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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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My Lord Mayor, my Lords, Ministers, Aldermen, Sheriffs, Ladies and Gentlemen. It is a great pleasure to be with you for my second Trade and Industry dinner at the Mansion House. Tonight I want to talk about the challenge and opportunities that come from globalisation and how we need to embrace change and push through economic reforms both here and in Europe if we are to meet the challenges that lie ahead. There can be little doubt that we are witnessing a fundamental shift taking place in our economy and in our society. In this context, this Government?s partnership with business is critical to national prosperity. Business needs to be confident and profitable to create wealth, maintain and generate jobs and support sustainable economic growth. It is the private sector that will be at the forefront of wealth creation and employment generation in the 21st century. That begs the question, what is the role of Government in this situation? I believe it is in promoting competitive markets, encouraging long-term research and investment and helping to equip citizens with skills they need to succeed in this modern economy. Dynamic markets and international competition will be vital spurs to economic growth and innovation. This new economy, which we are witnessing at the moment, has as its cornerstones knowledge, skills, innovation and enterprise. The main source of value and competitive advantage in the modern economy is human and intellectual capital. For most of our history wealth and power has come from the control of physical assets - land, raw materials, coal, iron and steel. In this, the 21st, century it will come from human capital. Knowledge, skills and learning will be the priority. It also means that a whole range of new policies and approaches are needed to promote a more enterprising knowledge-rich economy. Knowledge can be not only empowering and liberating but also a source of economic well being. That is why our agenda in Government is founded on empowering people through education, learning, and the development of skills. We also want them to raise their sights, to collaborate, to compete, to share ideas and also to take responsible risks. If we look around the world today there is one main character of the global economy. That character is change. The force of change outside our country is driving the need for change within it. The market can be a good servant. We must make sure that markets work effectively. This means having a strong and robust competition policy and consumers who are well informed and confident. The market left to its own devices all too often fails to educate or equip individuals for this world of rapid change. We can only do it together - Government and business, to deliver the skills and equip the people for the challenges we face. Just over half way through a Parliament is often the most challenging time. Voices call for consolidation and even a reconsideration of our objectives and direction as a Government. But this is not the time to stand still. Indeed it is the moment to push forward on our agenda of modernisation and reform. Whether it?s here in the UK, in Europe or on the global stage. If the world changes but we as a political party hadn?t changed, then we become redundant. Our principles become dogma. That?s why as a party we have changed. In Government we have demonstrated the nature of this change. Not to betray our principles but to see them implemented. Not to lose our identity but to keep our relevance. It is because of change that I believe we are a progressive force and not an historical footnote. It is only by governing as New Labour and continuing to govern as New Labour that we will be more than a one term government which shines brightly at the beginning and then ends in disappointment. There can be no distractions and no diversions. Our objective must be a dynamic knowledge based economy founded on empowerment and opportunity. Where government enables but does not dictate and the power of the market is harnessed to serve the public interest. The challenge for public policy makers is how to prepare Britain for a world in which knowledge will be the new currency. Successful economies and societies will be those that can adapt to the demands of such rapid change, that are flexible and creative and manage change rather than being submerged by it. That find ways to include all their people, not just a few. An approach built around a new coalition, but with clear objectives: to create a better standard of life for our people, to ensure British business succeeds at home and abroad, and to tackle exploitation and social exclusion in all its forms. An approach which recognises that the role of Government itself has fundamentally changed, but that we still have a critical part to play in improving the performance of the British economy and in improving life for all. First and foremost, we need to create a stable macro-economic environment, ending the wealth destroying cycle of boom and bust that has dogged Britain since the end of the second world war. Stability matters more than ever in the new economy of the 21st century. Because more than ever businesses need to invest in knowledge - be it through R&D, or through training, as well as taking reasonable risks to stay ahead in fast moving markets. We can ill-afford this vital investment to be put off through fears about the economy and its long term stability. That?s why we took action early in Government over the setting of interest rates and put public