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Pat McFadden MP, Minister for Business, Innovation and Skills
1 Whitehall Place, 25 June 2009
Thank you very much.
It’s a great pleasure for me to be here. And I want to explain a little bit about what we are thinking in the formation of this new Department and in the government in terms of the industrial economic situation going forward.
For all of us, right across the world, this has been an absolutely extraordinary situation to be dealing with in the last year.
We had the initial collapse of finance and credit and then the unrolling of that to the rest of the economy.
And, after many years of stable economic growth, it has prompted a question in all our minds as to how government should react and what our job description should be going forward.
And that’s really the thinking behind us in the UK bringing together our policy on business, our policy on science and innovation, and our policy on higher education into one department.
And the thinking really is this.
Of course, during an economic recession governments have to deal with the issues confronting them.
For example, today we have sad news 2,000 people in the steel industry in the UK are going to lose their jobs.
And when that happens the government has to be there for people. The government has to do what it can to help them through that situation and to find another job.
No government can ever say that it can stop an economic recession having an impact in terms of people losing their jobs or companies experiencing the effects of that.
But what we can do, in contrast sometimes to what happened in the past, is to step in and say we can help you get a second chance.
We can help you make a new start.
For those steel workers that is precisely what we will do.
But we would only be doing half our job if we simply confronted the issues facing us in the course of the recession.
It demands, I believe, a deeper response a deeper rethinking of what government should be doing in terms of shaping the economy of the future.
And that is to try and think beyond the immediate problem to what kind of economy is going to emerge from this recession.
And that is part of our Department’s job and we regard that very much in Government as part of our job.
That’s why we’ve brought things together in this new Department.
Now, one thing that’s for sure, is that Britain’s economic future relies on continuing to be a great trading nation.
Here we celebrate the relationship between Britain and Australia economically and that’s a hugely important relationship with bilateral trade worth some £10 billion a year – I believe it could be a lot more – but that is strong economic relationship.
And, of course, we have a social, cultural and sporting relationship which is longer and deeper than that.
Part of the reason that this is so important is that, for a country of our size, placed where we are in the world, we survive or will survive by the extent to which we’re connected, trading and operating with the rest of the world.
I continually meet people who say to me - you don’t realise what a fantastic country Britain is. That people, anywhere in the world, can come here, make a business invest and do well.
It is not always true around the world. We’re very proud that it’s true here and Australian companies – many of the countries who are here today – are benefiting from those opportunities and I want that to continue for a long, long time to come.
And I want us to build and grow on what we are doing already.
There’s also another particular focal point, of course, for our economic and trading relationship and that is the Olympics in 2012.
Ever since London was awarded the Olympics I’ve been interested not only in trying to create the greatest sporting festival on earth but in the fact that this is the biggest infrastructure and single investment project in the UK in the coming years.
Now I represent a constituency in Wolverhampton in the Midlands – the heartland of Britain’s manufacturing tradition.
And I want to make sure that companies from all parts of the country benefit from those investment projects and that the benefit of all the services and manufacturing that goes into the Games is reflected round the country.
And I think Australian companies, the Australian experience after Sydney, has got a great deal to teach us.
Because what I’ve been interested in, not only through the Sydney Olympics but then seeing the Olympics since in Athens, Beijing and in London to come, is how Australian firms – who started off developing an expertise in producing that event – have continued to prosper.
And we see that already in our own Olympics where the Chief Executive of our Olympic Delivery Authority David Higgins – an Australian who worked on Sydney – is now helping London to deliver what, we hope, will be an absolutely fantastic Olympic Games in a few years’ time.
And these opportunities are not theoretical they are real.
For example the lighting control systems in the hotels and the Olympic venues were created by a Sydney company called Dynalite.
The artificial turf in the hockey field engineered by Queensland’s Sports Technology International and Argus Solutions from New South Wales providing the mobile phone antenna in the ‘Bird’s Nest’ stadium in Beijing.
So the expertise gained from creating one Olympic Games can benefit a country in the future.
You’ve already shown us how that can be done in Australia and I want to see a similar success through the United Kingdom hosting the Olympic Games.
But I talked a bit about shaping the economy in the future. And there’s one particular area that I want to highlight and that is the shift to a low carbon economy.
Because what strikes me, as someone of my age and my generation, is that looking into the future the way we heat our homes, the way that we transport ourselves, the way that we produce our energy, the way we produce our goods and services – all of that is going to change profoundly in the years to come.
