Sam Gyimah – 2015 Speech on Connecting Employers to Schools


Below is the text of the speech made by Sam Gyimah, the Parliamentary Under Secretary of State for Childcare and Education, at the House of Lords in London on 17 September 2015.

Thank you for that very kind introduction, Christine [Hodgson, Chair of the Careers and Enterprise Company].

It’s a great pleasure to be here today at the launch of this brand new programme connecting schools and employers, and young people and careers. Only this morning, I was lucky enough to visit Baylis Court School in Slough which already has a very successful careers education programme – the highlight of this visit was when a sixth-form pupil asked how she could get my job!

For too long the careers provision in schools has not been taken as seriously as it should be – instead, treated with disdain, as a kind of relic from the days before the internet put the whole world at our fingertips.

I’m sure plenty of people here have heard anecdotes about careers services in schools before – I certainly have.

Teenagers’ futures being reduced to a 20-question online quiz, a one-off meeting with a careers adviser in year 11 that feels more like a chore than an opportunity – in other words, a total lack of practical advice and personal support.

Tales of bad advice like these are all too common. I read an article just the other day about a famous comedian who told his careers adviser he liked canoeing, and was told he should join the navy

When you couple that with that the fact that an Ofsted study found that only 1 in 5 schools gives effective guidance and advice to its year 9, 10 and 11 pupils, it’s no wonder that 80% of employers think that young people don’t leave school equipped with the right skills for the workplace.

Imagine trying to study for your GCSEs, A levels or even your degree without having any idea about what your future might hold, and with no idea how the qualifications you’re working towards can shape and influence the rest of your life.

During this tricky phase of life, young people desperately need sensible, practical advice and guidance.

But I also know that good careers provision is about so much more than directing people into specific jobs.

It’s about providing that initial spark of enthusiasm and inspiring pupils to broaden their horizons – to think about the world outside the school gates.

After all, how can we tell a 13-year-old exactly what they should be doing by the time they’re 30 when we don’t even know what jobs will exist then?

Ten years ago, we didn’t know what a mobile app developer was. But now, coders are a hot commodity, working in some of the most high-profile and creative industries in the market.

What young people really need today are the building blocks to help them navigate a jobs market which is changing at a more rapid pace than ever before.

From the simple things that you or I might take for granted – a professional-sounding email address, to dressing smartly for an interview, to writing a great CV – all of these are vital components of good careers provision.

We’ve all seen embarrassing email addresses, or spelling mistakes in a job application, and I’m sure many young people have holiday snaps that they wouldn’t want their potential bosses to see if they looked at their Facebook profile – it’s all too easy to fall at this first hurdle if young people don’t have the right kind of support!

I do, however, know that many organisations across the country are working tirelessly to make sure that young people have equal access to this kind of provision at all points of their school journey.

I know that careers advisers are dedicated professionals who genuinely want young people to progress onto the best courses and into the best job.

Plenty of employers already work hard to target and support young people in their area.

And organisations like the National Citizenship Service are helping older teenagers build vital skills like leadership, teamwork and communication.

But I want this to be done consistently.

I want a strategic approach that brings all of these people and organisations together so that every single child, no matter where they live or what school they go to, has the same access to top-quality advice. That’s what this ‘one nation’ government is all about – spreading educational excellence everywhere and making sure that every young person across the country can unlock every ounce of their potential.

Because, as Christine has said previously, there’s currently too much variation across the country. Some schools benefit from a steady stream of professionals coming in to inspire their pupils, but others aren’t lucky enough to have access to these opportunities. And often, it’s pupils at these schools, in disadvantaged areas, who’d benefit most from an extra insight into the world of work.

Increasing aspirations, improving social mobility and giving everyone an equal chance at a good life can only be a good thing for the continued productivity and economic strength of our country. Outstanding careers provision has to be at the heart of this plan.

So, finally, when I think about this careers provision, and how the Careers and Enterprise Company can add the most value, I think about the importance of making the right links.

The importance of connecting employers to schools and young people, connecting schools with the best support and careers provision there is, and connecting young people’s presents to their futures.

Helping them see the value and relevance of high attainment, good behaviour and regular school attendance.

Giving them an insight into the exciting paths their careers could follow.

Fuelling their passions and their drive to succeed.

Perhaps, most importantly, teaching them the rules of the game. As I said earlier, how to choose the right career, how to apply for the right job, how to impress in the professional world.

Because I’ve never met a single young person who wants to end up unqualified and under-employed – and yet one young person not in education, employment or training, wasting their abilities and aspirations, is one too many.

So if we’re going to get careers advice right, if we’re going to harness the talent of the next generation and help young people make sensible choices about their future education and employment, we all need to raise our game.

Over the coming months, I want to see the Careers and Enterprise Company go from strength to strength, spreading what works to all schools and colleges, filling gaps and making it much, much easier for schools, employers, and careers and enterprise providers to connect.

Putting the experts in the classrooms, the people that understand business, and careers opportunities in the local area and beyond.

In turn, I want to see all of those companies who have said time and time again that school leavers don’t have the right skills for the workplace step up and help to solve that problem.

Of course, some companies are thinking about this already, but many more can consider offering work experience placements, sending staff into schools, mentoring pupils – there are so many ways to help bridge the gap between education and employment.

I’ll leave you now to hear more from Claudia (Harris, CEO of the Careers and Enterprise company) on the Enterprise Adviser programme, but before I do, I want to thank all of you for all of your work so far. I’m confident I’ll soon be hearing great things and glowing reports as schools and pupils start to benefit from this new service.

Thank you.

Gordon Brown – 2007 European Council Statement


Below is the text of a statement made by Gordon Brown, the then Chancellor of the Exchequer, in the House of Commons on December 17th 2007.

With permission Mr Speaker, I would like to make a statement about the European Council held in Brussels on 14 December, which focused on two major concerns:

1 – The reforms Europe must make to meet and master the global challenges we face – for competitiveness, employment, secure energy, climate change;

2 – And issues of security – in particular Kosovo, Iran and Burma – that we must confront together.

I start with the most immediate concern facing the summit: the best way to bring about a satisfactory resolution to the status of Kosovo.

Kosovo is the last remaining unresolved issue from the violent break up of the former Yugoslavia. And in light of the recent failure by the parties in the Troika process to find a negotiated way forward, the European Council accepted its responsibility for joint European action and agreed the importance of moving urgently towards a settlement.

It is to the credit of all parties in the dispute that even when faced with conflicting positions the region remains at peace. And, as the European Council conclusions noted, it is essential that this commitment to peace is maintained.

The principles of our approach are: first, that Europe take seriously its special responsibility for the stability and security of the Balkans region. Indeed it is thanks to the sustained efforts of NATO troops and the diplomacy of the United Nations and the European Union that a safe and secure environment has been maintained.

But, second, we were agreed that the status quo is unsustainable and that we needed to move forward towards a settlement that ensures what we called a ‘stable, democratic, multi-ethnic Kosovo committed to the rule of law, and to the protection of minorities and of cultural and religious heritage’.

And third, after a detailed discussion at the Council, we were also wholly united in agreeing that European engagement should move to a new level. We agreed in principle and stated our readiness to deploy an ESDP policing and rule of law mission to Kosovo. This will consist of a multinational mission of around 1,800 policemen and judicial officials. I can confirm that the UK will contribute around 80 of these, including its deputy head, Roy Reeve. European Foreign Ministers will confirm the detailed arrangements for this mission shortly.

Fourth, we also reaffirmed that a stable and prosperous Serbia fully integrated into Europe is important for the stability of the region. The Council encouraged Serbia to meet the necessary conditions to allow signature of its Stabilisation and Association Agreement and expressed our confidence that Serbia has the capacity to make rapid progress subsequently towards candidate status.

Indeed, the conclusions of the meeting of European Foreign Ministers last week reiterated the European Union’s support for enlargement more generally – and we also look forward to recognising the progress made by both Croatia and Turkey at this week’s Accession Conference in Brussels.

The UN Security Council will discuss the issue of Kosovo with representatives from both Belgrade and Pristina on 19th December, with the aim of giving Russia an opportunity to accept a consensus on the way forward. If this proves impossible, we – Britain – have always been clear that the Comprehensive Proposal put forward by the UN Special Envoy, Martti Ahtisaari – based around the concept of supervised independence for Kosovo – represents the best way forward.

And while we are rightly focused on the immediate priority of bringing the status process through to completion in an orderly and managed way, the European Council agreed that it is also important that we address the longer-term challenge of ensuring Kosovo’s future economic and political viability. I welcome the commitment made by the European Union to assist Kosovo’s economic and political development and planning is now underway for a Donors Conference to follow shortly after a status settlement.

The Council also discussed Iran and there was agreement on a united European approach. Here again, the power we wield working with all the EU is greater than if we acted on our own.

As I have made clear repeatedly, Iran remains in breach of its international obligations. In September foreign ministers from the E3 plus 3 agreed that unless there were positive outcomes from Javier Solana and the IAEA’s discussions with Iran, we would seek tougher sanctions at the UN. The latest E3 plus 3 assessment is that sufficient progress has not been made.

The European Council conclusions call on Iran to provide full, clear and credible answers to the IAEA, and to resolve all questions concerning their nuclear activities. The European Council reiterated its support for a new UN resolution as soon as possible. In addition we agreed to decide on new measures that the EU itself might take to help resolve this situation at the January meeting of Foreign Ministers. These should complement UN measures or substitute for them if the Security Council cannot reach agreement.

