour of greatest success that I choose to come here to deliver a warning. A warning for us all to heed. It is this: Don't let us rest on our laurels.

The British people have not put us here to congratulate ourselves. They have put us here to do a job. The lesson of the last five years, and the victory that followed, is that the future favours the bold. So we've got to be the builders, the people with the new ideas. The people open to the new thinking. Ready to listen. Admit where we get it wrong. Accept when others have got it right.

The people with the plan for the future. Some stand on the sidelines. Some want to knock things down. But we – we are the builders. And let me tell you who we are building for. The working people of Britain. The millions of people who work hard, provide for their families and pay their taxes for the public services we need. The people who just get on with it.

They don't have a trade union calling them out on strike; there's no pressure group that will go on the radio to fight their cause. These are the people we're fighting for. Millions of working people. These people need to know we are on their side. Because many of them, let's be frank, still voted for the Labour Party just this May. They want security and opportunity, but they didn't quite feel able to put their trust in us. We've got to understand their reservations.

'Labour have turned to the 1980s'

So to these working people who have been completely abandoned by a party heading off to the fringes of the left let us all here today extend our hand. Do you know what the supporters of the new Labour leadership now call anyone who believes in strong national defence, a market economy, and the country living within its means?

They call them Tories. Well, it's our job to make sure they're absolutely right. Because we're now the party of work, the only true party of labour. My message to today's Labour Party is this: You head back to the 1980s. We're heading forward. You listen to the few. We'll govern for the many.

Now I often get asked in this job: do you understand the impact of the decisions you make? And my response is this. Yes I do. Because we've made decisions, there are a record number of people in work. And let me tell you, if you don't make decisions, then people do suffer. And let me tell you this as well.

Failing to run a sound economic policy is the most unkind, uncaring thing a Government can do. I'll tell you what happens when you lose control of the public finances and borrow money you don't have. It's not the richest who suffer, or the trade union barons who lose their jobs. No, it's always the poorest who suffer when the economy fails. It's always working families who lose their jobs.

That's not a kinder, caring Britain. I'll tell you what that is. Its economic cruelty dressed up as socialist compassion. And we're not going to let them wreck the lives of working people again. We are the builders.

And to build, you must build on solid foundations. We've laid those foundations these last five years. We've established the idea that government can't go on spending money it hasn't got. The idea that businesses need to be competitive and make profits to create jobs. The idea that you don't show your compassion by the size of the benefit cheque you dole out, rather you get people back to work. That's what we built together.

Every argument we won, another business started... another person got a job... another academy school opened... another family felt the security of work.

Every argument we won, we have shifted the terms of the debate in our country and created a new centre ground, around fiscal responsibility and lower welfare, reformed public services and support for business too. We turned our country around, and together we've made sure, Britain is working again.

Now we must build on those foundations. Create the budget surplus. Deliver lower welfare, lower taxes and higher wages. Build the new roads, and railways, and runways. Win reform in Europe and put the power into the Northern Powerhouse. To borrow from an American President, we choose to take on these things not because they're easy, but because they're hard.

For we are the builders. And there are few things harder than repairing the public finances. We are still spending much more as a country than we raise. In the spending review this Autumn, we've got to finish the job. And we're going to do something more. We're going to make sure this country never gets into this mess again.

So we're going to run a surplus. What that means is that in good years, we'll raise more than we spend and use the money to reduce our debts. That way we'll be better prepared when the storms come. Because frankly, I look at the world at the moment and I see a lot of economic risk out there. China is vital to our future, but it's not growing as strongly as it was; the Eurozone is still very weak; and the latest jobs numbers from America are disappointing.

We can't be immune from all of this. We must be prepared for whatever the world throws at us. Our plan for a surplus provides security for working people. We're going to put it to a vote in the House of Commons next week. And we're going to go on fixing the roof while the sun is shining.

Part of fixing the roof is getting the British taxpayer out of owning great chunks of the banking system. I have this morning announced our plans to sell the remaining stake we have in Lloyds bank. Next Spring, we will make Lloyds shares available to every member of the public.

They'll be offered at a discount. Small shareholders will get priority. And long-term investors will get a bonus. You can register from today. It's the biggest privatisation for more than twenty years. And every penny we raise will be used to pay off our debts.

With Labour the banks went bust - we're fixing them. With Labour the debt soared - we're going to bring it down. Labour have now turned their back on opportunity and aspiration - we're going to build the share owning democracy this Party has always believed in. Labour - the wreckers. We are the builders. We're going to have to do a lot more to get Britain back into the black. I won't pretend that making these cuts will be easy. We've got to find more than £20bn of savings.

