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Rt. Hon. Peter Mandelson - Former Secretary of State for Trade and Industry (Jul 1998 - Dec 1998)

Annual Dinner of the British / Israel Chamber of Commerce


Monday, December 07, 1998


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Chairman, thank you for those kind words of introduction.

Ladies and Gentlemen, I am delighted to be here this evening to speak to such a distinguished audience.

As I was preparing for tonight, I couldn?t help but think to myself - what would my father say if he could see me now. Speaking for the British Government to the most important annual event in the British-Israeli business calendar.

My father was well known to some of you here. Not least for his work at the Jewish Chronicle. And he must have done a good job, since the paper is going from strength to strength.

I know he would have shared my joy at being Secretary of State for Trade and Industry - a job which I am finding deeply stimulating and enjoyable. Despite all the brickbats! But you know what they say about sticks and stones...

The reason I love this job is because it is a real opportunity to make a difference.

We won?t enjoy the living standards we aspire to unless we achieve the wealth creation we need to pay for them. Not that governments create wealth. But we can, if we?re not careful, frustrate others? attempts to do so.

Our job in government, therefore, is to do everything we can to enable enterprise to flourish. That?s a simple definition of the DTI?s role.

My job also gives me the opportunity to help cement Britain?s international relations, for example, in my contribution to building what is an already tremendous rapport between the people of our two countries.

And I?m not just talking about political rapport. In fact, I?m not here to talk about politics...

This friendship between our two countries is build on much more than politics. It is based on friendship, mutual respect and admiration.

As I said when it was my great pleasure in April to speak at the Mazeltov Israel 50th anniversary event at Wembley, the achievements of the State of Israel in the 50 years since its creation are nothing short of remarkable. The young, vibrant democracy that is Israel has so much to be proud of.

And I find it touching that this weekend?s reading from the Torah was of the changing of Jacob?s name to Israel after his struggle with the angel. A story that captures so much of Israel?s own history. Of triumph over adversity.

New Labour relations with Israel

Relations between our two countries over those 50 years have always been close. Contacts in trade, and in cultural and scientific fields continue to flourish.

New Labour is particularly committed to strengthening and deepening that relationship. To building on our shared values and aims.

The Prime Minister visited Israel in April and met Mr Netanhayu again last week when he was in London.

He regrets that he will not be able to see the Israel-Britain Business Council tomorrow, but has asked me to send his warmest wishes for its continuing work and success.

Indeed I am delighted to see so many members of that business council here tonight, not least of which the two chairmen: Sir Richard Greenbury and Mr Dan Propper.

We all recognise the role that the Business Council plays in fostering a close and profitable relationship between our two countries.

Enemy Property

If you will permit me a slight diversion, I would like to mention briefly one issue concerning the Government?s relationships with the wider Jewish Community.

Tomorrow, I will be announcing the establishment of a Claims Scheme to compensate victims of Nazi persecution who had assets confiscated by the British Government during the war.

This was not a glorious chapter in our Island?s story. Fifty years on, the failure fully to restore these assets to their proper owners seems unimaginable, but at the time we failed to differentiate between enemies and victims.

Since we came into office, the Government has been determined to bring this issue to light and to achieve a just settlement. Simon Wiesenthal has said: "Half a century ago, there would have been no victory over Nazism without Britain. Last year, Britain again showed an example by hosting the international conference on looted gold.".

We shall now move quickly to put the Claims Scheme in place so that claims may be paid as soon as practicable.

A scheme based on the recommendations of Lord Archer of Sandwell - not to be confused with a certain candidate for Lord Mayor of London - who carried out an independent inquiry for the Government.

I hope that it will add to the momentum of the wave of openness and justice which has swept across the world in the last few years. The UK owes victims of Nazi persecution a debt of honour. That debt can now be repaid.

The Peace Process

And if, as a nation, we are committed to righting the wrongs of half a century ago, we are just as committed to solving today?s problems and to creating a lasting and durable settlement in the Middle East Peace Process.

We believe that the Oslo process and the principle of "land for peace" remains the best foundation for a lasting settlement that brings with it security and justice for all parties.

The signing of the Wye agreement only a few weeks ago offered some encouragement to Mr Netanyahu and Mr Arafat.

There will clearly be difficult times ahead, but we know that you in the business community will do your best regardless.

And the UK stands ready to help in this process, to support, in any way we can, efforts to bring peace to the region.

Only by following that road will Israel and her neighbours unlock the region?s economic potential.

I believe that that potential is tremendous.

Much has been achieved in so many industries - the agricultural sector, high-tech industries, science, medicine, food, fashion, the diamond and jewellery industry, biotech, computers and software and so on.