Iran has a choice – confrontation with the international community leading to a tightening of sanctions or, if it changes its approach, a transformed relationship with the world from which all would benefit.

As set out in the Council’s conclusions, the EU also reaffirmed its deep concern about the unacceptable situation in Burma, and makes clear that if there is no change in the Burmese regime’s approach to political negotiations and basic political freedoms, we stand ready to review, amend and – if necessary – further reinforce restrictive measures against the Burmese Government. The Council also reaffirmed the important role of China, India and the Association of South-East Asian Nations in actively supporting the UN’s efforts to establish an inclusive political process leading to genuine national reconciliation.

For our part we believe that the forthcoming visit of the UN envoy – Professor Gambari – is critical. It is essential that the Burmese government meets the demands set out in the UN Security Council statement of 11th October to:

Release all political prisoners; Create the conditions for political dialogue, including relaxation of restrictions on Aung San Suu Kyi; Allow full co-operation with Professor Gambari; Address human rights concerns; And begin a genuine and inclusive process of dialogue and national reconciliation with the opposition.

In particular, the regime should respond to the constructive statement of Aung San Suu Kyi of 8 November and open a “meaningful and timebound dialogue” with the opposition and the country’s ethnic groups.

The Council also agreed that a key part of the EU’s external agenda is how we can – by working together – maximise our influence in tackling global poverty. The Council agreed that the European Commission should report by April next year – half way to 2015 – on how the EU is meeting its commitments to the Millennium Development Goals, and how we can accelerate our progress.

In addition to these issues of international security and development, the Council conclusions and the special declaration on globalisation also sets out the challenges that the EU must now address on globalisation:

First, we agreed to maintain our focus on economic reform, with a renewed focus on modernising the single market so it enhances the EU’s ability to compete in the global economy. We must have full implementation of the services directive by 2009 and we must continue to work towards further liberalisation in the energy, post and telecoms markets — where market opening could generate between 75 and 95 billion euros of potential extra economic benefits and create up to 360,000 new jobs. Investment in research, innovation and education – and removing barriers to enterprise – are also essential.

Second, we confirmed our commitment to free trade and openness. The priority is securing a successful outcome to the Doha trade round, which would deliver gains to the global economy approaching 200 billion dollars by 2015, equivalent to 0.6 per cent of global income and bringing significant benefits to rich and poor countries alike. We will also promote better EU-US trade links.

Third, we agreed to do more to develop mechanisms for co-operation within the EU and with countries across the world to tackle security challenges like terrorism, illegal immigration and organised crime. We renewed our commitment to the EU Counter terrorism strategy and to cooperate on counter-radicalisation work.

Fourth, we will work together to deliver our commitments to tackle climate change – including the target of reducing emissions by 20 per cent by 2020, or 30 per cent as part of an international agreement. And building on the significant progress made last week in Bali – an agreement which the Environment Secretary will report to this House upon tomorrow – we must help negotiate an ambitious post-2012 international climate change agreement. And Europe must also now step up funding, including through the World Bank, to help the developing world shift to lower carbon growth and adapt to climate change.

Mr Speaker, it was agreed at the last Council meeting that the Presidency would bring forward a proposal for a new Reflection Group. This was announced in October. At this later meeting the Council invited Mr Felipe González Márquez, assisted by two Vice-Chairs, Mrs Vaira Vike-Freiberga and Mr Jorma Ollila, Chairman of Shell and Nokia, to – and I quote – ‘identify the key issues and developments which the Union is likely to face in 2020 or 2030 and to analyse how these might be addressed’.

The remit specifically states that ‘it shall not discuss institutional matters. Nor should its analysis constitute a review of current policies or address the Union’s next financial framework’. It will report back to the Council, who will decide how to follow its recommendations.

Mr Speaker, I can tell the House also that today we are publishing the EU Amendment bill which contains the institutional changes to accomodate a Europe of 27 members and will include the safeguards we have negotiated to protect the British national interest:

– The legally binding protocol which ensures that nothing in the Charter of Fundamental Rights challenges or undermines the rights already set out in UK law – and that nothing in the Charter extends the ability of any court, European or national, to strike down UK law; – Legally binding protocols which prescribe in detail our sovereign right to opt-in on individual justice and home affairs measures where we consider it in the British interest to do so, but alternatively to remain outside if that is in our interests; – A declaration that expressly states that nothing in the new Treaty affects the existing powers of Member States to formulate and conduct their foreign policy and that the basis of foreign and security policy will remain intergovernmental, a matter for governments to decide on the basis of unanimity; -And an effective veto power on any proposals for important changes on social security so that when we – Britain – determine that any proposal would impact on an important aspect of our social security system – including its scope, cost or financial structure – we can insist on taking any proposal to the European Council under unanimity.

With the publication of the Bill that legislates for the amendments to the European Communities Act, Parliament will now have the opportunity to debate this amending treaty in detail and decide whether to implement it.

We will ensure sufficient time for debate on the floor of the House so that the Bill is examined in the fullest of detail and all points of view can be heard.

This will give the House the full opportunity to consider this treaty, and the deal secured for the UK, before ratification.

In addition, I can tell the House that we have built into the legislation further safeguards to ensure proper Parliamentary oversight and accountability.

To ensure that no government can agree without Parliament’s approval to any change in European rules that could, in any way, alter the constitutional balance of power between Britain and the European Union, there is a provision in the bill that any proposal to activate the mechanisms in the treaty which provide for further moves to qualified majority voting – but which require unanimity – the so-called “passerelles” – will have to be subject to a prior vote by the House.

In the event of a negative vote, the Government would refuse to allow the use of the passerelle.

The Bill also includes a statutory obligation that any future EU amending treaty – including one which provided for any increase in the EU’s competence – would have to be ratified through an Act of Parliament —- so Parliament would have absolute security that no future change could be made against their wishes.

I said in October that I would oppose any further institutional change in the relationship between the EU and its member states, not just for this Parliament but for the next. I stand by that commitment.

And this is now also the settled consensus of the EU.

All 27 member states agreed at the Council – and this was expressly set out in the conclusions – that this amending treaty provides the Union with a stable and lasting institutional framework and that it completes the process of institutional reform for the foreseeable future.

The conclusions of the Council state specifically that the amending treaty ‘provides the Union with a stable and lasting institutional framework. We expect no change in the foreseeable future’

Finally, let me conclude with the discussion on the most immediate of economic issues discussed — concerns about the economic consequences of the global financial turbulence that started in America in August.

The Government’s first priority in the coming weeks is to ensure the stability of the economy and to have the strength to take the difficult long term decisions necessary.

And the Council agreed that the whole of the EU must now turn its attention to both the immediate measures necessary and the long term strengthening of international capacity to secure greater financial stability.

The announcement earlier this week by Central Banks in the major financial centres that they will provide liquidity to ease tension in the financial markets must now be built upon.

As we agreed, supervisory authorities in different countries need to co-operate effectively across borders in exchanging information and in the management of crises and contagion.

The European Council conclusions emphasised that macroeconomic fundamentals in the EU are strong and that sustained economic growth is expected. But we concluded that continued monitoring of financial markets and the economy is crucial, as uncertainties remain. The Council underlined the importance of work being taken forward both within the EU and with our international partners to:

Improve transparency for investors, markets and regulators; Improve valuation standards; Improve the prudential framework, risk management and supervision in the financial sector; As well as review the functioning of markets, including the role of credit rating agencies.

The European Council will discuss these issues at its Spring 2008 meeting on the basis of a progress report by the Finance Ministers Council and by consideration of the Financial Stability Forum’s work to date. As agreed by Chancellor Merkel, President Sarkozy and myself in October, the progress report should examine whether regulatory or other action is necessary. And I have invited Chancellor Merkel and President Sarkozy to London so that we can discuss the proposals in the paper we agreed and issued a few weeks ago.

Measures important to strengthening the international community’s role in addressing financial turbulence across the world —- showing the importance we attach to taking the tough long terms decisions to ensure in testing times the stability of the economy.

Mr Speaker, the conclusions of the Council state specifically that in the institutional framework we expect no change ‘for the foreseeable future’.

The protections that have been agreed in the amending treaty defend the British national interest. In the Bill introduced today we are legislating for new protections and new procedures to lock in our protection of these interests.

Europe is now moving to a new agenda – one that focuses on the changes needed to meet the challenges of the global era.

And I commend this statement to the House.

Gordon Brown – 2004 Mansion House Speech


Below is the text of the speech made by the then Chancellor of the Exchequer, Gordon Brown, at the Mansion House in London on 16th June 2004.

My Lord Mayor, Mr Governor, My Lords, Aldermen, Mr Recorder, Sheriffs, Ladies and Gentlemen.

In thanking you for your invitation let me start My Lord Mayor by thanking you for the work you and your staff do not just here in the City of London but round the world in promoting the City and Britain. And let me at the outset pay tribute to all the companies and institutions represented here today.

Let me thank you first for the scale of the contribution you make to the British economy – the £50 billion of income, 4 per cent of national output, and the 1 million jobs that arise.  And let me thank you also for the resilience, the innovative flair and the courage to change with which you have responded to not just the world economic downturn but to the greatest economic challenge of our times – the challenge of global competition.

