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英国首相布莱尔00系列演讲之Prime Minister's speech at the CBI Annual Dinner - 17 May

2006-05-26 17:20

  As the 21st century opens, the central challenge for governments the world over is how to provide opportunity and security amidst fundamental economic, social and technological change.

  Fujitsu and Siemens in the North East two years ago, Dagenham and Longbridge within the past few weeks, illustrate this change graphically. Jobs, thought to be safe for life, can go. People are expected to change jobs and to re-skill throughout their working lives. Electronic commerce now coming down the track at us will mean more restructuring; and hence more insecurity. We talk sometimes as if there were a divide between the so-called "old" and so-called "new" economies. There may be new companies. But there is no old and new economy. There is one economy and it is all subject to technological change. The new information technology is not a new economy; it is a new system of communication and it will affect traditional industry as much, sometimes more than, the newest start-up.

  All this has profound implications for the role of government and economic policy. Since coming to office, we have set a very clear course. Our job as a government is not to resist change but to help people through it. Our duty as a government is to take no short-term risks with economic stability.

  Whatever the pressures, we will not change this policy. There will be no return to massive borrowing; to risks with inflation; to boom and bust economics; nor will we pretend to people we can preserve every job or every industry in perpetuity. That way lies neither honest money nor honest politics.

  Instead we will be on people's side when they are the casualties of economic change and new jobs can be found. 95 per cent of the workers at Fujitsu are now re-employed or being retrained. The actual factory has now re-opened with a different company, employing a different workforce. Marconi announced over 2,000 new jobs in the Midlands last week. Some of those made redundant at Rover will be employed there. The major defence decisions announced by Geoff Hoon today, as well as strengthening our defences, will create or sustain 4,700 jobs. At every level, we will work as a government to help people find new jobs, to re-train them, advise them, invest in them. But we won't kid them we can stop change.

  In the same way, however hard, we will not be diverted from stability. The challenge to Government is hard choices, not soft options. Long-term solutions, not short-term fixes. Because that long-term stability is vital for business large and small, and for those hardworking families who are the first to be swept aside by the savage swings of boom and bust. You, and they, need an economy with low interest rates, low inflation, rising living standards, steady growth.

  You will always have complaints about any government but it is economic stability that you want above all else. Any party that consistently provides boom and bust has no right ever to call itself a business-friendly party. And I am proud of what the New Labour Government has so far achieved.

  Living standards are up almost 10 per cent. Interest rates are near their historical low. Long-term UK interest rates have now converged with Euro-zone rates - indeed, are slightly lower. Ten years ago they were 3.7 per cent higher. A huge borrowing requirement has been turned into a budget surplus. The national debt is down below 40 per cent of GDP and falling. Inflation has been brought under control. There are now almost 900,000 people more in work than three years ago, the highest British total ever. That is the best delivery for business and for hard-working families I can think of.

  But is has only come about through change and reform that builds for the long-term. There is no short-term way to long-term strength. It is not the work of a moment but a patient, clear step-by-step road of reform.

  To achieve this, the Labour Party itself has had to change. New Labour was the product.

  When I was growing up in politics, the choice was easily defined: the right favoured business; the left was perceived as against it. Profit was supposed to be a dirty word. Efficiency meant cuts in jobs. Entrepreneurship meant greed. But the perceived prejudices or faults weren't all on the left. For some on the right, investment in people was a social but not an economic necessity. Employee consultation was seen as weak management. The City not business was where the real entrepreneurs were. Moreover, left or right, Britain's record in economic management was poor. In the last 30 or 40 years, until very recently, Britain suffered far more violent swings of the economic cycle than our competitors - boom and bust was the norm. Budget surpluses became budget deficits with bewildering regularity. Interest rates averaged over 10 per cent between 1979 and 1997, and were worse in the 10 years before then. Inflation was an ever-present problem. Of course all countries suffered from the oil price shock of the '70s. But we fared worst.

  We are now charting an entirely new course.

  We start today from a set of simple propositions that I believe are now virtually universal in modern economies.

  1. Stability in macroeconomic management is the essential foundation for sustainable long-term growth.

  2. Monetary policy run independently of Government and fiscal prudence are the means of achieving it.

  3. The primary role of government is not industrial ownership or intervention but investment in education and infrastructure.

