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Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)The Jean Monnet Memorial Lecture: "The European Patient: The Case for Modernisation and Reform" |
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Honoured to have been invited here to give the 11th Jean Monnet Memorial Lecture. Through his experiences in the second world war Monnet forged a vision of a Europe he wanted to see a of a Europe that would not only recover from the horrors of those years, not in a backward way, but in a way which would build an entirely new future. As we gather here today, it is a fitting tribute to Jean Monnet that the European Union has become a powerful economic force for stability and economic growth. It is the strength of the European Union that has brought together Europe across the divides that have parted us for too long. We now need to take the next major step to make Europe the most advanced knowledge based economy in the world in the 21st century. I am certain that my theme, Reform in Europe, is one which Monnet would have welcomed as one of the greatest European reformers of this century. I want to use this speech to explain why I believe Europe needs economic reform. What we need to do to achieve that economic reform. In particular I want to look ahead to the Lisbon Special Summit next year. A summit on Employment, Economic Reform and Social Cohesion. We want to see something forward looking not negative and backward looking coming from this agenda. The Government and I personally believe that it will be a defining moment in the future of Europe. The forces of conservatism exist in Europe as well as the UK. Our agenda of modernisation and reform is as relevant to Europe as it is here. We need a Europe which is forward looking, which has the confidence to embrace change. A Europe which supports innovation, enterprise and the entrepreneur. We must look to creating the jobs of the future rather than propping up the jobs of the past. Europe: benefits for UK/economic inter-dependence Every one of us is touched by Europe. Overwhelmingly the effects of the UK?s membership of the European Union have been for the good. Europe is where Britain sells its products. The Single Market has opened up a vast pool of consumers to British exporters. The share of our exports going to EU markets has grown rapidly since we joined the EC. It was 35 per cent when we joined in 1973; its now 50 per cent today. Worth some £120 billion a year. If you look at our exports we export more to Luxembourg and Belgium that we do to Japan; more to Italy and France than to the whole of North America. And with that trade has come hundreds of thousands of jobs. The increased competition which comes from companies being able to trade across Europe has also benefited consumers here in the UK as well as Europe. At the same time, our position as the gateway to Europe for countries outside the Union has helped us to secure large sums of inward investment to the UK. Any inward investor will tell you that their decision to invest in Britain relies on two key aspects. First, our modern, flexible economy. But also on our membership of the world?s largest single market. There are nearly 380 million consumers in the European Union and with enlargement there will be 100 million more in the next 5 to 10 years. They are the prize which attracts the likes of Ford, Toyota, Nissan. Last year alone inward investment into the UK brought nearly 50,000 new jobs. But while we enjoy the best of what our membership of the EU has to offer, we must ensure that we put ourselves in a position to influence Europe?s future. Changing European scene There is no doubt that Europe is changing. We know that the introduction of the euro at the start of this year will change, perhaps radically, the way eurozone companies do business. It will highlight in a stark way price differences. Markets will open and grow as the significance of national borders for business further decreases. And the arrival of the euro has enormous significance for us in Britain. Not just in a party political sense and tonight is not the time for party political points. But over 50% of our trade is with euro-zone partners. Anyone who imports from the eurozone, who exports to the eurozone, who is in a supply chain in which there is the slightest link to the eurozone will be affected. And we hear more and more reports of companies to tender and do business in euros, as seen in the announcement by Rover BMW as one example. But to succeed the euro must be the currency of an economy which allows it to. An economy that is dynamic, responsive and ready to embrace the challenge of the knowledge revolution. Economic reform is therefore vital to the success of the euro. Now, you?ll be aware that the UK Government?s position on the euro must remain to prepare and decide. Our intention is clear. We should join a successful single currency if the economic conditions are met. The Prime Minister and the Chancellor will be attending the launch of Britain in Europe tomorrow. That?s not just about the Single Currency, but also the wider benefits of EU membership. The euro is not the only factor driving change in Europe at the present time. Increasingly Member States have begun to recognise that without structural reform Europe will be unable to compete effectively in the global economy. A recognition that Europe needs flexible, strong and open markets if its companies are to improve their competitive position and create new jobs. Member States are also beginning to see that the future of Europe depends on our small businesses - the engines of job creation and economic growth - not just here in the UK, but throughout the EU as a