When last year, as we made our euro assessment, we conducted a detailed and in depth review of the British economy, we were able to conclude that because you, here in the City, had been prepared to change and adapt, to innovate and invest in the future, to embrace technological change like automated trading not as a threat but as an opportunity, and to acquire – from all over the world – the skills financial services need, London’s already considerable and historic advantages and assets – our stability, our global reach, our reputation for integrity, our willingness to be flexible – had been so enhanced for the new global era that, even in the face of a pre-eminent American economy and an integrated euro area, London has today

– a greater number of foreign bank branches and subsidiaries than any other city in the world;

– the largest share of global cross border bank lending;

– with the London Stock Exchange, the largest trading centre for foreign equities in the world;

– and the foreign exchange market, the largest and most important in the world.

And it is a visible demonstration of London’s global reach and position – and now, in recent years, the modern links being forged not just with the USA, Japan and the euro area but with China, India, South Africa and other countries round the world – that I am told that there are more countries represented this evening than at any time in the 120 year history of the Lord Mayor’s Banquet. And I welcome all of you here from every continent and every corner of the globe.

Your presence tonight demonstrates that the City of London – and our financial services industry – has learnt faster, more intensively and more successfully than others the significance of globalisation :

– that you succeed best not by sheltering your share of a small protected national market but by striving for a greater and greater share of the growing global market;

– and that stability, adaptability, innovation and openness to new ideas and to global trading opportunities – great British assets and advantages – matter even more today than ever.

– and what you have achieved for the financial services sector, we as a country now aspire to achieve for the whole of the British economy.

And this is my theme this evening.  That the nations that will succeed in this fast changing, fiercely competitive global economy will be those that:

– first of all, lock in long term stability;

– second, encourage a competitive environment and the deepest and widest entrepreneurial culture;

– third, make the commitment to invest in what offers comparative advantage as global economic and technological change restructures where and what we produce – world class levels of innovation, technology, education, skills and, as you My Lord Mayor have mentioned,  infrastructure;

– and fourth, have the strength to take the hard long term decisions in favour of free trade and outward looking internationalism.

And I believe that if we have the strength to take the right decisions for the long term Great Britain stands better placed than almost any comparable industrial country to be one of the great success stories of this new global age.

Why?  Because I believe that if we build on qualities and values that have made us great in the past – our British enterprise, British creativity, the British openness to the world, the British adaptability to new ideas and our strong British sense of fair play and civic duty – and if around these great enduring qualities we can develop a shared British economic purpose about our future destiny as a country, then I foresee a new era of economic success for a global Britain.

Now Sir Winston Churchill – who we remember particularly in this month, the sixtieth anniversary of D-Day – spoke pointedly on the qualifications needed for a politician: “The ability to foretell what is going to happen tomorrow, next week, next month and next year. And to have the ability afterwards to explain why it didn’t happen.”   But in another remarkable phrase he warned his contemporaries that they must never be, as he put it: “Resolved to be irresolute, adamant for drift, solid for fluidity and all powerful for impotence”.

And it is indeed the need for resolution, solidity, an unwavering commitment to British values facing the challenges of the global economy, and the strength to take the long-term decisions, that is central to my message this evening.


First, Britain will succeed amidst this ever more intensive global competition only by locking in the monetary and fiscal stability that we have been enjoying.

And I can tell you that we have not taken the tough decisions on stability from 1997 onwards to lower our guard or relax our discipline now.

Let us remind each other of Britain’s chronic history of stop-go – under-investment, short-termism, insecurity and higher unemployment:

– an instability that meant businesses would not invest;

– people would not start up businesses;

– both families and businesses could not and did not plan for the long term;

– everyone expected inflation to recur; and

– short-termism was dominant.

Indeed, stop go had entered our psychology.

And when we came into government in 1997 it would have been easier not to have taken the decisions to raise interest rates. I would have avoided difficulties in my own Party if I had ignored the case for independence of the Bank of England. It would have been far more comfortable politically not to have frozen public expenditure or introduced tough new fiscal rules. But I believe that the test of our capacity to govern is whether we have the strength to take the right long term decisions for our country.

And it was our resolve that facing more intense global competition than ever – where investments will move to the countries that can demonstrate a long standing commitment to and record of monetary and fiscal stability – Britain had to have a new monetary and fiscal regime.  And so the changes we made were not just making the Bank of England independent but:

– cutting the national debt dramatically;

– imposing tough new fiscal rules over the economic cycle which allowed us to invest through a world recession;

– and introducing a symmetrical inflation target that targeted deflation as much as inflation.

And so let me thank the new Governor – Mervyn King – first for the work he did establishing the new regime as Deputy Governor and now for the contribution he has already made as Governor, showing why he is a worthy successor to Sir Edward George.

I know the Governor will agree that it is because we have developed a British model for monetary and fiscal stability – which allowed the Bank to cut interest rates aggressively during the world downturn and allows the Bank to act proactively and pre-emptively in the upturn too – that while the USA, Germany, Italy and Japan suffered recessions, Britain for the first time in 50 years did not suffer a recession during the world downturn and instead has grown in quarter after quarter, year after year.

And I can report to you that now the world economy is strengthening, growth in Britain is also becoming more balanced with business investment, manufacturing output and exports rising now – and expected to continue to rise this year and next.

Such is our determination to lock in our hard won stability that looking forward we can, and will, take nothing for granted.

With financial markets expecting interest rates to rise around the world as the world economy turns upwards and looks forward to rising growth and trade, we will continue to support our monetary authorities in the difficult choices they have to make and entrench not relax our fiscal discipline.

And we will be vigilant to global risks: geopolitical uncertainties, current account imbalances, the long term fiscal pressures of ageing, and specifically three challenges – oil prices, house prices and the need for continued fiscal discipline.

First oil: while the OPEC decision to raise production targets in July and August is welcome, I can tell you tonight that I and other Finance Ministers will continue to press OPEC both on meeting these quotas and on the case for raising the targets higher.  And because a secure production environment is crucial for stable oil prices in the long term, we will support Mr Rato – the new Managing Director of the IMF – in his proposal for a modern and up to date approach to global energy policy.

Let us recall that most stop go problems that Britain has suffered in the last fifty years have been led or influenced by the housing market. 40 years ago we built 400,000 homes a year, by the mid 1990s it had fallen to just 200,000 so we will press ahead with resolution – following the Miles and Barker reports and building on the success of the Deputy Prime Minister’s Sustainable Communities Plan – to tackle the large and unacceptable imbalance between supply and demand in the British housing market.  Reforms that, as we said last year, are right in themselves but are also necessary for sustainable and durable convergence with the euro area.  And on the euro, the Treasury will again review progress at Budget time next year.

And while debt servicing costs are on average substantially lower than ten years ago, the housing market has remained strong. And with Britain’s forward looking and pre-emptive approach to monetary policy we are showing our determination to maintain both a sustained economic recovery and stability, remaining vigilant at all times.

Let us recall also that at times like this in the political and economic cycle – as the economy starts to grow faster – governments have relaxed their fiscal disciplines and resorted to quick fixes and short cuts in fiscal policy and gone on to raise the rate of spending in a pre election spree. But the spending review I will announce in the next few weeks will both meet all our commitments and all our fiscal rules.  And because our duty is to achieve fiscal sustainability over the longer term we will not make the mistake of other countries whose pension and health care costs could rise to 20 to 25 per cent of national income in future decades. And I can tell you that i am determined to ensure that we can lock in greater stability not just for a year, or for an economic cycle, but in this generation —– a prize of greater stability that has eluded successive governments of all parties in the post war era; a prize that – with resolve and prudence – is now within our grasp.


British success in the global era depends on us not just building a consensus around the importance of long term stability but building a similar shared purpose about the importance of flexibility and enterprise – historic British qualities, now more relevant than ever for success in the global age.

We all know about the rise of China:

– over recent years contributing more to the growth of the world economy than all the G7 countries put together;

– consuming, for example, half the worlds cement, over a quarter of the world’s steel and a third of the world’s iron ore;

– the largest market for mobile phones in the world, and one of the fastest growing car markets too, with more Volkswagens sold in China than Germany.

We all know about the rise of Asia: whose economy, without Japan, has been growing at twice the rate of America and seven times the rate of the euro area; and to whom 5 million European and US jobs could be outsourced in the next fifteen years.

And we all know about the rise of developing countries: the vast majority of whose exports twenty years ago were primary products but which are now two thirds manufacturing goods with, in twenty years time, developing countries perhaps accounting for 50 per cent of all manufacturing exports worldwide.

And I think we can now say with some certainty that the advanced industrial countries that will do well will be those that are able to combine the skills of their people in design, science, technology, finance and management – and modern manufacturing strength – with the production advantages available in emerging economies.

Think back again to the 1960s and 70s when the old corporatism stifled enterprise and creativity — what we called:

– ‘the productivity problem’;

– ‘the management problem’;

– ‘the union problem’;

– ‘the short termism problem’;

– the ‘what’s wrong with Britain problem’.

So deep rooted was the British problem – sometimes called the British disease – that as they said at the time:

– first in the fifties we had managed decline;

– then in the sixties we mismanaged decline;

– then in the seventies we declined to manage.

Corporatism led not just to inflationary pay settlements but to mistakes made by governments trying to pick winners and to subsidise loss making industries and to sterile confrontations between union and management as between private sector and public sector, between market and state, with little shared economic purpose on the way forward.