  4. Enterprise should be encouraged through a good climate for business and a tax system which rewards success; and an active welfare state that moves people off benefit into work.

  5. Apart from that, an economy should have as much competition and access to technology as possible.

  6. With stability, over time, has to come real improvements in productivity and investment from business itself.

  All this takes time. Such a policy is one for long-term strength. Stability will take root over time. For 100 years, Britain has educated an elite well, and a majority badly. Altering the climate for enterprise - so that young people think of business as readily as law or banking or accountancy, is a process over time, not an event or a decision. Raising productivity takes years, not weeks or even months.

  Because it takes time, there is a need for a real sense of shared national purpose in getting there. Business and Government should not just be in dialogue. We need to think it through together. Not the old form of corporatism, but a genuine partnership to make the future work for Britain.

  So: what do we need to do?

  First, we have to keep to disciplined economic management. That means saying no as well as yes to the vast number of demands that we spend public money. No sooner had we started the process of selling the broadband spectrum, than people had spent the money several times over in the name of every good cause. We have to keep fiscal and monetary policy in line with each other.

  Second, we have to raise our education and skills. That's why education spending as a percentage of GDP is now rising again. Because of effective classroom reform, the results for 11 year olds are the best ever. Places in the new specialist schools will grow by almost 25% this year and will in time make up a 1/4 of all secondary schools. Nursery education for 4 year olds is universal for those who want it, 3 year olds to follow. At least 11,000 schools are already benefiting from the New Deal capital programme. All secondary and now most primary schools are wired up to the new technology. New city technology colleges are opening up higher education to more people than ever before. But there is still a long way to go.

  Third, we have to create the right climate for business: boost entrepreneurship, ensure the tax system rewards success.

  It is true we acted decisively in our first year, sharply to reduce the deficit. I say, simply, there is no painless way of cutting a deficit. But without it, interest rates would not be at 6 per cent and we would not today have the lowest underlying rate of inflation in Europe.

  We have now balanced the budget, while at the same time cutting corporation tax to its lowest level in Britain's modern economic history. We have introduced a new 10p rate for small business. The most extensive employee share ownership scheme the country has ever had. The new R&D tax credit, coming in this year. The fuel escalator has now gone. And it is this Government, this New Labour Government, that has cut capital gains tax further than ever before. We have been listening to business. Yet, as I am sure you understand, all governments must balance a friendly tax regime for business with combating the tax avoidance that imposes an undue penalty on ordinary taxpayers.

  Fourth, we need a welfare system and labour market that is actively promoting work. There are huge changes we have made here. Over this parliament welfare spending will rise by 1 per cent per annum in real terms. In the previous 20 years it rose on average by 4 per cent every year. Even the 1 per cent rise is converted into a fall if items of deliberately raised spending, like child benefit or pensions, are taken out. Almost 500,000 people have now been through the New Deal. And the number claiming unemployment benefit has fallen by 670,000 since 1997.

  Fifth, we do need a concerted effort to raise productivity. Here let me say at once: I know how it irritates when we appear to say the pound is not a problem for manufacturers and that the answer is productivity. Let me be clear. Of course, in particular for exporters, it is very difficult to adjust to an increase of 10-20% in the costs of doing business over a short period, and raising productivity in parallel is not possible if earlier adjustments have not been made. However, the situation on productivity is changing. For example, productivity among electrical and optical equipment manufacturers has risen by 22% since 1997. Britain has some of the most productive car plants in the world. That's why Vauxhall announced earlier this month that it is going to invest a further ??189 million in the UK. For companies taking a long-term view, Britain is still the best place to do business in Europe. Despite the instability in the pound/Euro rate, UK companies are leading the world in key sectors such as telecoms, pharmaceuticals, oil and gas and the media. Business is as dynamic now as at any time in our lifetime. That achievement is in very large part down to you and the business people in the UK.