NHS commitment

But I'll tell you what I'm not prepared to do. I'm not prepared to cut the NHS to balance the books. We'll make sure the health service has more money than ever before. Some people question our commitment to the aid budget but with millions fleeing war zones, and a crisis in Europe, I'm not prepared to cut it.

I want to spend our aid better so it helps the most vulnerable closer to their homes. And because we've built a strong economy, here's something else we can afford to do. Invest in our national security and the armed forces who guarantee it - because this outward-facing, internationally-confident, economically-sound nation - will renew our nuclear deterrent, and spend 2% of our national income on the defence of the realm.

To deliver these priorities there will be tough choices this autumn. But remember this when our opponents line up to fight for every borrowed pound of government spending. The British people have heard the argument that the deficit doesn't matter and they've rejected it. They've listened to politicians who forgot to mention the deficit, and they've rejected them too.

Now we're told that instead of earning the money we need to spend, the Bank of England can simply be told to print it. What could be easier than that? We hear them say. What could be easier than that? They said in Zimbabwe and Weimar Germany too. It's not monetarism - it's magic money-tree-ism.

And let me tell you messing around with the independence of the Bank of England and letting inflation rip destroys savings and is a massive risk to the economic security of every working family.

Mind you, I'd better be careful not to disagree with Jeremy Corbyn about absolutely everything or else he'll invite me to join his Shadow Cabinet. Here's another proposition we're going to take on. That Britain is condemned to be a low skill, low pay, high welfare economy. I want the opposite. Lower welfare and higher pay. The last time we brought our Conference here to Manchester, I slipped away from all the fringe meetings and the receptions to see something that reminds me why I do this job.

Across the way, beyond the cordon, in a nearby office block something uplifting was taking place. People at the job centre were signing up for work. I sat down with a group of them, young and old, to talk to them about their futures. They were nervy at first, they weren't confident about themselves because life had given them precious few reasons for self-confidence.

But as we talked about their new jobs they got more and more animated. They were excited about their future and proud to be in work. Proud to have a job. These are the people I'm fighting for. Now we want to help these working people keep more of what they earn.

We've raised the personal allowance, and I'll keep raising it again and again. We've raised the threshold for the higher rate and we'll keep raising that too. That's what we've promised, that's what we're delivering. Lower income taxes for all and no income tax for the lowest paid at all.

There's another promise we made we're one nation. Everyone makes a contribution. No one gets something for nothing. And that includes business. So here's the new settlement.

More training, higher wages

To business we say this... we'll go on cutting your taxes... to the lowest rates of any major economy in the world. But in return, you have do more to train your workforce and to pay higher wages. And here's the deal for working people - we simply can't subsidise incomes with ever-higher welfare and tax credit bills the country can't afford.

But in return we'll have: new apprenticeships; lower income taxes; and the new National Living Wage. We've said it before, we'll say it again: Britain deserves a pay rise and with us, Britain is getting a pay rise. You know the National Living Wage is something that should be welcomed across the political divide.

I think it's a great weakness of today's Labour Party that it can't acknowledge any good things done by Conservatives. I'll always pay tribute to the role the Labour movement played in building the NHS and establishing rights in the workplace. But that sits alongside the equally proud story of Conservative social justice. The National Living Wage is the latest page in that story.

For it was Conservatives in previous Governments that ended the slave trade; That stopped children working in factories and gave them universal education; That gave equal votes to women... and equal rights to disabled people.

Now it's Conservatives in this government that have banned modern slavery; Legislated for gay marriage; Given new shared employment rights to parents and today extend them to grandparents too; It's now Conservatives in this Government who are shining a light into the darkest corners of our prisons and bringing the best education to the poorest of our children.

So of course it's this Conservative Government that is introducing the National Living Wage. A government for working people. With a pay rise for six million of our citizens. Building the society we promised where we are all in this together.

But building doesn't come easy. Especially when it comes to new homes and the infrastructure this country needs. I am very lucky to represent a constituency just a dozen miles to the south of here full of pretty villages and market towns in the flat and lush Cheshire plain.

The great writer Elizabeth Gaskell used to live there, and she drew on her life in nineteenth century Knutsford to write her most famous book. In the novel, Cranford, the town campaigns to stop the new railway coming through. And today, there are some people in my constituency who want to stop our new high-speed railway.

I respect their opposition – but I also respectfully disagree. Where would Britain be if we had never built railways or runways, power stations or new homes? Where will be in the future if we stop building them now? I'm not prepared to turn around to my children or indeed anyone else's child, and say: I'm sorry, we didn't build for you. So here's our plan. First, we're going to get many more homes built for families to buy.