And it is only recently that we are seeing a new Britain rising in its place.  Our task – and here I acknowledge the work of my predecessors – is to complete that break with the sterile self defeating corporatism that belongs in the past – hence the last Budget’s decision to end permanent on going industrial subsidies in steel, coal and shipbuilding – and develop a far a wider deeper entrepreneurial culture where enterprise opportunities are genuinely open to all.

So same way that we made the Bank of England independent of government we made our competition authorities independent of government and created one of the most open competition regimes in the world.  And although not quite as public a symbol as the Bank of England independence – but unique in terms of labour’s history none the less – we have cut capital gains tax substantially. Even with other priorities to finance – not least the NHS  – we have cut capital gains tax from 40 pence down to 10 pence for long term business assets and in budget after budget I want us to do even more to encourage the risk takers, those with ambition, to turn their ideas into reality and make the most of their talents.

And just as public services reform in health, education, transport and the criminal justice system will be stepped up, so too I can tell you that we will propose further economic reform and in particular greater flexibility to make us globally competitive.

Take the planning system where I can tell you that we will make our planning laws quicker, more flexible and more responsive to the needs of industry and people.

On pay: we will do more to encourage local and regional pay flexibility

On tax: having cut corporation tax from 33 pence to 30 pence and small business tax from 23 pence to 19 pence, I promise we will continue to look with you at the business tax regime so that we make and keep the UK as the most competitive place for international business.

On transport not least here in London: we must work with you – private and public sectors together – to tackle the massive backlog in infrastructure investment.  And with £180 billion of investment over ten years we will.

And on regulation:  I have announced measures – both for the City and beyond – to tackle unnecessary and wasteful bureaucracy and red tape:

– all new FSA rules subject to scrutiny by our competition authorities;

– the Office of Fair Trading now specifically examining the impact of the financial sector regulatory framework on competition;

– and because 40 per cent of new regulation – and as much as three quarters of new financial sector regulation – comes from Europe I can tell this gathering that having won the battle for a Savings Directive against tax harmonisation, Britain has, having consulted widely with you, already insisted on improvements to the Prospectus Directive, the Transparency Directive, the Market Abuse Directive, the Occupational Pensions Directive and the Investment Services Directive – and we will continue to resist inflexible barriers being added into the Working Time Directive and the Agency Workers Directive.

And now that the UK Government has agreed with Ireland, the Netherlands and Luxembourg to put regulatory reform at the heart of our four EU Presidencies through to 2005, putting every costly and wasteful regulation to a competitiveness test, we must ensure that if other countries fail to implement EU Directives we will not be discriminated against and there will be a level playing field.


British inventiveness is not just a feature of our industrial revolution past.  I am proud to say that today we lead the world not only in so many areas of financial services but in technologically advanced spheres from aerospace and pharmaceuticals to telecommunications, broadcast technologies and digital electronics.

And while it would always be easier to take the short term route – and fail to continue to make the necessary investments for the future – we propose to take the longer term view and to choose – even amidst other spending priorities – innovation, science and technology, education and infrastructure.  And I can tell you today that in the spending review we have not only financed higher standards in schools and the development of world class universities but we will move forward our ten year transport plan and set out a long term ten year framework for innovation, seeking a partnership with the private sector to do more as we set ourselves an ambitious target of increasing UK R and D investment.

So instead of stop go, Britain is now a stable economy.  Instead of instability and corporatism, Britain is embarking on an enterprise renaissance and demonstrating a commitment to science and a new determination to raise standards in education and training.

But just as we have forged a consensus on stability and on enterprise, science and skills, so too I believe we can forge a consensus on the issue of Britain’s place in the world – and particularly on our relationship with Europe.

Global Britain

As I said at the outset a commitment to stability and world class levels of skill, innovation, enterprise and investment must be matched in the global economy by the same commitment the City has shown  – to being outward looking and global in our reach.

That is why I can assure you of our determination to achieve a successful outcome of the Doha Round in the world trade talks and we will also make the case for our membership of the European Union for the advantages it brings to Britain – and for being a leader in the enlarged Europe, the biggest single market in the world.

Let us not forget the significance of enlargement.

It brings to an end half a century of division between east and west — once it was said that Europe was divided into two halves – those in the west who had Europe and those in the east who believed in it.

The idea of the European Union was that with economic cooperation a new prosperity would reinforce that peace.

It was not just an attempt – to use the words of the Bible – to ‘turn swords into ploughshares’ but to ensure there would be no need for swords ever again: although, with the Common Agricultural Policy, we ended up with rather more ploughshares than we might have wanted.

So European economic cooperation is vital to our prosperity and let us not forget that 750,000 companies trade with Europe accounting for 3 million British jobs.  53 per cent of our total imports of goods and services are from Europe. 50 per cent of our total exports of goods and services go to Europe.  And 65 per cent of our investment overseas now goes to Europe.

We are linked to Europe by geography, history and economics

A Europe of self-governing states working together for common purposes is in Britain’s interests.

And at a time when a significant section of political opinion appears to be making the case against Britain’s very membership of the EU, I say that we must, and will, make the positive case for Britain in Europe.

And I believe that the best contribution pro-Europeans committed to Britain leading in Europe can make to the cause of Europe is by ensuring that in Europe – indeed in every debate including the constitutional debate – we face up to rather than duck the difficult decisions about economic reform.

For just as Britain has to reform to meet the challenges of the new global economy, so must Europe.

Thirty, twenty, ten years ago it was commonplace to think of Europe as a trade bloc and of the growth of European companies, European brands and European flows of capital – and then to debate the internal rules, disciplines and institutions necessary to make the trade bloc work.  Hence the assumptions of many that a single market and single currency would lead to tax harmonisation and a federal fiscal policy and then a quasi-federal state.

But globalisation has meant that it is not simply European but global companies that have mushroomed, not mainly European brands but global brands, not European flows of capital alone but global flows of capital – and because it is globalisation that is driving our economies, the new enlarged Europe of 25 must look outwards not inwards, must think globally, reform, be flexible and rise to meet the competitive challenge of globalisation.  And it is global Europe not trade bloc Europe that is the way forward and a flexible, reforming Europe that thinks globally must now reject the old, fatally flawed assumptions of tax harmonisation and federalism.

First, facing worldwide competition, this new global Europe has no alternative but to embrace flexibility and liberalisation in product and capital markets: the opening up of electricity, utilities, telecommunications and financial services markets must proceed with speed; we need a new competition policy that ensures the single market delivers the lower prices and greater productivity of the US single market; and we should abolish wasteful state aids and promote both a European wide venture-capital industry and Private Finance Initiatives across the continent.

Second, with more than 18 million Europeans out of work, a globally orientated Europe must combine a new labour market flexibility with policies that equip people with the skills they need for work.   And third, Europe must think globally and because half of the world’s output arises in Europe and America, forge a new relationship with the USA – seeing America as a partner not rival.  It is not just in Britain’s but in Europe’s interest that the EU and USA make a greater effort to tackle the barriers to a fully open trading and investment relationship, strengthen joint arrangements to tackle competition issues, engage in dialogue about the approach to financial services regulation and together make multilateralism work for developing countries.

And Europe must also think globally and ensure that its monetary regime – the ECB and fiscal regime – the Stability and Growth Pact – enables it to deliver strong and sustainable growth.   That is why the Stability and Growth Pact must place greater emphasis on the importance of low and stable debt levels, and take into account both the ups and downs of the economic cycle and the quality of public finances including the importance of public investment.  And as we evolve the Stability and Growth Pact to meet changing European needs, it is through intergovernmental co-operation that fiscal policy delivers its most effective results.  And the British government will continue to stress that when member states are themselves answerable to their citizens for tax and spending decisions, it is right that the conduct of fiscal policy remains the responsibility of Member States.

That is why Europe must avoid endorsing a federal–style fiscal policy which would make the Commission and not Member States responsible for fiscal discipline. That is why while tackling unfair tax competition Europe must avoid the tax harmonisation that would damage our competitive position. And that is why also in the coming financial negotiations also Europe must show the resolution to keep its budget prudent and continue to tackle the waste of the CAP.

So the new constitutional treaty which is being debated in Brussels tomorrow must recognise these new economic realities.

What are called our red lines – that include economic red lines requiring unanimity on tax decisions and no federal fiscal policy – are not founded on dogma as some allege but on a concrete assessment of Britain’s national interest and Britain and Europe’s economic needs as we meet the challenges of the global economy.

So Mr Lord Mayor here in 2004 we can speak of a Britain that is no longer the country of stop go but a Britain of stability.

A Britain that has set aside the old corporatism and is a Britain of flexibility and enterprise.

A Britain no longer looking backwards, its mindset one of managed decline, but a Britain rising in confidence as it equips itself technologically and educationally for the future.

And as a Britain no longer looking inwards but a Britain true to its tradition of global engagement, we can find a new confidence as a nation — our outward looking internationalism making us uniquely placed to be a part of – and lead – in a Europe that is itself engaged with the rest of the world

A strong Britain in a strong Europe – strong to succeed.

Our shared aim: a confident Great Britain that is a great success story of global economy.

Gordon Brown – 2002 Speech to the TGWU Conference


Below is the text of the speech made by Gordon Brown, the then Chancellor of the Exchequer, to the TGWU Conference on 28th March 2002.


It is a pleasure to be in Yorkshire today to address this conference on manufacturing and to praise the TGWU for their role in organising this event highlighting the importance of manufacturing for us.