  As for the short-term pain, that is real enough. But what to do about it is another matter. Against the yen and dollar, the pound has remained stable or declined slightly. The problem is the Euro's weakness - a weakness that is not justified by any serious analysis of continental Europe's strong economic fundamentals. We have had advice from many quarters over the past weeks on how to bring the pound down. My own belief is that we cannot try artificially to devalue the currency. We have to hold to the tight fiscal and sensible monetary policy that is the best guarantee over time of the stability we all want.

  I should say, at this point, the policy towards the Euro has not changed and will not. We remain in favour of joining in principle; in practice, the economic conditions must be met. The policy on the referendum and timetable remain the same.

  People often say knowingly to me: it is the politics of the Euro that worry you - media hostility and so on - and the economic conditions are just a front for them. The contrary is true. It is a monetary union. The economics have to be right. That is why the tests we have set out are not camouflage. They are the vital pre-requisite for British participation in the single currency to be a success.

  Finally, there is the issue of regulation. Of course this is not new. It is a perennial business concern. Governments do tend, left to their own devices, to meet every problem by trying to regulate it. We have accepted that the WTD could have been implemented better and made changes. The minimum wage was implemented better. But let us not forget: Britain still has one of the most lightly regulated labour markets in the world - even compared to the US. According to the OECD we have the most lightly regulated product market. In addition, over the last few months we have:

  1. Published a draft regulatory reform Bill to streamline the process for scrapping outdated, overlapping and over-complex regulation. At present it has to be done by primary legislation. That will change.

  2. Increased the statutory audit threshold by threefold to ??1 million, exempting 150,000 firms and saving small business ??180 million a year.

  3. Tabled an Electronic Communications Bill to remove the regulatory obstacles holding back the development of e-commerce

  4. Exempted small companies from TU recognition legislation

  5. Exempted small shops from unnecessary EU requirements

  6. Agreed at Lisbon an EU-wide process to cut regulation from Brussels

  7. Put in place new systems at the heart of government to hold ministers to account for their departments' regulatory programmes

  The new Small Business Service and its Director, David Irwin - who himself has much small business experience - has this specifically as part of its remit. The new plan for deregulation in the farming industry - where the proposals go very wide - will give us an interesting clue as to how quickly we can move. But the intent is there and it is clear.

  Then, on transport. We know we need a long-term plan to boost transport services. Good infrastructure is good business. I hope by the time of the transport proposals later this year, you will see that we are serious about doing it. We always said education was our No.1 priority. But I fully intend to follow through on our commitments on transport.

  This brings me back to where I started: the long-term.

  By refusing to go for the short-term fix; by refusing to be categorised into the old rigidities of traditional left or right, we have taken a risk. The risk is that people say we believe in nothing unless we conform to those old political labels. But the risk to the nation's long-term future would be far greater if we did so: if we allowed parts of the left to push us into old-style spending that undermined economic efficiency; or the right to make investment in education or infrastructure the casualty of short-term and unsustainable tax cuts.

  I ask for a genuine partnership with you to create the long-term strength we know this country is capable of; but for decades has been unable to achieve: the goals of full employment, rising prosperity, economic strength in a world of change.

  Business can be the architects of a new and changing Britain.

  Business employs four times more people that the public sector. It is you, therefore, as much as us that determine the sort of society we live in.

  If we are to become a fairer society, then it's businesses, as much as anyone else, that can send out the right signals - promoting talented women to the boardroom, giving a chance to people on the New Deal.

  If we are to improve the quality of our lives, it is because you treat your employees well, provide a decent environment to work, decent food, decent holidays, proper time off for family emergencies.

  If we are to return to full employment it is because you, our businesses, have created new products, found new markets, improved your quality, made your prices competitive, and in doing so have expanded your companies to take on more people.

  If we are to become a greener more pleasant country to live in - it is because you, our business men and women, are using green technology, finding ways not to pollute, encouraging your employees to recycle.

  If we are to enjoy rising prosperity it is because business people have had the ideas, taken the risks, had the imagination, to set up new companies, generate greater profits, create more wealth.

  You are the key not just to enterprise but to fairness too. To creating not just a strong economy but a fairer society. That is a big responsibility. A responsibility to the communities in which you work, and to the nation in which you live.

  So let us work together, admit the problems, co-operate on the solutions.

  Yes the world poses many challenges. But I am confident that together we can meet them.

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