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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)The Mansion House |
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Introduction Thank you for the welcome. Thank you also for providing the perfect venue and audience for me to set out my plans and aspirations for my tenure at the DTI. Coming just over a month into my new job, the timing couldn’t be better. I have always taken the view that politics is about more than just winning elections. It is about ideas, values, and principles. It is these which give coherence to a government and provide it with a sense of purpose and direction. So what does this mean for the Department of Trade and Industry. I am clear that being pro-business is compatible with social justice and fairness. I firmly believe that the best way to address inequality and social exclusion is to create a more affluent, more successful Britain with opportunities for everyone to fulfil their full potential. Opportunities that come with the success of British business at home and abroad. The reality is that wealth creation is more important than wealth redistribution. It is successful and prosperous businesses which can employ more and more people and also ensure that public finances are sound, so that we have the resources to fund those essential public services like health and education. That’s why there is a fundamental role for business at heart of this Government’s thinking and it ensures an important role and part to be played by the DTI. Given the circumstances surrounding my arrival at the DTI, you will perhaps not be surprised to hear that I arrived in a reflective mood. What is the DTI for? What is the role of industry policy in the last year of the 20th century and into the next? These are important questions to get right: I’ve no doubt that Government has an important role to play in creating an environment which encourages enterprise and creates wealth and jobs. DTI must be in the vanguard of change, recognising that the old way of doing things is not good enough, and the status quo is no longer an option. Between them, Margaret Beckett and Peter Mandelson set out an ambitious programme of reform. This is work which I intend to pursue and deliver. A programme based on a fundamental understanding of the role both business and Government can and should play in the economy. Businesses create jobs and wealth. Entrepreneurs take risks in the face of uncertainty and open up new markets. Governments should and must not hinder them, but work to ensure the market functions properly and contribute to a strong, just and fair society. There can be no return to the outdated interventionism of the old left. The corporate state was tried and it simply did not work. But neither did naive reliance on laissez-faire. This led to destructive individualism and a crippling obsession with what Government should not do. Now I want the DTI to play a far more positive role in the market place working with businesses large and small in their efforts to develop products, gain customers and make profits; here, in Europe and the rest of the world. A new role for the DTI to enable business to cope with a modern world. This is the model for public policy set out in the Government’s Competitiveness White Paper. I cannot overstate the importance of the White Paper as a manifesto for the DTI. 1999 is the year of delivery for the Department and the Government as a whole. For my Department that means implementing the White Paper. That is why we will publish in March a clear implementation plan to show how all 75 commitments will be delivered and on what timescale Our real task is to change fundamentally British attitudes towards enterprise and towards work. We must end the poverty of ambition that has held us back for too long.
Enterprise and responsible risk-taking The time is right to embark on a crusade for greater enterprise throughout the economy and begin a fresh campaign to encourage what I call responsible risk taking. In Government, business, our universities and schools and throughout society we must foster a new spirit, prepared to seize opportunities - to turn new ideas into successful products and services - and committed to constant innovation and improved performance. To foster a climate of responsible risk taking, we must also tackle head-on the stigma attached to business failure in this country. At present our bankruptcy laws make no distinction between the responsible risk taker and those individuals who deliberately set out to cheat their creditors or abuse limited liability. I believe that the law in this area can and should be improved and have established a working group to review our insolvency and bankruptcy laws. They will report to me by the end of April. I want careful consideration given to how we deal and protect with responsible risk takers - those entrepreneurs who have ideas, put in a lot of their own money, work hard, but for one reason or another then fail. In other countries such people are not simply written off and regarded as failures: they are regarded as people who have learned from their own personal experiences. Whilst protecting the responsible risk taker we must come down hard on those who exploit the system - often inflicting pain and financial ruin on individuals and businesses in the process. Such people have nothing but contempt for their creditors. I will bring forward legislative proposals to enable us to handle the disqualification of unfit directors more efficiently and effectively. I want an insolvency regime which is complementary to enterprise and responsible risk taking. Both to help the enterprising recover from bankruptcy and to reduce the inhibition on those who fear the consequences of failure.