whole - and that we need to create the best possible environment to help them grow. Hand on heart, some countries have not been helpful to small business. And of course, we now have a new Commission. I was in Brussels on Monday and I was impressed with their desire to move on. I am confident that with Romano Prodi at the helm we will not only see much needed reform of the Commission, but that we will have a powerful ally in our aim for economic reform. Economic reform/Single Market This Government strongly supports economic reform in Europe to boost job creation, improve the flexibility of markets and to ensure that the Single Market works effectively. The process of monitoring and taking forward economic reform agreed at Cardiff Summit during the UK?s Presidency - our agenda - is highlighting areas where the Single Market is not working well. We need to make more progress in opening up services markets, liberalising utilities, reducing state aids. Thanks to our positive approach to Europe, increasingly our European partners share our view that we need to look at an open and positive way at the changes that need to take place. We will not seek to disguise the problems. We will seek to resolve them. But this is only possible if we all approach European issues with our eyes open and our minds free of dogma. We are developing new ways of doing things in the EU. The Single Market programme was about achieving market opening through legislation to bring down internal barriers. And this approach remains important in a number of areas. Governments around Europe increasingly recognise that legislation and harmonisation are not always the answer we need. What has struck me in my discussions with my European counterparts is a growing recognition of and an emphasis on learning from each other to develop better national policies rather than dictating through EU legislation. Through this process of peer review, we have the opportunity to influence the way others work and to speed up the process of economic reform. We can also learn from our partners in Europe. This will mean more competition, more choice, lower prices and a still better deal for both consumers and business. Many Member States support this agenda. But it is important that words, and commitments and protocols agreed must be followed by action. We cannot for instance talk about reform and meeting the challenges of a globalised world until all Member States agree to embrace reform in fundamental areas such as energy. The cost of energy in Europe is much higher than in the US and elsewhere. We need the benefits of competitive energy markets if Europe is to compete globally. Our experience in the UK is clear that open, competitive, properly regulated markets reduce prices: the more open the market - the greater the pressure on prices. In the UK markets, as a result of increased competition we have seen gas prices reduced by over 40 per, electricity prices by 20 per cent. At European level, the Electricity and Gas Directives have put the framework for market to be opened up. But more needs to be done. I am pleased to say that my German and Italian counterparts agree. I have recently issued joint statements to this effect with Werner Müller and Luigi Bersani that we must make the European Single Market a reality for energy. Some are more reluctant, but I hope that they will see the advantage of a fully open energy market in Europe. Enterprise/Knowledge Driven Economy Opening up markets and bringing down energy prices through increased competition will also have a crucial and positive impact on the competitiveness of our small businesses who at present cannot negotiate the same favourable terms as larger companies. If European countries are to meet the challenge of sustainable growth and employment we must deliver a positive environment for our entrepreneurs. For me, as Secretary of State for Trade and Industry, the agenda is clear. We need a business culture and tax environment which encourages and rewards what I call responsible risk taking. We need better access to finance so that small firms in Europe have at least as good access to private capital as their counterparts in the United States. And this will be a real challenge to the banking system here. They have a culture - and you can?t blame them - of being risk averse - but because of that many potential businesses don?t have support. Through all of this we must ensure that our businesses are not burdened with unnecessary regulation. This is the real issue as far as the Commission is concerned. I want to see all new European regulation independently appraised for its impact on small businesses and certified as being small business friendly. I think this would make a real difference to small businesses here and in the whole of Europe. Social agenda At the same time we need to ensure that the employment opportunities created are matched with social justice. As the late John Smith said, there is no conflict between economic efficiency and social justice - they are two sides of the same coin. Job creation and full employment must be the priority. Across Europe, Governments share the objective of beating unemployment and ensuring social justice is delivered. Combating social exclusion is one of the most important issues that faces Europe at the present time. We need to ensure we deal with the issues that face us all, including those currently marginalised or excluded from society, or who are discriminated against in different ways, to ensure a genuinely inclusive society. We need an agenda that maximises the opportunities for citizens to earn their own livelihood and provide for themselves and their families. This allows them to play a positive role in society