All this from very modest beginnings in the post-war period. A tribute to the inventiveness and persistence of all the people of Israel.

And with real and lasting peace, I believe so much more can be achieve.

Creating economic prosperity and the jobs and opportunities for all the people of Israel and the region, that will underpin future harmony in Israel and beyond. And I want Britain and British business to play a leading part in building that prosperity with Israel.

Israel as a potential Silicon Valley

As some of you will know, I was in the United States recently on a study trip to New York and Silicon Valley to see what the Americans are doing to foster high-tech, high growth businesses.

I was very impressed by what I saw there and took away a long list of lessons for the UK.

But one of the more striking points that emerged from my trip was the number of people in the US who saw Israel as another potential Silicon Valley in the making.

This is not some far-fetched dream.

42% of Israel?s exports are now high-tech products.

40% of the economy in high tech, leading edge businesses.

Israel is experiencing the sort of advanced high-tech, high growth revolution that I want to see happen in Britain.

You are creating the industries of the future.

True knowledge driven, technology businesses, built by ambitious, innovative, enterprising people.

Israeli business people who see the US as the role model to follow. Whose life?s dream is to float the company they have established on NASDAQ.

I want to emulate the progress you are making in this area:

I want to see a revolution in attitudes in Britain itself. We need to be more enterprising. Less risk-averse. And if we are asking people to be less risk averse we must not condemn them if they fail and we should reward them, in the right way, if they succeed.

We need to seize the opportunities of the new digital age and rapid developments in technology. To help generate clusters of high growth potential, innovative and high-tech businesses, that will underpin British prosperity and jobs in the new Millennium.

We already have a lot to shout about. Venture capital levels here are higher than anywhere in Europe. Oxford, Cambridge, parts of Scotland and the M4 corridor are all showing healthy signs of development in the new and high-tech industries.

But there is much more we can do as my Competitiveness White Paper will set out when it is published next week.

And I want to take a further initiative, together, with Israel. I want to see us working more closely with Israeli business in creating the flourishing knowledge-driven economy I aspire to in Britain.

I don?t want Israeli business men and women to have to look as far as to the United States for their inspiration or for access to markets and finance.

I want to see them developing their products in conjunction with British business. I want to see them financing their inventions and brilliant new products on British capital markets.

I know that the London Stock Exchange and its AIM - Alternative Investment Market - have made a good start. I understand there are more businesses of Israeli origin floated on AIM than any other non-British nationality - so much so they are thinking of renaming AIM, the Alternative Israeli Market, as I heard from the Duke of Kent.

But I am serious when I say, I want to see Israeli business raising more money in London. I am sure Lord Levene, the Lord Mayor of London will emphasise exactly this point when he visits Israel next week.

But as well as raising finance, I also want to take practical measures to encourage UK and Israeli leading edge technology businesses to work more closely together.

We have highly complementary skills in key and emerging areas such as biotechnology and communication and Internet technologies.

Which is why I am delighted to be able to announce this evening that Britain and Israel have agreed to support a dedicated fund, to be known as "BRITECH", to provide financial support for British and Israeli firms to work together on R&D and product development.

BRITECH is not quite as catchy a name as BIRD - the equivalent and long-standing US fund - but I?m confident it will be just as successful.

Over £15m of new money will be made available by Israel and the UK over the next five years - to be at least matched by the industrial collaborators. The potential for bringing innovative products to market is clearly enormous.

Discussion of how BRITECH will operate has yet to be finalised. But it is already clear to me that:

It must benefit small and medium sized companies - the small but growing firms and start-ups which will underpin our future prosperity.

And it must be private sector led. Strengthened by partnerships with other major organisations who value the contribution which technological collaboration can bring our two economies.

In the coming weeks, my officials and those from Israel will fill in the gaps.

But I would like to acknowledge the important contribution which the Israel Britain Business Council has played in developing this thinking.

I hope you will accept my support of BRITECH as evidence of this government?s continued support for the Council?s work.

I urge you to continue in your endeavours to find new ways to support commercial relations between our two countries.

Emulating in Britain and Israel, the success of Silicon Valley in the states.

Creating the innovative high term firms, jobs and prosperity for the future.

And contributing to deeper and stronger relationships between our two countries.

We are just approaching the festival of Chanukah - the festival of lights. A symbol of hope in adversity. That spirit of hope has been a powerful inspiration throughout the history of the Jewish people and Israel. We trust it will continue to inspire you in your search for a peaceful future for Israeli and Palestinian children alike. And in building a solid economic foundation for Israel and the whole region.
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