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英国首相布莱尔98系列演讲之Speech at the Opening of AVCO Trust - 16 September

2006-05-26 15:18

Prime Minister's statement at the opening of the AVCO Trust

Wednesday 16th September 1998

  I want first to congratulate everyone involved in this project, in bringing this business and new jobs to the region, and to Doxford Park. cEveryone involved has worked hard to secure this development - the Government office in the North East, the Northern Development Company, Sunderland City Council, and the local TEC. A development which will see 220 jobs to start with, rising to 300, is clearly welcome.

  First, I want to say something about our own and the world's economy.

  The balance of risk in the world economy is shifting - with the slowdown in demand in a number of countries, especially Asia. We are working with our international partners in G7 to address the current difficulties and respond to the challenges now facing the international financial system. That's what the G7 statement issued on Monday was working for. That's what Gordon Brown is working for today in Japan. That's what we'll be doing at next month's Finance Ministers' meeting in Washington. These are problems that can only be addressed together.

  While I accept this is no consolation to people who suffer the shock of unemployment, it is important to get the situation in perspective. Over the past 16 months, employment in Britain has risen by almost 400,000. Unemployment has fallen by over 300,000. Unemployment in the North East has fallen by 14,000. Today's figures show that despite the difficulties in some sectors, the economy as a whole is still expanding and generating new jobs. At the same time, there are welcome signs that earnings growth is slowing. 10,000 jobs have been either created or saved by inward investment in this region. In the EU, Britain continues to have the lion's share of such investment. The economy is set to grow by 2 - 2 ???? per cent this year.

  No-one is predicting negative growth, certainly on the basis of domestic economic conditions.

  Interest rates have risen 1.5 per cent since the election. Long term rates are at their lowest for over 30 years.

  So let us confront our difficulties but not exaggerate them.

  Second, there are two problems we face.

  One is the change in world economic conditions. This change affects all countries.

  Asia, once the tiger of growth, is deep in recession. Indonesia's economy alone is shrinking by 15 per cent this year.

  Japan is in recession.

  Russia is in crisis.

  Latin America faces severe difficulties.

  We will do what we can to co-ordinate our international response to this situation. And we have already started on this.

  But let us not kid ourselves. In certain sectors there will be an impact.

  Since 1996 the world semiconductor market has slumped. Prices have fallen from $45 per unit to $1.50. It was thought this might be temporary. Now, following the Asian woes, it is clear it isn't. As a result, companies in this sector have been closing and cutting back around the world. In Germany the USA and in Japan. Fujitsu and Siemens were two casualties of this change in world conditions. As they made clear, world conditions, and those alone, caused these closures.

  It would be totally dishonest to pretend Government can prevent such decisions. I do not intend to do so.

  In these cases, the Government's response must be to help people find new work or a new buyer for the plant.

  But for people to make capital out of it by pretending that it is to do with domestic policy here in Britain, is to mislead the very people we need to help.

  The other issue some parts of industry face is, or has been, the value of the pound. Here, I accept entirely that this is influenced by Government decisions. But let us again get some facts straight.

  The issue here has not been the level of interest rates in themselves, but the effect of interest rate policy on the level of the pound.

  How did we get here?

  The answer is: in 1996 the previous Government failed to raise interest rates, though warned to do so by the Bank of England because inflation was back in the system. As a consequence, the financial markets, seeing inflation was back, moved into the pound on the basis that interest rates would have to go up after the election no matter who won.

  So the pound went upwards. In fact, the pound when we took office was roughly at the same level as now. But since it was clear inflation was a problem, the pound continued to rise in anticipation of further interest rate rises. As I said repeatedly, it was only by taking the tough action quickly, as we have done, that we would be able to see the pound find a different level.

  So it has proved. The pound has moved off its 3.10 Dm peak and is now back down, though still high for some of our exporters. By contrast, the pound to the dollar has remained fairly constant throughout, and if interest rates peak at 7.5 per cent that will be a considerable achievement.

  So I understand the problem the level of the pound has caused.

