Department of Trade and Industry

Rt. Hon. Stephen Byers - Former Secretary of State for Trade and Industry (Dec 1998 - Jun 2001)

Asian Business Association Dinner , London Chamber of Commerce

The Savoy, London.

Wednesday, March 28, 2001

Other speeches

I am delighted to be here this evening. I'd like to thank Subhash Thakrar, Chairman of the Asian Business Association, for inviting me here this evening and organising such an impressive gathering of the London and Asian business community.

The Asian Business Association plays a crucial role in providing a strong voice for Asian business in London and the calibre and number of people here this evening underline that.

Asian businesses make a very significant contribution to our communities and to our economy.

From the corner shop, to supermarket chains, to manufacturers. In the restaurant sector. In wholesale and distribution.

I believe that the cultural diversity in Britain is a major source of strength for our economy.

In economic terms, the Asian community makes a contribution that outweighs their population levels.

Whilst ethnic minorities represent 5 per cent of the population, they account for around 9 per cent of business start ups.

And as Subhash has pointed out, Asian businesses make an even greater contribution to the London economy (19% of total number of London businesses).

The Asian community has a high ratio of self-employed people. And a high level of entrepreneurs who employ others.

Asian businesses not only contribute to the enterprise culture and to job creation in Britain, they are also an important source of innovation which is so crucial in the modern economy. Bringing forward new ideas, developing new products, processes and services.

This is a particularly apt week to celebrate Asian business success in Britain. With Asian Express publishing its list of the country's 250 top Asian entrepreneurs. Eastern Eye updating its annual Asian Rich List next month.

And yesterday S&A Foods announced a massive expansion, creating over 1000 new jobs. With an investment totalling 31 million - including 5 million of regional support from my Department.

Like so many of you here this evening, Perween Warsi, founder and managing director of S&A Foods, exemplifies the enterprise culture that we want to achieve in the UK.

A one woman operation, making samosas in her kitchen in 1986, has now grown into one of the UK's most successful food firms. With a turnover of 78 million and employing more than 1100 people.

Her success - and your success - is down to hard work, determination and the strength of the business itself. Whether a business succeeds or not cannot depend on government.

However there are steps that governments can take to help create an environment that allows people with ideas and hard work to succeed in business. An environment which helps and doesn't hinder entrepreneurs.

Our ambition is to make Britain the best place in the world to start and grow a business.

In the 1980s there were important reforms made which we've kept; some we've even built on - breaking down barriers to business.

But whatever the strengths of the 80s policy, there were two weaknesses that remained: instability in economic management and chronic under-investment in education, science, transport and the basic public infrastructure.

Our top priority has been to establish economic stability - to end the stop-go economy which has been so damaging to smaller firms in the past.

For years we had violent swings of the economic cycle. Almost four years ago now, we reformed the whole basis of economic policy-making.

We took tough decisions early on to make the Bank of England independent, to put in place a proper fiscal framework, and to pay back the national debt.

These reforms were needed to tackle basic problems which would be disastrous in any business: short termism, a lack of investment and massive debts.

Bank of England independence means that monetary policy is based on long term economic interests rather than short term political considerations.

As a result, inflation is now at a 30-year low, the lowest in Europe. Long-term UK interest rates are around their lowest levels for over 35 years, converging with those of Germany.

At the same time we have sorted out the balance sheet - paying off debt.

In 1997 we inherited a situation in which more was being spent on debt interest repayments than all the money spent on our schools. In 2001/2 we will be spending 10 billion more on schools than on debt interest.

And by making work pay, cutting down on fraud and targeting unemployment through the New Deal, we have the lowest unemployment since 1975.

As a result we are now spending less on social security benefits - freeing up money to spend on long term investment in the economic infrastructure.

So we've put our finances on a sound footing.

Having achieved economic stability we will take no risks. We will not gamble with the economy.

Building on that foundation of economic stability, we are taking action to improve the business environment and to invest in the infrastructure which business needs.

First, the business environment.

We've introduced incentives for investment and enterprise. For example we've cut capital gains tax, cut corporation tax rate to its lowest ever level and introduced a tax credit to encourage smaller firms to invest in research and development.

And we are committed to tackling red tape. I know this is something every Government says. And business always complains about regulation.

Keep complaining. We are listening.

At the British Chamber of Commerce conference yesterday I announced a number of measures to cut back unnecessary business regulations. Streamlining the employment tribunal system and cutting the costs of mergers for smaller firms.