The importance you attach to jobs, good jobs, lasting jobs and highly skilled jobs that pay, is right at the heart of our full employment agenda for this region and for this country.

And building what I call “modern manufacturing strength” plays a vital part.

Manufacturing has been, and remains, critical to the success of the British economy – employing 4 million people and accounting for 20 per cent of our national income.

Let no one think that manufacturing is a sector of the past, to be praised for its historic role but somehow not relevant to the future: the issue for manufacturing — as a hugely important source of innovation in our economy, accounting for 60 per cent of our exports and vital to our regions — is to build modern manufacturing strength.

Here in Yorkshire and Humberside manufacturing accounts for 375,000 jobs – and generates over one pound in every four of the region’s annual wealth.

This morning I met one of Yorkshire’s most successful women entrepreneurs in high tech manufacturing…beating competitors in Britain and soon, I hope, abroad. Her business in Wakefield, which I visited today, is responsible for pioneering a new and innovative windows system which opens by touch – helping the disabled and elderly.

But we know the challenges we face.

Take last year.

The fastest growing and most dynamic sector of manufacturing – electronics and engineering – saw a 29 per cent decline in the output of computers, a 45 per cent cut in the output of semi conductors and a 54 per cent fall in the production of telephony equipment.

And we recognise the problems the weak euro has caused manufacturers exporting to the euro area.

But let us remember that there are many success stories in Britain’s manufacturing industry:

– last year manufacturing output in chemicals, food, drink and tobacco did not fall but rose;

– and on average productivity growth in manufacturing has outstripped productivity growth in the rest of the economy;

– even after the world slowdown in ICT demand and production last year, output of computers in the UK was still over four times higher than ten years ago;

– since 1970, output of the ‘high-tech’ electrical and optical equipment industries has more than trebled and output of chemicals has increased almost 140 per cent.

And there are many successful manufacturing businesses in Britain – world beating firms from aerospace and pharmaceuticals to motor vehicles and general engineering:

– our high tech expertise in steel engineering is exported to 170 countries around the world. Engineers at Sheffield Forgemasters have built and exported 280 tonnes of castings to the US, china and the Middle East;

– we are home to two of the most productive car plants in Europe attracting foreign investment of over £400 million in the last two years, creating and safeguarding thousands of jobs;

– and our pharmaceutical industry contributes 2.5 billion pounds to GDP and 60,000 jobs in Britain.

High skilled, high tech manufacturing is what Britain does best.  We are world leaders in electronics design, photonics, mobile network and broadcast technologies.

Yes, manufacturing is facing new challenges, but I can assure you that, as a government, we will help people, be on their side to cope with change.

I know that what manufacturers and manufacturing workers fear most is a return to the old boom and bust – they saw what happened in the eighties and early nineties when boom and bust cost Britain 3 million manufacturing jobs.

So stability is the essential pre-condition.

That is why since 1997 we have rejected short-termist free for alls – the take-what-you-can irresponsibility – and have put faith in our values of economic responsibility, building from solid foundations and looking to the long term.

With Bank of England independence, tough decisions on inflation, new fiscal rules, and hard public spending controls, we today in our country have economic stability not boom and bust, the lowest inflation in Europe, and long term interest rates – essential for businesses planning to borrow and invest – lower than for thirty five years.

So while many have claimed Britain was worst placed of any to withstand the global slowdown, the OECD and IMF have both shown that Britain last year had the highest growth of any of the G7 countries.

So nothing we do will put at risk the fundamental stability on which manufacturing depends.

There will be no return to the short-term lurches in policy that would put long-term stability at risk.

No relaxing our fiscal disciplines as some would like.

And there will be no change but consistency in our European policy – in principle in favour of the euro, in practice the five tests that have to be met.

The challenge

The challenge now for Britain – for manufacturing and across the economy – and for the Budget – is both to maintain our hard won stability and to accelerate the productivity improvements that will increase output, jobs and wealth.

That is why there will be no let-up in the drive that management and unions are all engaged in – with more competition not less, more innovation not less, more investment not less, and more not less small business development – to make Britain the most enterprising, productive and therefore prosperous economy over the next decade.

And our European policy is also designed to help manufacturing – opening up markets for British companies through economic reform.

We know that recovery in world trade will help manufacturing, but because modern manufacturing is about creating new ideas, new science and new technologies, developing new processes and new products, the vital factor in the future success of modern manufacturing will be our ability to harness technological change and develop a knowledge driven economy.

So I propose to go further to tackle four key drivers of productivity in manufacturing, and in the economy generally:

– innovation;

– investment;

– skills; and

– measures to help small business.


80 per cent of research and development activity in the UK is done by manufacturers.

To encourage modern manufacturing strength we will help British business and particularly manufacturers to invest in technologies of the future.  This week I announced a boost to innovation with a new research and development tax credit for large firms, following the introduction of the R&D tax credit for small firms – matching the best in the world.

To develop research partnerships between universities and business the Department of Trade and Industry is establishing university innovation centres.


Manufacturing contributes 15 per cent of business investment in the UK, but to generate greater growth and productivity we must boost investment further.

To encourage new investment by small business we have made capital allowances a permanent feature of the tax system – with 40 per cent capital allowances for investment in plant and machinery and, to encourage small and medium sized enterprises to move to the newest it systems, offering 100 per cent first year allowances for ICT expenditure.

Getting the venture capital funds for expansion can sometimes be difficult too.

So to encourage investment in the regions we are for the first time forming in every region of the country locally based venture capital funds.

The Yorkshire fund will be £25 million and we expect it to be operational and investing in local businesses in the next couple of months.


Skills are vital, not only because they are key to future levels of productivity and pay but also to our strength and security.

To encourage the new skills of the future we are backing modern apprenticeships.

In 1997 there were 75,000 modern apprenticeships, now there are 220,000 and by 2004 there will be over 320,000, with the aim that over a quarter of young people between 16 and 21 will take part in the scheme.

Many of these apprenticeships are in the manufacturing sector, with 15 per cent of advanced apprenticeships in engineering.

Because a third of the existing workforce lacks basic or level 2 qualifications and because the old voluntaristic approach has not worked, we have been investigating the joint CBI and TUC proposals for a tax credit for in-work training. And we will, from September, pilot a new approach combining direct financial support for business – especially small business  – with time off for training, under which employees, employers and government each accept their responsibilities.  Following consultation, the location and details of these pilots will be announced in the Budget.

We have also agreed with the CBI and TUC that we will encourage diffusion of best practice throughout industry. We have committed an additional £20 million to fund best practice initiatives and are establishing regional centres of manufacturing excellence in every region of our country.

The first stage of British regional policy – from the 1930s – was designed to support hard up areas with emergency measures.

The second stage – from the 1960s –  sought to encourage inward investment with new incentives.

Now we are moving to the third stage of modern regional policy – creating Regional Development Agencies where the emphasis is not just on encouraging inward investment but also on innovation and investment and building indigenous strength with freedom and flexibility for local people to make decisions based on local needs.

Small business

As over 95 per cent of manufacturing businesses are small, I want to create a competitive environment in which businesses can start up and grow.

Small businesses account for 55 per cent of all jobs – over 10 million jobs in all – and 45 per cent of the economy’s output, in total a trillion pounds of economic activity.

And small firms of today are the big firms of the future.

So I want a Britain where you can work your way up from unemployment to employment to self employment, from micro business to growing business.  A Britain where we break down the old barriers to opportunity, and where everyone has the chance to move ahead.

I want a Britain where people know what matters is not where you come from but what you do, not what you were born to but what you aspire to.

I want people with ideas and dynamism to know that if they start or grow a firm and make a profit they can not only reward themselves and their families but reinvest year on year to build a strong business.

Indeed in all areas of the country we must make it possible for people from all social backgrounds to transfer their ideas and hopes into the reality of small firm start ups and growing businesses.

And I want people in disadvantaged communities to see that the enterprise culture too often restricted to the elite is open to them – not least in high unemployment communities where prosperity for too long has passed people by.

We recognise not just the dynamism that small firms inject into our economy but also that starting a business or becoming self employed is increasingly an attractive option for graduates, women, the over 50s and those seeking new work and new challenges.

And so government has a special responsibility to remove the barriers that hold small firms back and create a level playing field in which small firms have an equal opportunity to succeed and grow.

Yet for fifty years British small business creation has been half that of the US and in our high unemployment communities one sixth of that of the more prosperous areas.

We need to do more to remove the barriers which hurt small business at each stage in their business development – and thus create the ladder of opportunity for businesses to move forward.

We need to cut the costs of starting a business, remove the barriers to hiring, training, investing, exporting and issuing equity.

Because the economy is stable and interest rates and inflation are low, there have never been better conditions in which to start a business.

And because there should be equality of opportunity for small business to enter new markets and to grow we supported the competition commission’s proposals to open up competition to make small business banking cheaper and until this happens  each small business should either see their bank charges abolished or have interest paid on their current accounts of at least 2.5 per cent less than the Bank of England base rate.

Through the tax system we are creating a more favourable environment for businesses to start and grow.

In 1997 we cut the small business tax rate from 23p to 21p. And then in 1998 we cut it again to 20p and introduced a lower rate 10p band especially for start up and growing businesses.

As I stated in the Pre-Budget Report I propose for business assets held for one year or more to cut capital gains tax to 20 per cent

And I propose to go even further for business assets held for more than two years, cutting capital gains tax to 10 per cent.

