Below is the text of the speech made by Iain Duncan Smith, the then Leader of the Conservative Party, to businessmen in the North East on 20th February 2003.
Thank you for inviting me here today.
It’s a great pleasure to be here in Newcastle — and a privilege to be among you.
This opportunity to see what you do at Rite-Vent has been very valuable.
So let me say thank you, first, to the Directors and the workforce for making me so welcome and for taking the time to show me around.
And let me also take this opportunity while I’m here in Newcastle to say congratulations to Sir Bobby Robson and his team for the excellent result on Tuesday.
I wish them well as they progress in the Champions League and – as a keen Tottenham fan myself – I hope we’ll be joining them there next season.
Football is of course one of the things for which Newcastle is best known.
A tradition of manufacturing and industry is another.
But these are tough times for British manufacturing – and it’s companies like Rite-Vent which — in spite of the higher taxes and over-regulation Labour has imposed – are holding the line.
Last year manufacturing output in Britain fell by 4% — the sharpest drop year-on-year for a decade…
Manufacturing investment has suffered its sharpest drop for 20 years.
And the number of jobs in manufacturing has being falling every month for the past 4 and a half years.
In fact, under Labour we’ve been losing 303 manufacturing jobs every day.
Last Friday, the Chancellor said the economic boom had not come about by accident.
Britain’s manufacturers would say it hasn’t come about at all.
This gap between rhetoric and reality is the trademark of New Labour.
So what has happened under the New Labour government should come as no surprise –
New Labour was built on rhetoric.
And now we have the gap.
Labour promised innovation – and instead they stifled it.
They promised to support business – and instead they turned their backs on it.
They promised more choice – and instead they restricted it.
They promised to improve our public services – and instead they have led those services into spectacular failure in every important sector –
– our schools and universities,
– our hospitals and surgeries,
– our railways, our roads and our airports.
– 30,000 children leave school with no GCSEs.
– 60,000 care home places gone.
– longer commuting times than anyone else in Europe.
All the work they did in opposition to convince people to give them a chance…
All the good-will they were given in their first four years in power…
All the benefits of a strong economic inheritance…
Instead, we have had six years of waste and incompetence.
Take the New Deal for example:
Supposedly one of this Government’s crowning achievements, but now we see it as an expensive failure. Thousands of young people have to go through it 3 times before they find a job. Many of those who have jobs would have found them anyway.
And all this at a cost of £11,000 for every person on the scheme.
Or consider this Government’s approach to pensions:
They forced companies to take on stakeholder pensions – but the Insurers Association says that 90% of them have no members.
Worst of all, Gordon Brown imposed the ultimate stealth tax – a £5 billion a year tax raid on pension funds, which he foolishly sought to justify by pointing to the buoyancy of the stock market which he inherited from the Conservatives.
We all know what has happened to the Footsie after six years of Labour government. It has halved. But the Chancellor’s tax grab has made the prospect of retirement a source of fear and anxiety for millions of hard-working people.
Incompetence on this scale is extremely damaging.
New Labour promised to be different. They pretended to be Conservative even.
But you can’t be Conservative when your instincts are wrong.
I believe we are witnessing the slow death of New Labour.
This may be good news for those who were always suspicious of it – those on the Labour left who were prepared to keep quiet so long as they were in Government.
But it is bad news for the people of Britain who will be made to endure the pain.
Because as Labour reverts to type things are not going to get any better.
The Government is committed, now, to —
in the Chancellor’s own words –
‘vast increases’ in spending over the next few years.
From this April, the Labour Government will be spending £50 million an hour – that’s almost 50% faster than the rate of spending in 1996-97 before they came to power.
By the time of the next election, spending on the Health Service alone will have risen by 70% in real terms.
But if the record of this Government is anything to go by, then that profligacy will do little good for the lives of ordinary people.
But I’ll tell you where it does harm – and that’s when Government takes more and more money from the people, then spends it badly, and wastefully.
And boy, has Labour been on the take!
Since 1997 they’ve raised the national tax bill from £270 billion to £380 billion.
That’s £36 a week more for every man, woman and child in the United Kingdom . . .
Business alone has paid £47 billion in extra taxes . . .
And if all this spending had led to results then some may say it was worth it.
The problem is, it didn’t.
We didn’t get the results.
We’ve got little to show for the money we spent.
Take the health service.
A 22% increase in spending in the past two years alone . . .
For just a 1.6% increase in hospital activity.