And I don’t need to tell anyone from Australia about the impact of climate change after the hottest years, year on year, unfolding there.
Predictions for the future suggest that this extreme weather will continue. Rising sea levels, intense droughts, threats to national treasures like the Great Barrier Reef.
And we too, here in Britain, are feeling these effects with significant floods in recent years.
And last week we released our climate change projections. And they painted a sobering picture of warmer, wetter winters, hotter, drier summers, sea levels rising, more severe weather.
And it’s these overwhelming environmental factors that have driven our countries to create targets to substantially cut greenhouse gas emission by 2050.
And, two thirds of those emissions come from the way we use and the way that we produce and so the need for low carbon solutions has never been greater.
And this is absolutely at the heart of how the United Kingdom and I believe Australia see our economic future. That’s at the heart of what our Department is doing.
And despite the problems that I’ve outlined, in terms of the impact of climate change, there are also opportunities because it’s currently estimated that the world will need to spend around £1.1 trillion per year, over the next four decades, to halve our carbon emissions by 2050.
So this is a real chance for companies with creativity, energy and enterprise to build up the national low carbon infrastructure.
To create new innovative solutions to old problems and create new markets.
This morning I met with leading industrialists in the civil nuclear field to talk about how we, as a country, produce our energy in future years.
Nuclear is not the only area, of course. Clean coal, bio-gas, off-shore wind, solar power and sea power.
We’re taking an active industrial approach to these issues in the United Kingdom.
We’re investing in low carbon and renewable power.
In the recent Budget we announced a Strategic Investment Fund much of which will be shared between my Department and the Department of Energy and Climate Change.
To make sure that we not only meet our goals but create the best economic chance for companies to do so.
And there is a social side to this. It is one thing to create goals and it’s one thing to say we’ll have so much done by nuclear but governments also have to give their companies, and their people, the best chance to make the most of these opportunities.
And that’s a question about education and skills and investment in people. Because if we simply create the goals but we don’t give our populations the chance to acquire the skills and equip themselves to make the most of these opportunities we’re not doing a complete job. And that’s why we’ve brought education together with business and industrial policy.
That doesn’t mean we’re going to take a utilitarian view of education. That we’re going to neglect the universal love of learning that must be at the heart of any world class education system.
But it does mean that we care as much about the opportunities of people to participate in the creation of this low carbon economy as we do about the creation of the low carbon economy itself.
Now the Australian market for environmental goods and services has been estimated at around £11 billion in 2006 with annual growth of seven per cent.
At a Governmental level co-operation is already taking place on practical projects such as emissions monitoring and measurement, renewable energy and efficiency.
Individual companies are also working together.
For example Melbourne company Coolnrg a 'social purpose, for-profit' organisation brokered a deal in the UK to distribute 4.5m energy saving light bulbs in partnership with the Sun newspaper and Southern Electric.
Australian company, Sims Recycling Solutions, has opened a recycling plant costing £12 million in Newport, Wales, creating 200 jobs.
So there’s already companies investing both here and in Australia to create the kind of economy that I’m talking about and Britain too is returning the compliment by making investments in Australia.
And the winner of this year’s Emergency Planning Society’s most innovative product of the year was Floodstop.
This is an easy-to-assemble barrier for protecting households or premises from flood damage.
And the inventor Simon Phelps identified Australia early on as, of course, a potential market for this product.
He said: “It seemed a natural place to expand to. We’ve already received interest from a large Australian company.”
So there are opportunities there.
It's Britain’s openness as a country, it’s our welcome to people from Australia and to people from around the world, it’s our enthusiasm for the entrepreneurship, the ideas, the investment, and the people from abroad that makes us a good home for this.
And I think there’s probably no better example of that than the large Australian community here in the United Kingdom, the large Australian business community in the United Kingdom, and the strong relationship that exists between our two countries on every level.
So, yes, we’re good friends. Yes we’ve got a long relationship.
But I think, particularly at this time, when the economic and the political task is much more than business as usual.
It’s much more than steady as you go.
It’s actually a more fundamental task because out of the destruction of the old comes the birth of the new.
And that’s why, for your Government in Australia, for our Government here this question of how to renew and how to create the economy of the future is absolutely a fundamental part of our job description over the coming years.
We’re up for the task here and I know that the Australian government and the Australian people are too.
What I hope, through events like this and through the mutual investment and mutual co-operation between companies and between our governments, is that we both do the best job we can. Not just for our economies and business but most fundamentally for our populations too.
Thank you very much for inviting me here today and good day.