When we came to government all transactions were subject to a 40p rate.

Now three quarters of taxpayers with business assets will pay only a 10p rate, giving Britain overall a capital gains tax regime more favourable to enterprise than that of the united states.

At present each company with turnover above £54,000 has to account for VAT on each individual purchase and sale.

But because I want to cut red tape for small businesses, from next month a new flat rate and simplified scheme for payment of VAT will cut form filling for 500,000 businesses with turnovers of up to £100,000 – saving a typical small business up to £1,000 a year.  In the Budget I will consider extending this relief to more small firms and removing automatic VAT fines for companies in this category.

We will conclude our consultation on the Carter Report by making it easier and cheaper to do electronic filing of returns.

And we plan to do more for women entrepreneurs, not least with more help for starting up child care businesses.

Although we have many more businesses than in 1997, entrepreneurial activity in this country is still lower than the US.

Even more importantly, entrepreneurial activity in Britain varies markedly between areas.

In the wealthier areas of Britain, such as the South East, start-up rates – measured by VAT registrations – are as high as 45 per 10,000 people.

In Britain as a whole the rate is 39 per 10,000.

But in high unemployment areas like Yorkshire and Humberside start-up rates are as low as 30 per 10,000 people – 25 per cent below the national average – and in some towns between 21 and 27 per 10,000.

If all regions produced new businesses at the same rate as the South East, around 50,000 more small businesses would be registered a year.

So we have decided to do more to create a more favourable environment with new and special incentives in our high unemployment areas.

In the Pre-Budget Report I implemented the first stage of stamp duty relief in 2000 of our high unemployment areas – the abolition of stamp duty on all home and business property transactions up to £150,000. I intend to significantly increase or abolish this limit altogether for commercial transactions in this area.

Our ambition is to transform these high unemployment areas into 2000 enterprise neighbourhoods – and so they will also benefit from the initiatives this Government is putting in place as we champion small business:

– cutting the cost of investing with grant finance to stimulate entrepreneurial projects in the community through the Phoenix Fund;

– helping with premises and business support through the £75 million business incubation fund;

– advice worth up to £2,000 for start up through the small business service;

– providing equity investment for high growth firms through the £40 million community development venture fund;

– reduced VAT for residential conversions and capital allowances for creating flats over shops to regenerate our high streets.

And because new investment, new businesses and new jobs – not subsidies or giros – are the key to regenerating our high unemployment communities, the new community investment tax credit will cut the cost of capital and match every £100 million of private investment in the inner cities with £25 million of additional public investment – and we are publishing today the legislation for consultation.

I want to construct a ladder of opportunity, removing the barriers that prevent many from moving up the ladder rung to rung at every stage of growth: from employment or unemployment to self employment, from self employment to employing the first members of staff, and from small business to large business.

Too often for people and places that prosperity has passed by the enterprise culture is weak.

The enterprise culture will only be truly a British enterprise culture if no town, no community however depressed is left behind and if we extend its opportunities and benefits to the poorest areas of Britain where we need not more giro cheques being sent but more businesses being created.

Genuine equality of opportunity means that no matter your background or area, no matter your wealth, you should have the chance if you have talent and initiative to turn your ideas into a successful business – making Britain a more dynamic vibrant job creating wealth creating economy.

And to recognise the achievements of entrepreneurs working in our most disadvantaged areas I propose to present later this year a “Rising Star Award” as part of the Inner City 100 Campaign for the fastest growing new business created in our highest unemployment areas.


At each point we will be on the side of business, competition and wealth creation.

Our aim the most entrepreneurial economy, as we pursue our programmes for enterprise and fairness.

So the Budget in April will be a Budget for enterprise as well as for our public services.

And in each area modernisation will be the theme and the demand: modernisation of the environment supporting enterprise to achieve higher productivity and modernisation of the way we run public services to achieve better value for money.

So, as a Government, we must, and we will, press ahead with reforms to encourage new investment and higher productivity and promote enterprise.

And will continue to do more to recognise the vital contribution of modern manufacturing to exports, innovation, and our great regions.

But this calls for a modern dynamic partnership between government, trade unions, business and employees.

And the fruits of working together will be not just for some but for all – in every sector – in every region.

The test of national success judged not as the successes of a few, but how successes can be shared by the whole country.

Releasing our enduring values, the same yesterday, today and tomorrow – an opportunity and prosperity that enriches not just a few but everyone, and makes us a stronger, fairer, Britain.

This is our vision. It is our task.

Working together, this can be our achievement.

Gordon Brown – 2002 Speech at the United Nations General Assembly Special Session on Children


Below is the text of the speech made by the then Chancellor of the Exchequer, Gordon Brown, to the United Nations General Assembly on Children. The speech was made in New York on 10th May 2002.

Financing A World Fit For Children

We are here in New York this week…

– under the leadership of the United Nations and UNICEF;

– inspired by the calls to action from Nelson Mandela, Graca Machel and Kofi Annan;

– forming a new global partnership for children that spans the reach of global geography and the entire breadth of the economic spectrum – from the Pacific Islands to the Caribbean Basin, from Central America to Central Africa.

We have come here to stand up for the 113 million children – two-thirds of them girls – who are not going to school today because they have no schools to go to;

To speak out on behalf of the 150 million children who are malnourished, and for the 30,000 children facing death each day from diseases we could prevent;

And to fight for the cause of the 600 million children in developing countries who are living in the most disfiguring, grinding poverty imaginable – their lives in its stranglehold, their potential wasted, their hopes crushed by a world that condemns almost half its children to failure even before their life’s journey has begun.

It is this vicious circle of poverty, deprivation and hopelessness that shames us, calls us here, and challenges us to act.

And by our collective action, starting here this week in New York, that stranglehold of despair can, and must, be broken.

We have gathered here together – governments, non-governmental organisations, parents – because of:

– our shared concern for all these children who live on the knife’s edge of bare existence;

– our shared responsibility to end the senseless tragedy of young lives lost to disease and deprivation;

– our shared belief: that just as each and every child has a right to realise their potential we have a duty to help make it happen;

– and most of all, we are here because of our shared conviction that what can be achieved together by unity of purpose is far greater than what we can ever achieve acting on our own, and that is it our duty, from New York onwards, to form a partnership for children so wide, so powerful and so determined that no obstacle should be allowed to impede its path of progress.

We are united by our commitment to the Millennium Development Goals — that by 2015 we must halve the proportion of people – many of them children – who are living in poverty and suffering from hunger, cut child mortality by two thirds and ensure that every girl and every boy in every part of the world can enjoy basic education.

The Zedillo Report estimates that if we are to succeed in achieving these goals, an extra $50 billion will be required each year until 2015.

To raise investment by $50 billion a year would require unprecedented action.  But I believe it is not beyond us.

Together, pledges from the United States and the European Union – and I am pleased that Glenys Kinnock is here today from the European Parliament – made at the UN Financing for Development Conference at Monterrey will, from 2006, raise $12 billion a year more for education, health and anti-poverty programmes.

$12 billion more a year is an historic advance – a reversal in the 20 year decline in aid levels.

But because we know that we must act now to ensure a better world for our children, we must do more.

The question we must ask is:

When we have in our hands the means to enable every child to be fed, the sophisticated medical know-how to cure many of their diseases, the means to abolish their poverty, when we well know the liberating power of education…and when the resources required to achieve all these ends are not beyond our means but within our means…how can we fail to act?

For we have the power and obligation, never given to any other generation at any other time in human history, to banish ignorance and poverty from the earth.

Today, as this Special Session issues our call to action – a call that we hope will be heard and heeded by all governments, and resonate far beyond these walls and these borders – I want to propose what is a new deal for the global economy, that is also a new deal for the world’s children:  that in return for developing countries pursuing corruption-free policies for stability and for creating a favourable environment for investment, developed countries should be prepared to open up trade to developing countries for everything but arms and to increase vitally needed funds to achieve the agreed Millennium Development Goals.

And so I suggest a new development compact grounded in new rights and new responsibilities – where no country genuinely committed to good governance, poverty reduction and economic development, should be denied the chance to achieve the 2015 goals through lack of resources.

There are four areas in which action is now urgent:

First, hunger is a fact of life for too many children.  And in some countries it is tragically getting worse not better. Even when there is adequate food available, poverty often prevents poor people from feeding their children.

So the British Government proposes today that not only do we recognise the importance of the trade round for long-term food security – opening up agriculture in all our countries to fair competition – but that we also take short term immediate action – as Clare Short our International Development Secretary is doing – to help those countries currently affected by food shortages, including Malawi, Zimbabwe and Zambia.

Second, because we have been far too slow in advancing our education goals – because as things stand 88 countries will not achieve primary education for all by 2015 and indeed because instead of raising educational aid as a share of national income the world has been, disgracefully, cutting it – our Government’s proposal today is that the richest countries back the new World Bank initiative with the funds it now needs to fast track our commitment to meeting the goal of primary education for all by 2015.

And that, out of the G8 summit in Canada, rhetoric on education is matched by resources — not just for Africa but for every developing country pursuing pro-stability, pro-investment policies who should not be prevented from achieving their education goals by debt or lack of resources and who should not have to charge for education but should be able to offer schooling free of charge.

