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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)The German/British Chamber of Commerce |
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The last few months have been challenging for Europe. The resignation en masse of the European Commission last month was a fundamental event. This resignation - the right response to a damning report of mismanagement - presents a great opportunity for the European institutions and for Europe more generally. Tony Blair spelled out very clearly how we intend to respond, saying: "We must seize this opportunity to push through root and branch reform of the Commission, its mandate and its method of operation." But it is not just the UK calling for modernisation. There is great and widespread enthusiasm for giving Europe a fresh start. For not simply carrying on as before with different people at the helm of the same, and somewhat creaking ship. But to see modernised and improved European institutions. Relationship with business Today, I want to emphasise one area in particular need of modernisation and radical reform: Europe's relationship with business. This needs to be rethought and recast. Recast on the basis of a clear understanding of the roles that both business and Governments at both national and EU level can and should play in the economy. I firmly believe that the best way to address inequality and social exclusion has to be to create a more affluent, more successful Europe with opportunities for everyone to fulfill their full potential. Opportunities that come with the success of European business in our home markets and abroad. 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 contributes to a strong, just and fair society. That's why we need a new relationship which recognises the wider challenges that European businesses face:
Faced with such global instability and increasing competition, Governments cannot afford to take business for granted, to burden business with red-tape and high taxes, or to erect barriers to trade. But Government can create an environment which ensures economic stability and in which markets can function efficiently. An environment in which growth and employment go hand in hand. Economic Reform The Euro will not - as some claim - solve Europe's productivity problems and on its own improve economic performance. The US is a single currency zone, but if they do not take care to maintain their industrial competitiveness, they lose jobs and industry. So, too, with Europe. In the Euro zone and outside therefore we need to focus our energy and attention on structural reforms which make labour markets, product markets and capital markets work better. This need for economic reform is greater still as the Euro begins to bed down. The Euro of course will lower the costs of doing business and eliminate currency uncertainty, but it will also cast an unforgiving spotlight on the uncompetitive, highlighting price differences as never before. This will be good for consumers and good for businesses which rise to the challenge. And that's why winning the argument for Economic Reform is so important. Action in the UK In the UK, we set out our agenda for action in the White Paper on the knowledge driven economy. That White Paper defined a new model for industry policy working with the grain of business thinking. To invest in Britain's capabilities: our world class science and engineering base. To act as a catalyst for collaboration between businesses and between business and our universities. And to promote greater competition, the key driver to improved business performance. But our first and major task has to be to lead a crusade for greater enterprise in this country. And since the UK now does the majority of its business with the EU, we cannot, even if we wished to, simply do our own thing. I believe that Europe needs to undergo some fundamental changes to the way it treats business and enterprise, and I am heartened by the real progress made since the UK Presidency and the Cardiff Summit on changing some of the basic assumptions of our partners towards a more flexible and globally competitive Europe. The British-German Relationship Certainly enterprise has been at the heart of discussions between the British and German government over recent months. From Tony Blair and Gerhard Schroeder down, politicians and officials are increasingly engaged in active and constructive dialogue on just this sort of issue. There is a genuine appetite to learn from one another. For example, we will be organising a series of joint conferences on innovation and enterprise. These will take place in the UK in September, with a return visit to Germany in the second half of 2000. I know that the German British Chamber is closely involved, and look forward to this exercise producing real and valuable outputs. And this increasingly warm political relationship is more than matched by the strength of our industrial ties. Germany is our 2nd largest trading partner. There are major German investments in Britain, and vice versa. Long may this trend continue. With our European Partners The role of economic reform in the EU is vital to all our future well-being and I'd like to pay tribute to the German Presidency for the effort and real enthusiasm it has put into pushing the agenda forward. There is now wider agreement than ever before that we need to take a long, hard, radical and reforming look at economic policies throughout Europe. Because there is still a lot to do to make Europe globally competitive and to increase employment. The Employment Pact proposed by the German Presidency offers a real opportunity to drive the agenda forward. It is vital that within it we recognise the crucial role played by our small businesses in creating employment and that we use the Pact to help create the conditions in which they can thrive. I have three areas of particular concern: Finance First, finance for small businesses. One of the major difficulties facing any new business is access to the finance it needs to turn its bright ideas into marketable products and services. It is therefore essential that a ready supply of risk capital is available to support small businesses with the potential for rapid growth. The answer must lie in developing a European venture capital industry which can match that in the US. And in removing the barriers to a genuine single capital market in Europe, to provide low-cost early-stage finance for Europe's businesses of tomorrow. Tax Second tax. It is essential that we take no action at European level which threatens jobs or the ability of our businesses to compete in the global economy. Introducing rigid and harmonised company taxes in the EU would in fact be such a retrograde step. Tax competition has an important role to play in creating a dynamic European economy with high growth and employment. That said, there is a clear need for concerted action at the European level to deal with unfair tax practices that distort real competition. We strongly support closing loopholes, tackling unfair competition and ending unfair tax breaks. But the on-going debate around tax harmonisation is a distraction from the important economic reforms that Europe needs to take in order to move forward. Regulation Third and finally, regulation. In the UK we are redoubling our efforts to eliminate unnecessary regulation and minimise the burdens imposed when regulation is needed. We need to do the same in Europe. We must be tougher and more clear headed about what sort of regulation is acceptable and what is not. Take the labour market for example. Clearly, we need minimum standards to prevent the exploitation of the weak. But labour market regulation must assist flexibility at the workplace not hamper it, for example by supporting those that want to work part-time. And minimum standards should certainly not be used to level up standards in one country to match those in another. Conclusion In conclusion, we must ensure a modernisation of the European Commission coupled with a modernisation of the European economy. That means putting economic reform at the heart of the European agenda. Tackling barriers to enterprise, tackling barriers to employment, and freeing up Europe's businesses to create the wealth, jobs and prosperity we want for all our people. |
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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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