| Delighted to be here today – one of the key days in the DTI calendar.
We knew this was going to be a tough year. Back last autumn, there was widespread pessimism about the global economy - with fears of a global slowdown or even a global recession.
These fears were exacerbated by the terrible events of September 11th. Of course, in the global economy, these events affect us all. Our economies are inter-dependent.
And Government's responsibility is to manage the consequences of these events at home; and working with other Governments internationally.
This is precisely how we responded to these troubles.
At home, we continued to maintain economic stability, ensuring that fiscal rules were met; whilst taking long term decisions to promote work and enterprise.
And, internationally, we pressed ahead with our partners in Europe on the agenda of economic reform in Europe – securing real progress in areas like energy liberalisation at Barcelona; and in taking forward trade talks following up the Doha Summit.
The risk was this wouldn't happen. The fear was that some countries would retreat into the bunkers, turn inwards – and focus on domestic concerns.
But global cooperation leads to global solutions and we are now cautiously optimistic. Many forecasters are now expecting the economy to grow faster than they did a few months ago.
But obviously we could not escape unscathed - it was inevitable we would feel the pinch.
Investment projects are down by 12% on last year's record. The total new jobs created by inward investment figure is down by 52%.
There have been no large (ie 1000+) service sector call centre projects. E Commerce projects are down from 106 to 17 and, not surprisingly, US investment – until recently concentrated in high tech and telecoms projects - has fallen from 421 projects to 288.
This is disappointing. But we should not be too gloomy.
Inward investment is geared to world economic growth. When that slows, so does new investment.
Employment overall has continued to reach increasing record levels across the economy, and is now 1.5 million higher than in Spring 1997.
And we have seen some excellent new inward investment projects over the year.
The trend to smaller knowledge economy projects, seen last year, is continuing.
For instance, iPark – a Korean software incubator in Hammersmith has provided a base for Korean SMEs to develop their business in Europe and seek strategic alliances and jvs with UK and European companies for marketing and R&D.
And inward investment in manufacturing projects is up 13% with automotive inward investment is up 38%.
Jaguar opened their new plant to build the Jaguar X-TYPE in Halewood last June creating 500 new jobs with an investment of US$423 million.
Ford at Dagenham invested about US$500 million building a hi-tech centre for the production of diesel engines – which I was delighted to visit earlier this year when I launched the Manufacturing Strategy and Automotive Academy in May.
We have also seen an excellent increase in inward investment from Asia, inc. India, China, Singapore and Korea.
We are still the best place in Europe for inward investment. We receive twice as much investment from the US as our closest European competitor.
The reason for this remains – plain and simply – Britain is still the best place in Europe to do business.
We have in place macro-economic stability – crucial to business success – and the lowest inflation and interest rates in 40 years.
We have some of the best scientists, innovators, managers and leaders in the world.
We provide an excellent gateway into Europe – because of our leading position in the EU.
I know the Kremlinologists will be looking out for any comments on the euro today.
Our policy remains the same – in principle, we favour joining; in practice it must be in our national economic interest, and the people must agree in a referendum.
The Chancellor will have completed the economic assessment by this time next year. And, need I remind you, one of those five tests is whether or not it will be good for investment for us to join.
To sum up, global conditions have made this a difficult year. But Britain has held up well. We remain the best place for investors to come to in Europe. We will continue our efforts to make Britain an even better place to do business.
|