Third, half the child deaths are from four avoidable diseases – acute respiratory tract infection, diarrhoea, malaria and measles – a loss of millions of children’s lives unnecessarily each year.  So building on the Global Health Fund for drugs and treatments in HIV/AIDS, malaria and TB, the British Government proposes today that just as we fast track investments in education for countries who have a plan, so too for health we should fast track support for helping to build universal and equitable health care systems.

Fourth, because we must build a virtuous circle of debt relief, poverty reduction and sustainable development for the long term, our Government also proposes today that we step up our commitment to making the HIPC initiative a success, by driving forward with HIPC implementation and pledging to ensure its full financing.  Our estimate is that a further $1 billion contribution will be needed from richer countries.

And I propose we do far more than that.  Recognising the cost of meeting the Millennium Development Goals at $50 billion a year, we ask Europe and America to maximise their development spending by examining as a matter of urgency the means by which the $12 billion a year boost to aid can be made to go much further and its benefits maximised.

Friends, here with us today are not just the memories of the children who lost out when we have failed in the past, but the hopes and expectations, the dreams and yearnings of millions of young people who may doubt us, but who in large measure have to depend on our decisions to make a difference in their future and their fate.

Their voices must be heard and our response must be clear.


The first area where action is imperative is in the battle to eradicate hunger that not only causes the deaths of so many children but also stunts the development of so many others.

Just as the international community is working together to win the war against terrorism, so we must redouble our efforts and work together to win the peace.  It is indeed a terrible indictment of our civilisation that in spite of economic growth, technological advance and food surpluses in so many countries, over 800 million people in the world – mainly women and children – still go hungry every day. And nearly half of children in developing countries under 5 years old suffer from malnutrition, with all the consequences for the quality of their physical and educational development.

Together we have signed up to the goal of reducing by half the proportion of hungry people in the world by 2015. But progress towards this target has been far too slow and in many areas – Bangladesh, Afghanistan, Nepal and parts of Sub-Saharan Africa – the situation is getting worse.

Britain is ready to respond to likely food shortages in Southern Africa as the year progresses.  We must coordinate our response internationally – with all countries, including those in the surrounding region, playing their part. The affected countries themselves must take urgent action to root out corruption and ensure that available food gets to the people who really need it.

But food aid is expensive and not a sustainable solution.  So we must do what is immediate and urgent to help those who are hungry, but also develop credible strategies for food security.

And we must recognise that, in the longer term, the liberalisation of trade by all countries – rich and poor – is critical to the elimination of hunger.

All developed countries should follow the EU in offering free access to all but military products from the least developed countries.  And as a matter of urgency we must drive forward the agreement made at Doha to open up trade in agriculture.

We must fulfill our commitment to make substantial improvements in market access; reduce domestic support that distorts trade; and negotiate reductions in all forms of export subsidies with a view to phasing them out.  Subsidies to agriculture run at $1 billion dollars a day – six times development assistance – and the UK is committed to push for significant reform of the EU’s Common Agriculture Policy to allow developing countries to take full advantage of domestic and international market opportunities.

But we must not rush developing countries to reduce their tariffs without recognising the effect it could have on both government revenues and on the livelihoods of people working on the land.

We need a sequenced approach which ensures that appropriate measures are in place to protect vulnerable countries from an overly rapid transition to a system of liberalised trade. Hence the IMF and World Bank commitment to undertake Poverty and Social Impact Assessments of our reforms.  And at the spring meetings in Washington we asked to see a more systematic approach to these assessments and for the IMF and World Bank to report back on progress in the autumn.

Trade liberalisation must also be coupled with pro-stability, anti–corruption policies in the developing countries themselves – policies designed to boost agricultural production, encourage economic diversification, tackle poverty and promote sustainable development, thereby reducing the risk of hunger and food crises for the poor.


Our second priority area is education.

Children are 40 per cent of the population but 100 per cent of our future.   And we know that a child can develop his or her potential only if there is educational opportunity.

For many children from poor households, primary education is the one chance they will have to acquire basic literacy, numeracy and the essential life skills to enhance their changes of a sustainable livelihood.

I think of the five year olds for whom schooling can give opportunities they would never otherwise have both in learning and in life – a chance that will transform their own lives immediately…and lift the life of their nations for the next half century and beyond.

Education is the very best anti-poverty strategy, the best economic development programme.  There is simply no better means to empower the powerless, and to put their future directly in their hands.

But progress since the World Education Forum in Dakar two years ago has been unacceptably slow.  Almost half of all African children and one quarter of those in South and West Asia still do not go to school and the recent World Bank report set out the need for urgent action — with a total of 88 countries in danger of missing the goal of primary education for all by 2015, 34 of these are in Sub-Saharan Africa.

The current level of international support for education is inadequate with less than 5 per cent of total Overseas Development Aid going to basic education.

And it is estimated that to finance universal primary education in 47 countries – just over half of those failing to progress – will require a minimum of $2.5 billion more per year from donor countries, on top of substantially increased domestic efforts.

This World Bank initiative marks a major breakthrough – the first focused financing framework to ensure that no country genuinely committed to economic development, poverty reduction and good governance is denied the chance to achieve universal primary education through lack of resources.

It is a new deal for developing countries who must play their part by drawing up their own education plans, undertaking the necessary reforms, channeling resources to education through their Poverty Reduction Strategies, abolishing user fees and ensuring that children don’t just start school but actually finish their education.

And in return, the international community must increase substantially its financial contribution for education in the poorest countries, focusing on those nations with very low rates of primary school completion where there is an assurance that the additional resources will have the maximum impact.

We welcome the recent announcement by the Netherlands that they are investing $120 million in strengthening the effort to reach education for all.  Germany and Canada have also pledged their support. And, under the leadership of Clare Short, Britain will play its part, building on the £650 million we have already committed to achieving universal primary education since 1997.  The problems in Africa are of particular concern and the joint initiatives between African leaders and the G8 under the New Partnership for Africa’s Development will be crucial.

Our purpose, Nelson Mandela has said, “is to get specific commitments…and specific results”.  And so, in advance of the G8 summit in Canada next month, I urge all developed countries to pledge their support for the World Bank initiative so we can move forward in the certainty that funds will be provided as, country-by-country, detailed plans are developed.

Too often, the world has set goals like the Millennium Development Goals and failed to meet them.

Too often, we have set targets, reset them, and recalibrated them again so that our ambitions, in the end, only measure our lack of achievement.

This time, it can be – and must be – different. This time, we must together commit ourselves to a specific course of action, and then each of us as partners must be prepared to make the radical changes required so we can see education truly become the birthright of every child.


We must also move forward with as much speed and purpose on the issue of health.

We well know the human and economic cost of infectious disease in developing countries. In South Africa, Botswana and Zimbabwe, half of all 15?year olds are expected to die of AIDs; and diseases like malaria and tuberculosis kill millions of children a year.

These are dread diseases, but perhaps the greatest tragedy of all is that we know they – and the loss of so many young lives – are preventable:

– as many as half of all malaria deaths could be prevented if people had access to diagnosis and drugs that cost no more than 12 cents;

– a quarter of all child deaths could be prevented if children slept beneath $4 bed?nets – in Africa, only one per cent of children do; and

– improving and expanding immunisation could save a further two million lives each year.

Where these strategies have been implemented, they have brought results.  The latest UN figures show that however limited their resources, poor countries that make treatment and prevention a priority can stem the spread of HIV and AIDS as Uganda, Thailand and Senegal have, and cut TB deaths by 50 per cent, as China, India and Peru have.

So there is more that developing countries can do to reduce disease and despair, particularly amongst their children; yet there is a natural limit imposed by their ailing economies.  The countries that most urgently need to devote more resources to health care are the countries that spend the least on health care.  Health spending in the least developed countries is $13 per person – a fraction of the $2000 a head we spend on health care in developed countries.

That is why – under Kofi Annan’s leadership and with, I am pleased to say, Clare Short’s International Development Department playing an important advisory role – we have set up the Global Health Fund which has so far raised $1.9 billion for bulk purchase of medicines by developing countries.  And why the UK has created new tax incentives to accelerate the research – both in Britain and elsewhere – on diseases like AIDS, TB and malaria.

This must be matched by a commitment from pharmaceutical companies to create new drugs and vaccines in ways that truly help the poor and sick and again I call on them to step up to their responsibility, to recognise the scale of the challenge we face and to respond on an equal scale.

But if the Millennium Development Goals are to be met, action on health must be at the very core of the priorities, budgets and Poverty Reduction Strategies of developing countries themselves.

So just as the World Bank has set out an action plan for education, we call on them to work with the World Health Organisation to develop a plan for health — to identify the financing gaps and set out the action now needed to ensure that no country committed to improving the health of its people, particularly its children, is prevented from doing so because of a lack of funds.

Debt Relief and Financing for Development

If we are to achieve our goals of improved education and better health, we must build a virtuous circle of debt relief, poverty reduction and sustainable development.

As we have seen with Uganda – where pupil teacher ratios as a result of debt relief will fall from 100-to-1 to 50-to-1 and every child at school will have a roof above their head – faster and deeper debt relief, accompanied by aid focused on poverty reduction, will be the essential foundation for meeting the 2015 targets.

The HIPC process is lifting the burden of unpayable debt from 26 of the most highly indebted countries, canceling $62 billion in debt from countries that have clearly demonstrated their commitment to poverty reduction.