  But here, no matter how difficult, I must say to you in all candour, we will stick to our policy: if we had not taken action, or even worse if we had tried artificially to devalue the pound, as the Conservatives wished upon us, it would have been a disaster. There is only one way through this. To lay the foundations of strong growth for the future by monetary and financial discipline. We have set a tough inflation target. We are now meeting it.

  We have set tough new fiscal rules. We have cut borrowing drastically and we will stick to these new rules.

  And, although interest rates of 7.5 per cent are higher than many would like, what a contrast with the early 90s - the last time a Government lost its grip on inflation and debt - when we ended up with 15 per cent interest rates, a 7 per cent fall in manufacturing output, one million jobs lost, record borrowing and repossessions.

  No return to boom and bust. This is what we said, and that is what we will deliver.

  Then, on this foundation, we can tackle the real underlying weaknesses of the UK economy. Poor productivity and investment. Hence our programme for skills, education, technology, trade businesses, science and innovation.

  It is long-termism in action.

  And despite the problems, we are seeing that here in the North East. In Doxford Park, which now accounts for 3,000 jobs - with job numbers set to double over the next two years. And in the region as a whole, which has made the adjustment from a region of steel, of mining and of shipbuilding, losing 55,000 jobs in primary industries and 81,000 in manufacturing in the 15 years up to beginning of last year, to a region which has seen 70,000 new jobs created in recent years by inward investment.

  And let's be clear, inward investment is still important. In the past 18 months alone, inward investors have created almost 3,000 jobs in the North East, and safeguarded the best part of 10,000 more. So yes, jobs have been lost, but jobs are being created all the time.

  Look at a company like Nissan, which I visited this morning. A huge success story. The most productive plant of its kind in Europe. Productivity levels which are amongst the best in the world. A major exporter, with the new model, the Almeira, set to come on stream in the year 2000. Jobs. Investment. Commitment. Energy. Achievement. Nissan shows what can be done.

  But it's far from the only success story. Look at companies like Black & Decker, at Spennymoor. BASF of Germany. Primex Plastics of the US. Perlos of Finland. Avco here today. Companies like these are still showing how important inward investment is.

  But that isn't to say that I don't know the Siemens and Fujitsu decisions have been a blow. They have been. So too have been the decisions by Groves here in Sunderland, and now the threat to jobs at Vaux Breweries.

  We can't, as a government, do much about the twists and turns of world markets in an increasingly globalised economy.

  But we can do something to help the hurt. We can do something to help people who I know will be determined to help themselves. Following the CSR, ??100m of new funding is being allocated to the North East RDA under the Single Regeneration Budget over the next three years. Ministers will be working closely with the North East Regional Development Agency to promote the region as a site for new inward investment, to help companies already based in the North East improve the skills base and regenerate depressed areas.

  In addition we are putting together a new Government initiative to help people when big redundancies hit, as they are bound to do from time to time. An extra ??38 million will be split between extra, further and higher education, re-skilling programmes run through the RDAs, and we will be setting up, in every part of the country, Rapid Response Units to get help fast to people losing their jobs in big closures, help above all with funding new jobs and training opportunities.

  Our new Rapid Response Units will build on what we've been able to do for people at Siemens, and at Fujitsu. Offering people help when they need it, where they need it. These won't be plans devised far away in London. Each Employment Service, in each region of the country, will be able to deploy help where it's wanted. On the ground. At local level, where and when the blow falls.

  So if a company announces big closure plans, our Rapid Response Units will move in. They will set up temporary job centres at companies facing major redundancies - job centres on site, where people can get to them.

  They will offer fast-track help to claim benefits to which people hit by big redundancies are entitled. They will offer everyone affected the help of a personal job adviser, to give the best guidance on job opportunities. There will be immediate eligibility for training opportunities, including our New Deal programme, which is helping 250,000 young people get off welfare and into work.

  There will be advice on self-employment - on starting your own business. And there will be help straight away with the costs of travelling to job interviews, rather than waiting around for as long as 13 weeks to get such help.

  This is practical help. Help that will assist people to weather economic storms and to get back on their feet again, as quickly as possible.

  This dual strategy - pursuing the policies for long-term economic stability, and improving the way we respond to the disturbances that are bound to happen in the new globalised economy - is what is required as we modernise and strengthen our economy at home at a time of great instability overseas.

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