and the best way to combat social exclusion. Studies by the ECB, the OECD and others underline the need for structural reform of Europe?s labour markets so that more growth leads to more jobs. The procedures agreed at Luxembourg on the Employment Guidelines are a good start in this reform programme. They are a move away from the old approach of regulation. It is right that we have minimum standards in the workplace, but it is also right to take account of the diversity of approach in Member States and their political and social traditions. Benchmarking and learning from each others? experience have a large role to play of course. And we need a greater emphasis on achieving common goals with a diverse range of means which actually work with the grain of national traditions. It would be the worse thing possible to impose from an EU level an approach which overrides national traditions. We now need to strengthen this process to have more focused Employment Guidelines. They need to be developed to evaluate more rigorously the impact of social and other policies on employment and measure how these contribute to social inclusion. We need to do this at the same time as improving the conditions for businesses and entrepreneurs to create jobs. A vital improvement is to systematically review national and Community laws and regulations and to take away those that inhibit employment. Lisbon Summit We cannot afford to stand still. We need to take action if we want the EU to catch up not only with the United States but to become the most advanced knowledge-based economy in the world in the 21st century. That?s the challenge that Europe faces and I believe can meet. But it can?t do the same old things. There needs to be change. We need to see Europe in a global context, benchmarking against the very best. We need to learn from our competitors and identify the actions we need to take to become world-beaters and create world class companies. We have an historic opportunity to push the agenda forward at the Special in Lisbon next March . The Summit will give us an opportunity to draw a line under the old approach of Governments telling business what to do through a mass of red tape and regulation. To concentrate our minds on what creates jobs rather than on what destroys jobs. We need to look to the jobs of the future rather than propping up the jobs of the past. We want to make economic reform, employment and the knowledge-based economy the central themes of the Lisbon Summit. That will be the objective that the UK Government will be pushing for a commitment to action for small firms. And we want the Summit to agree an action programme for enterprise which will rival the impact of the Single Market programme of the 1980?s and in the process create a world-beating environment for small businesses. And some might see this as an Anglo-Saxon wish list. But I am struck by the support this agenda has received around Europe. Of course there are still differences of emphasis reflecting long standing national traditions and concerns, but many Member States have embraced the agenda. There is a real debate and Britain is at the heart of it. Not leading it, but at the heart. Our agenda is winning in Europe because we are working to build alliances. We are working with the French on our shared desire to build a better environment for small businesses. With the Spanish on market reforms. With the Germans on innovation. With the Italians on jobs and education. With the Swedes on social exclusion. And within the Commission Romano Prodi recognises that modernising Europe?s economy today means more European jobs tomorrow and shares our emphasis on the need to continue developing the single market and building the knowledge-based economy. There is no future in a stand-still Europe. The Lisbon Summit gives us an once in a lifetime opportunity to shape these themes into a programme which will drive us forward towards a Europe which is open, free from burdensome regulation, highly competitive and dynamic. A Europe which can decide it own way in the future or if it wants to cling to the past. At Lisbon there is a chance to show the way forward. We need to set out a clear path to making the EU the most advanced knowledge economy in the world in the 21st century, providing the highest quality of life for all our people and employment opportunities as well. I believe that Britain?s active engagement in Europe was essential in launching the process of economic reform. By working closely with our European partners and the Commission we have been able to pioneer new approaches aimed at strengthening Europe?s competitive position. And only by staying engaged can we make the case for reform in Europe. To turn our backs on Europe would be a betrayal of every British citizen. Millions of British jobs depend on Europe. And every one of us has benefited in some way from membership. Those benefits can grow, but only if we continue to be an active partner. Shaping the agenda. And really having influence on the outcomes. The questions we face in the next few months will be difficult and complex. And we will need to remember that the questions have human consequences on families and communities. And remember that economic reforms will affect them. I?m sure Jean Monnet would have approved of our agenda for reform. But changes are never easy. It is the challenge for Governments in the last months of the Century to lead their people through change. And I am sure the Governments of Europe will discharge that duty through a process of modernisation and reform. |
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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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