We are also introducing new powers, through a Regulatory Reform Bill currently going through Parliament, that will enable us to strike down or change unnecessary or over-complex regulation.

At the moment getting rid of regulations requires primary legislation. That makes it slower and more difficult to tackle red tape.

The new powers will enable us to strike out regulations without the need to legislate each time.

We have already identified over fifty reforms that can be delivered using new powers in the Bill.

We also need business to tell us what regulations are damaging you most. So, as I said yesterday, you to tell us what the next fifty reforms should be.

Second, investment.

As we cut the costs of economic failure - cutting public debt, reducing unemployment, and with low inflation - we are freeing up the finance necessary to invest in the infrastructure and high quality public services that our country needs.

In particular we are investing in the building blocks for business success. I want to talk about two of those: skills and transport.

As Subhash mentioned earlier, a fast, efficient transport system is essential for business.

I know the frustration caused by the problems of recent months - especially on the railways. And the difficulties faced by commuters on the tube every day.

But the cause of these problems is underinvestment over years.

Because we've sorted out government finances, we are now able to take forward a 180 billion, 10 year programme for modernising the nation's transport infrastructure.

It will take time for the benefits to come through. But the important thing is that the investment is made - and continues to be made - to implement a transport plan which meet the needs of business and individuals.

One of the keys to securing this investment is to bring in private finance alongside public investment. That's exactly what we're trying to do in London, where we are continuing to talk to Transport for London and Bob Kiley to take forward the investment the underground needs.

In the modern economy, competitive advantage also comes from applying skills and knowledge to develop new products and services.

That means we need to invest in skills and schools.

Since coming to office we have focused on improving general standards of education, as well as increasing workforce skills.

Our priority in this Parliament has been getting the basics right in primary schools. Test results are up sharply. And infant class sizes of more than 30 have been virtually eliminated.

Secondary education is the next priority - moving beyond the traditional comprehensive to secondary schools better able to develop the full potential of each individual.

And we also need to do more to raise adult skills.

Just this week were launching the Learning and Skills Councils for post-16 education and learning.

And in its first year the University for Industry has helped over 95,000 people across the UK to increase their skills with learndirect. What's really encouraging is that between them, they have enrolled for over 170,000 courses - in information and communication technology, business and management and the basics of reading, writing and numbers - which shows that people are going back for more.

Finally I want to say a few words about business support and exports in particular.

I believe providing world class support for business is a vital role for Government. To help firms solve problems and plan ahead.

Later this week the Small Business Service is launching a 24 hour advice service for small firms.

And we are improving the quality of Business Links - with the launch this week of a new Business Link network.

Trade is a key area for business support.

That's why we have set up Trade Partners UK - to work with organisations like the London Chamber of Commerce to help businesses win in overseas markets.

The Asian business community plays a very important role in strengthening our trade ties with the Indian sub-continent.

For example bilateral trade between the UK and India alone has grown by 30% or more year on year and is now worth 4 billion a year.

We need to build on this impressive trading relationship.

Earlier this year I visited India. One of the main purposes of my visit was to strengthen the business links between Britain and South Asia. I believe that this can bring significant benefits - in terms of trade, jobs and wealth creation - for both Britain and businesses and people in Asia.

The strength of the Asian business community here gives us excellent opportunities for strengthening these commercial links.

I'm committed to helping you make the most of these commercial links, by providing better business support for Asian businesses - to help you export, to expand in overseas markets and to help smaller businesses set up and grow.

That's why we establsihed Trade Partners UK last year - providing British businesses with a single trade promotion body for the first time. Bringing together the 217 embassies, High Commissions and Consulates around the world. Linking into a network across Britain and across the world - which you can access through your Business Link, Chamber of Commerce, local export club - or via the internet.

The value of goods exported from London is higher than any other region except the South East. But we can still do better. Working through the International Trade Team at Business Link London and working with you to strengthen your links with key markets.

I am particularly keen to expand the help available to exporters at a regional level. And to ensure that this support is customer driven.

That's why we have appointed International Trade Directors in each region. And most - like our Director in London, David Train - have substantial private sector experience. Ensuring that the service is focussed on the real needs of business in each region.

Across Government we are committed to listening to all businesses. I want business people to come and talk to us. To share their experiences.

I can assure you that we do take on board what you say. Please do continue to come to us.

Learning from other communities and cultures is important. We have much to gain from the Asian business community - from its enterprise coupled with its ethos of hard work. That is why I hope that you will continue to talk to us and work with us.

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