Attitudes to work As a Government we are committed to getting people off welfare and into work. To do this, we must make work pay, which is why we are reforming the benefits system and introducing the Working Family Tax Credit and the National Minimum Wage. But as well as encouraging people into work, we need them to feel valued and motivated while they are at work. Our best companies already recognise the importance of committed and productive staff. I believe the Employment Relations Bill which I published last week aims to extend this culture of partnership and trust to all businesses. However, I want to give you this guarantee and assurance - we will not allow regulation to stifle enterprise and innovation. And with new rights comes increased responsibility on all employees. I do not propose that there will be a drip drip of employment legislation. That is why the Employment Relations Bill will be our final word on these matters on this side of the General Election.
Preparing for the knowledge driven economy Second, as well as changing attitudes, we must also prepare the UK to take advantage of the new knowledge driven economy. Success in this fast moving world depends critically on how well we exploit our most valuable and distinctive assets: our knowledge - including our world class science base, our skills and our ideas. The first industrial revolution was based on investment in capital and machinery. The revolution we are going through now requires investment in human capital - skills learning and education. Preparing Britain for this new world will be a great challenge, but I also believe a great opportunity. In some areas, we are already enjoying the benefits that come from successfully exploiting the knowledge base we have. In pharmaceuticals and biotechnology we lead the world in genetic and medical research. Our telecommunications industry, where a combination of market liberalisation and technological advance has created a number of world-beating businesses. Or take Nissan in Sunderland for example, Europe’s most productive car plant. This is the sort of success we need to celebrate and support. And the sort we must emulate throughout the UK economy, in all businesses large and small. Because building the knowledge driven economy is not just about creating high-tech firms, based on leading edge science. That’s a mistake too many make. Important though these industries of the future are, we must also improve the performance of older, more traditional sectors who don’t realise importance of the knowledge driven economy. The task of modernising the British economy will largely fall to businesses and individual entrepreneurs. But the Government is determined to play its part: By investing to build British capabilities - in particular our science and engineering base, and skills;
And by acting as a catalyst to collaboration between businesses, encouraging greater business to business learning and the take up and endorsement of best practice. I want to touch on four areas that I consider to be of the utmost importance for 1999.
Science Science is a major priority. It underpins our quality of life and is an invaluable source of wealth, economic regeneration and employment. Science has been neglected for far too long by successive Governments. It is a subject I take very seriously. As a Government we must not interfere unduly. We must be a supportive friend, laying down the framework and acknowledging public concerns. British science is and must stay world class. Our world-class science base is a critical source of competitive advantage - a source of ideas and skilled personnel. But let me be clear, without public confidence our ability to lead in science based industries will be put at risk. This Government is ending years of neglect in scientific research. The Government, in partnership with the Wellcome Trust will be investing an additional £1.4 billion in the science base over the next 3 years. At least half of this money will go to the life sciences. It is here, perhaps more than any other area of contemporary science, that we are pushing back the boundaries of our understanding. The development of Dolly the sheep and of genetically modified food are radical new steps which affect all our lives - and indeed the very definition of life itself. Science has the potential to revolutionise our lives. It offers enormous opportunities to improve our quality of life, in terms of health, agriculture food and environmental protection, both here and in developing countries. Our first task is to build up public confidence in science and in the response of politicians to the advice they receive. The public inquiry on BSE has highlighted the sort of mistakes we must not repeat. To restore public confidence openness and transparency are essential. I want a public debate because that is the only way we can build public confidence in science and biotechnology.
Skills Second, I am sure that no-one in this room would disagree that the UK potentially has a serious skills problem and in some sectors it is already there. A shortage of people with up-to-date engineering, electronic and leading edge technology skills. Many nations face similar difficulties. But our competitive position depends on how well we address this fundamental issue. I intend to work closely with David Blunkett to promote ideas as to how we can invest in skills as well as to create an enthusiastic learning culture in the workplace.