finances on a firm footing. But getting the infrastructure right is only the beginning. There are two areas of particular importance - how we can create competitive markets and how we can foster enterprise. As the world opens up British firms will only succeed in winning market share if they have access to those markets and the capability to compete. Opening up markets is one of my priorities - we are driving this forward in the UK where for example we are now ensuring that there is full competition in electricity and gas supply. We need to open markets in Europe as well. I?ve been at the heart of the campaign to make the single market a reality. There must be a single market in all sectors and in all countries. And yes, that includes the energy sector in France as well. Within markets, competition will always be the greatest spur for innovation and the provision of genuine consumer choice. That is why we are putting in place the most open and effective competition policy this country has ever seen. Not only is competition the best guarantee of proper reward for innovation and hard work but it also offers the best prospect of a better deal for consumers through lower prices and greater choice. In order to ensure that competition will be encouraged for the long term needs of the economy, the public and British business we will see the introduction of the Competition Act in just four week?s time. We are also opening up the utilities, consumer goods, financial services and many other areas to even greater competition. Just as the days of uneconomic State subsidies and picking winners by Government are over, so if there are barriers to competition we will tackle them as well. We do so in the interest of the consumer, and in the interest of business as well. As you know, consideration has been given under the Competition Act to the way in which the Director General of Fair Trading will impose penalties on undertakings which fix prices or share markets or seriously abuse a dominant position. We?ve made it clear that the level of penalty will need to be decided on a case by case basis. In considering this issue I have been struck by the considerable success the US Department of Justice has had in uncovering cartels by offering immunity from penalties to those companies who disclose the existence of cartels which they have been a member of or involved with. I believe that we should offer complete immunity from penalty to a member of a cartel who is the first to come forward to reveal its existence. I believe this approach would play a key part in ensuring we have fair and effective competition. But if firms of all sizes are to realise their full potential they must master the art of innovation. Knowledge needs to be created, located, adapted and exploited. In a world where product lead times are becoming ever shorter, companies need constantly to develop and adopt the best products, techniques and practices available to them. A measure of the importance the Government places on this is the increase in the science budget of £1.4bn over three years. Also in DTI we have increased our innovation budget by 20%. But those are only the headline measures. The budgets are important, but we need to do more still. If we are to exploit the potential of our companies and our people to the full, then we also need to see a revolution in attitudes. There is a great British tradition of praising the plucky loser and then decrying those who are successful. There is also a tendency to look down on entrepreneurs. I am encouraged by the fact that the younger generation coming through appear to be both far more ambitious and far more excited by the idea of pursuing business prospects. What we need to do is to promote this greater enthusiasm for enterprise and hard-work across all ages. Too many still conform to the old stereotype of the British preferring people to fail than to achieve genuine and deserved success. Clearly shifting British culture onto a more enterprising and less risk-averse track will take time. But we must all aspire to change the national mood if we are to create an outward looking, confident society, fit for the 21st Century. But it is not just here in the United Kingdom that we need to see a change of attitude - it applies to Europe as well. At the end of March a special meeting of the European Council is to be held in Lisbon. This will be a key event in the political direction of Europe. The Council will need to consider how the European Union is to respond to the new economy, an economy based on globalisation and rapid change. In some member states change is already slowly beginning to take place as a result of globalisation. Just before Christmas the German government announced a budget which introduced cuts in income and corporation tax. But it is clear that for the European Union a new approach will need to be adopted. At Lisbon the countries of Europe will have to confront a stark choice. In modern times an economy must be based on innovation and knowledge if it is to provide the wealth and growth on which we all depend. Europe is lagging behind in this respect. Members of the European Union will need to embrace a clear programme of reform. The question for Europe is clear - can it take on and confront the attitudes and interests of the past and move decisively to gain a lead in the new economy and industries of the future. If it does it will make a big difference to British attitudes in relation to Europe. Europe must do things differently. It must deliver a positive environment for our entrepreneurs. There must be a recognition that regulation can be a barrier to economic growth and job creation. Europe