So where’s the money going?
Well, for the first time ever, the NHS has more administrators than it has beds.
What a magnificent achievement.
They told us they’d create jobs – and they have.
The trouble is – you’re paying their wages.
Now — because they’ve failed to keep their promises — taxes are going up again.
So this April they’re putting up National Insurance contributions.
They’re taking another £4 billion a year from employers – which, for a company like Rite-Vent, means an added cost of around £10,000 a year.
And for a typical Rite-Vent employee it means another £100 a year.
This is nothing short of a tax on jobs – plain and simple. Overall, it’s the equivalent of an effective 3p increase on the basic rate of tax.
And what do Labour say this new tax increase is for?
To fund their new spending on the Health Service,
This in spite of a promise by Gordon Brown not 15 months ago that
“there will not be one penny more [spent on the Health Service] until we get [the] changes [that] let us make reforms and carry out the modernisation the health service needs”.
And have we got any of those changes yet?
Not if we’re to believe the Health Secretary.
Mr. Milburn told health professionals behind closed doors this week that he fears these additional taxes will be wasted.
So now we have it.
The reforms aren’t in place.
The Health Secretary thinks the new money won’t make much difference.
And the new money is simply going to go the way the same way as before – to waste.
Well, if that’s the case – and we have absolutely no doubt that it is – Indeed the government is now admitting privately what we have been saying in Parliament and on public platforms up and down the country for many, many months! –
If that’s the case . . .
Then the Government must think again, before more damage is done and scrap this jobs tax now before this spending goes the same way as the last.
I say again – we are witnessing the death of New Labour. . .
And the resurrection of Old Labour . . .
The whole, hopeless cycle of tax-and-spend-and-fail.
We have to break that cycle.
And we have to make up a lot of lost ground.
The stock market has touched a seven-year low.
For many people, retirement is receding further and further into the distance.
And those already in retirement are struggling.
Looking ahead —
The latest Mori poll of Business Confidence says 87% of you think economic conditions will be the same or worse.
The consumer boom is petering out as house prices appear to be stagnating
And consumers are confronting a very large debt hangover.
If we are to have any chance of making up that lost ground, then Britain needs businesses like yours to thrive. . . and thrive. . . and thrive!
And it starts by saying – enough is enough.
I’ve been travelling around the country every week for the past few months – and that’s what people say to me . . . enough is enough!
And enough time to deliver the results they promised.
And in consequence, enough is enough of this Labour government.
It’s time for a change.
It’s time to think differently — and do things differently.
And that will be our approach as a Conservative government.
Keith Joseph said something I have never forgotten —
“There are limits to the good governments can do, but there are no limits to the harm they can do.”
What he was doing was expressing, essentially, why we are, by nature, a party of lower tax.
It flows from our belief in smaller government, greater individual liberty, and greater personal responsibility.
It flows from our belief that governments should measure success not by how much they spend of your money, but how well – and how carefully – they spend it.
And our belief – also — that low-tax economies are more efficient, and more competitive, than high-tax economies.
A Conservative Government will not be trying to second-guess everything you do.
A Conservative Government won’t be over-interfering in the way you run your businesses.
And unlike the Labour Government, we mean what we say when we say we’ll cut red tape.
Most importantly, because we are determined to spend your money more carefully, we will take a different approach to the public services.
Last year, when I spoke of my belief in low taxes, Labour and the Liberal Democrats accused me of wanting to destroy public services.
They refused to admit that a lower tax regime means a healthier economy.
They could not grasp that it is possible to have both lower taxes and better public services.
They baulked at the fundamentally simple and sound proposition that by changing the way we run and deliver those services, we can cut waste and improve delivery.
And now, in desperation, Tony Blair ha resorted to the Labour lie that we would cut front-line services by 20 per cent. I call it a lie because it is fundamentally untrue. We are committed to our core strategy of public service reform, widening choice, rooting out waste and keeping taxes low.
What sets us so completely apart from Labour is that we understand how important it is to have a holistic approach.
Without strong businesses, you cannot have a strong economy.
Without a strong economy you cannot have strong public services.
Without strong public services, you cannot have strong businesses.
And without all these things you can’t have a strong country.
My friends, we are still some way out from an election.
Between now and that time, I and my party intend to fight this Government’s dangerous and damaging anti-business policies.
And when the election comes,
I believe you will fight for a Government that knows the real meaning of support for business, and why that is so important to Britain.