Europe Third, Europe. We will continue to make the case for economic reform in Europe as the basis for creating sustainable growth - and with it, greater wealth and employment. As the single currency makes markets more transparent and increases competition, the need for reform is greater than ever. We must build on the work started on liberalising product and capital markets and resist burdensome regulation of the labour markets. I also want to take my ideas about enterprise and responsible risk taking to the wider European audience. Despite what you may read in the paper, many of our EU partners are very interested in just this agenda to ensure the competitiveness in Europe in the next century. As for the UK, we must face up to the fact that the euro is here. We must rise to its challenge and seize the new opportunities it presents. First, the UK must be well prepared to deal in the euro, indeed I feel we already are.
This is vital so that British business can take full advantage of the opportunities.
Specifically, it is also vital that the City remains and is seen to remain the pre-eminent
financial centre in Europe. As for our own membership, we are convinced that "prepare and decide" is the best policy. Part of this is knowing what a changeover would actually require in practice. The Chancellor will shortly be publishing an outline change-over plan. This is sensible planning, not "making up our minds prematurely", as the eurosceptics would have us believe. It is all part of the preparation that public and private sector will need to make before we can make any decisions over membership.
Trade policy We must not lose sight of the opportunities that have flowed from the new age of globalisation. We have benefited from the integration of the international economy. Now we must manage it through more difficult times. A shared commitment to open trade and orderly progress - certainly among the G7 and in the EU - has been a driving force for growth - even in countries that not so long ago seemed permanently left behind. Now the trend is stalled, and in some places even reversed - but I believe that is a temporary setback, not a permanent condition. The essential answer to the problems of the moment is not less globalisation - not new national structures to separate and isolate economies, but stronger international structures to make globalisation work in harder times as well as easy ones. Our urgent need is closer co-operation, continuing dialogue, and an unwavering commitment to open commerce. We must not let temporary instability put global progress at risk. As the economic weather turns, as a storm in one region threatens to spread, there are easy but dangerous shelters - a return to protectionism, the breakdown of co-operation, the rise of beggar thy neighbour policies. But this can only yield further worsening of the situation, not renewed growth. Let us be clear, protectionism anywhere is a threat to prosperity everywhere. Closing off national economies only increases national and international instability. And across the world, it is the poorest, the most vulnerable members of society who suffer from financial crisis and stagnation. We will therefore continue to work for a new round of trade liberalisation and better market access for our exporters of goods and services. And in the light of recent events I can assure you that we will wish to see improvements to the mechanism for settling disputes so that we can resolve differences without recourse to damaging retaliation.
Conclusion Let me say in conclusion that in the new global economy, neither the United Kingdom nor any other country or trading bloc can afford the easy illusion of isolationism. We are all part and ultimately product of events happening in the global economy. Never in all of economic history have so many depended so much on genuine economic co-operation between the leading industrialised nations. We must never forget that the path of open trade and open capital markets that we have travelled in the last 30 or 40 years has brought unprecedented growth, greater opportunity and a better life for people across the world. The Single Market is undoubtedly one of Europe’s greatest achievements. No sensible policy-maker wants to turn the clock back to protectionism or the belief that we can operate in isolation from the very real pressures and challenges facing the world economy. To do so would be a simple recipe to export employment and growth to more competitive rivals outside Europe. But to move forward, we need active governments, acting together through reformed international institutions. For the DTI, here in the UK it means marrying together an open, competitive and successful economy which allows businesses to prosper with a just, decent and humane society. The questions are sophisticated and technical. But we must never forget that they are also human questions. They involve the living standards of people as well as the level of financial transactions. They involve not only the value of capital or trade or investment, but the deepest values of our societies. This Government believes the problems of our time can be met with a vision, an intelligence, and an energy which will make the world economy stronger, more stable, and more prosperous - ultimately more open not just to the free flow of goods, but to the rising tide of people’s aspirations. We must make markets work - in tough times as well as easy ones. That is the burden and responsibility of all of us who lead in the era of globalisation. It is a burden that this Government intends to discharge on behalf of our people and our country. |
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Other speeches by Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)
(the following are available from the archive) |
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