needs to cut start-up costs for new businesses. It needs to create a business culture and a tax environment which rewards responsible risk taking. Europe needs better access to finance for small firms and high growth companies. We need to ensure cheap, fast, reliable internet services to support e-commerce - not just here in the UK but across Europe as well. Above all else, Europe needs to be more forward looking. Working to an agenda - our agenda - of education, enterprise and innovation. To make sure that the knowledge based economy is actually a bringer of opportunity and not a threat to our people. Such a programme would be good for Britain. It would be good for Europe as well. To achieve this Britain needs to be fully and constructively engaged in Europe at all times. In our dealings with Europe we must always act in the national interest - the British people would rightly expect nothing less. This must also be our approach to the single European currency. There is endless speculation about the government changing its position on the euro. That we?ve gone cool on the idea or that we?ve become more enthusiastic; that the brakes have been applied or that the foot is now hard down on the accelerator. This all makes for good copy in newspapers but the reality is that the policy remains the same. It was set out by the Chancellor in October 1997 and was restated by the Prime Minister just twelve months ago We want the single currency to succeed. It is in the interests of Britain and Europe to have a successful single European currency. The determining factor underpinning any government decision is whether the economic benefits from the UK joining are clear and unambiguous. Because of the importance of the issue, any decision to enter must be subject to a referendum of the British people. It would be wrong for any Government to bounce the British people into a referendum on the euro in the immediate aftermath of the next General Election. A clear distinction must be drawn between the general election and any referendum. For this Parliament the policy is settled. The policy is clear. Britain should be part of a successful single currency provided the economic conditions have been met and the people give their consent in a referendum. But the five economic tests laid down by the Chancellor have to be met. We will consider if the five tests have been met early in the next Parliament. If they are satisfied then we could join a successful single currency if that is what the Government, Parliament and the people decide. Throughout, putting the interests of our country first and providing the British people with the opportunity of exercising a genuine choice. Lord Mayor, this is an astonishing age of possibilities. Only twenty years ago phone conversations travelled by copper wires which carried less than one page of information per second. Today, a strand of optical fibre as thin as a human hair can transmit in a single second the equivalent of over 90,000 volumes of an encyclopaedia. And there could be more innovation in the next twenty years than at any time in the last two hundred. The innovation rich economy requires the opportunity rich society. This is not a time for complacency, not a time to pause, it is the time to raise our sights, to broaden our horizons, learn from each other, be open to change and to equip ourselves for the challenges ahead. In the new Britain we want more enterprise, more investment, more innovation, more competition, better education and preparation for the future. I want Britain to be a world leader in enterprise - a Britain in which greater competition at home is recognised to be the key to improving our competitive edge abroad. A high investment Britain. A Britain where we reward enterprise and encourage entrepreneurship. We must have a Britain of high aspiration where the harder you work the better you do. A Britain where everyone who has talent and potential is recognised. Where everyone, whatever their background, knows they have a contribution to make. As we begin the new century we can put behind us the old British conflict between the left in politics who undervalued enterprise and the right who undervalued fairness. In the words of the late John Smith ?in a modern economy social justice and economic efficiency are two sides of the same coin?. We will only achieve this if we embrace change; to see it as a bringer of opportunity and not a threat. There will be people who will resist change. They have existed throughout history. Always preferring to cling to the comfort blanket of the status quo. It is the task of government and business to lead people through this process of change. Not backward looking but looking forward. Winston Churchill said that "those who build the present only in the image of the past will miss out entirely on the challenges of the future". I believe that government and business learning from each other can meet the great challenge of change. Not through protectionism but through openness and free trade. Not by resisting change but by equipping people to cope with change. Not by standing still but by radical economic reform. Building from a platform of stability that opens up innovation, competition, enterprise and opportunity for all. Never standing still but ensuring that we are partners in change and not the victims of change. In so doing we can be confident and face the future knowing that by government and business working together we can meet the challenges of the 21st century. And together we can discharge our responsibilities to 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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