But what drives us forward are not the achievements we can point to – important as they are – but the gains still to be made.  If all countries eligible – including countries in conflict – became part of HIPC, $100 billion of debt could be cancelled.

Indeed our challenge is not to relax our efforts but to redouble them to ensure that debt relief provides a sustainable exit from the burden of unpayable debt, to find ways to assist those countries torn by conflict who for that reason have been unable to benefit from debt relief, and to protect the benefits of debt relief for vulnerable countries who are suffering from the effects of the global slowdown and fall in commodity prices.

That is why we welcome the decision made at the IMF and World Bank spring meetings to undertake a review of the HIPC initiative to ensure it achieves its aim of delivering debt sustainability and urge the G8 – under the leadership of the Canadians – to drive this forward.

There are three issues on which we need to make progress:

First, we must be much more cautious about the forecasts we use to calculate debt sustainability between Decision Point and Completion Point.  Optimistic assumptions about future growth and exports often do not reflect the reality many countries face – and unnecessarily restrict the amount of debt relief we can provide in the interim stage before countries finally exit HIPC.

Second, where countries have had to contend with external shocks – such as sharp falls in the price of key export commodities – we must form a broad consensus on the need for topping up at Completion Point to ensure a lasting exit from unsustainable debt.  And we must develop more realistic and generous rules for its provision — including agreement that the calculation of topping up should exclude voluntary bilateral provision of additional 100 per cent relief.

Third, we must do more to ensure that all creditor countries – including non-Paris Club members – deliver debt relief to our poorest nations.  And take action to identify commercial creditors who refuse to provide debt relief.

In order to ensure that we can make a swift start to these reforms – and in particular to ensure that more realistic and generous debt relief can start to be provided now to secure a robust exit from unsustainable debt – we estimate that a further $1 billion contribution will be needed from richer countries.

Finally, we must do more to support HIPC and other low-income countries who face legal challenges from creditors – both commercial and official – who are unwilling to give debt relief.

We particularly condemn the perversity where Vulture Funds purchase debt at a reduced price and make a profit from suing the debtor country to recover the full amount owed – a morally outrageous outcome. The international community should consider giving technical assistance to any HIPC country being sued by a Vulture Fund and provide them with expert financial advice on debt restructuring to prevent future legal claims.

Whenever a country has to defend a legal case it has to divert considerable time, attention and resources away from focusing on poverty reduction, health and education and we must do everything we can to stop this shameful practice.

But debt relief alone will not be enough and we must look at other innovative ways, building on the $12 billion already pledged, to reach the $50 billion needed to meet the Millennium Development Goals.

The $12 billion could be spent more effectively by disassociating aid from the award of contracts and better collaboration among donors – pooling of budgets, monitoring their use to achieve economies of scale and better targeting of aid – to maximise its efficiency in diminishing poverty.  Overall, better allocation, co-ordination and untying by bilateral donors and international institutions could make aid 50 per cent more effective.

And developing countries themselves have a responsibility to show that the funds they receive are properly and effectively used.  They must end corruption, meet their obligations to pursue stability, create the conditions for new investment and ensure that resources go to fighting poverty.

In recent months, many proposals have been made for new and innovative ways to meet the funding gap – Tobin tax, Arms tax, Special Drawing Rights.  And it is right that we examine the practicalities of these proposals.

One possibility is to leverage up the new resources promised by Europe and the United States through an International Development Trust Fund.  If national governments offered a guarantee – either though callable reserves or appropriate collateral as security – then additional aid contributions could be levered up in the years to 2015 to meet the $50 billion target, so ensuring that the $12 billion already committed in additional aid money goes further and its benefits maximised to the advantage of all.


Before us are threats we must face and defeat – from terrorism, to exploitation, to the easy temptations of indifference.

But before us there is also an unprecedented possibility of progress.

Every time we lift one child above the squalor of the slums…

Every time we rescue one teenage soldier pressed into combat or one young girl pushed into prostitution or forced labour…

Every time we cure one mother afflicted by disease, and give her and her children a chance in life…

We are making a difference.

But if we can lift not just one child, but millions of children, and then all children, out of poverty and hopelessness, we will have achieved a momentous victory for the cause of social justice on a global scale and the values that shape our common humanity.

At this Special Session, in this momentous time in history which has seen the best and the worst of human kind, it is up to all of us in every nation – the greatest and the most powerless, the most prosperous and the poorest – to pledge together that in the face of so much pain and poverty, and with the possibility of so much progress, we will not pass to the other side.

So as the UK Government we make this declaration: that we will substantially increase our development aid, raise its share of our national income, untie all our aid and, beyond that, will be ready to reshape our policies, adjust our expenditures and refashion our priorities so that the actions of each of us make possible the attainment of the goals set by all of us

But let us remember that we advance only if we advance as one – and each country must play their part, accept their responsibilities and go further than they have been prepared to go in the past.

I believe that whether we help the world’s children should be the true litmus test of globalisation.

Managed badly, globalisation could leave millions of children in the developing world marginalised but managed wisely, globalisation can, and will, lift millions out of poverty and become the high road to a just and inclusive global society.

And if globalisation is to be considered a success, the real test is that the world’s children must become its beneficiaries not its victims.

So here in New York, we must see what the world – firm of heart and united in spirit – can do and will do.  Not as disconnected acts of charity, but as wave upon wave of caring, collective endeavour and compassion in action flowing from this moment, and this year, to 2015 and well beyond.

At every moment our thoughts are on – and our inspiration drawn from – the needs of children anywhere and everywhere that poverty and injustice exist who today lose their chance in life when their lives have barely begun.

And summoned to act by the calls of the dispossessed for justice, we must achieve our goal – the goal of decent minded people everywhere in the world – that no country, no person, and no child is left behind.

Let it be said of us as was said of a great American leader:

“we did not fear the weather and did not trim our sail but instead challenged the wind itself to improve its direction and to cause it to blow more softly and kindly over the world and its people”.

Gordon Brown – 2001 Labour Party Conference Speech


Below is the text of the speech made by the then Chancellor of the Exchequer, Gordon Brown, at the 2001 Labour Party conference in October 2001.


This is no ordinary time. No ordinary conference.

September 11th transformed our times and our task.

And let us be in no doubt: it has now fallen to our generation to bear the burden of defeating international terrorism.

So let me start by speaking not just for the whole conference, but for the whole country in paying tribute to the leadership of someone whose qualities I know from having worked closely with him for nearly twenty years: the Prime Minister, the leader of our party, Tony Blair.

We are proud of the work that Tony is doing.

He is speaking for Britain.

And at this testing time we know our duty.

To stand and not to yield

And so to affirm a cause

The cause that in times past inspired this party to work for a United Nations, for collective security in Europe, for international economic cooperation.

The cause of international solidarity.

The cause not just of one country, one continent, one culture: but of people of conscience everywhere whatever their colour, whatever their race, whatever their background, whatever their religion.

The cause founded on a simple truth – that an injury to one is an injury to all; an injustice anywhere is a threat to justice everywhere.

For friends: how can any of us ever forget where we were, what we were doing, and the overwhelming sense of disbelief, outrage and loss as we watched on TV the unfolding events of September 11th?

All across Britain we know of communities and families affected.

A few days ago I met members of a British family and heard how a son who had just telephoned his mother and father to say he was safe perished in the second wave of explosions in the World Trade Centre.

And his brother said: let this not be in vain.

That family even in mourning thinking of others and their hopes for a better world.

So with them let us affirm:

That while lives have ended, the cause of freedom and justice never ends.

That while buildings can be destroyed, our values are indestructible.

That while hearts are broken, hope is unbreakable.

And imprinted on our memories from that tragic day of September 11th is the heroism of so many people and let us also take inspiration from the firefighters, police, ambulance men and women, caretakers, health service workers, public servants and all those working in New York and Washington that day who gave their lives helping others .

Quiet heroes who showed not just by great individual courage but by an extraordinary common humanity expressed through public service – that duty, obligation and service to others are at the core of every community, and every society.

And in this time of adversity, let us by our actions demonstrate more than ever we hold steadfast to our enduring internationalist ideals of freedom, justice and solidarity.

Tomorrow Tony will set out for us the shared effort being undertaken by the international community.

Today let me tell you what contribution has been agreed by finance ministries round the world.

Ready access to finance is the life blood of modern terrorism.

And no institution, no bank, no finance house anywhere in the world should be harbouring or processing funds for terrorists.

So I can tell conference: it is because here in Britain we have already implemented last year’s United Nations resolution on terrorist financing that bank funds amounting to $88.4m have now been frozen.

And now we call upon all nations to implement financial sanctions to ensure that just as there is no safe haven for terrorists there is no safe hiding place for terrorist funds.

And we must do more to cut off the supply not just of money but of weapons. And just as Britain has now banned export credits for armament sales to 65 countries, it is time now for all countries to restrict credits for arms sold to the poorest countries, because that same money should be spent not on piling up weapons, but on reducing poverty.

And just as we mount a coalition to tackle the tyranny of global terrorism – with Clare Short having announced a 36 million pounds increase in aid to help refugees in Afghanistan and Pakistan we will play our part in mounting a humanitarian coalition to tackle the evil of global poverty.

On September 11th terrorists intended to bring the world’s financial system to a halt – to undermine the very possibility of global prosperity.

So we will show by our actions in maintaining the conditions for stability and growth that we do not succumb or surrender to terrorist threats.

It is a tribute to international cooperation that this challenge to the global economy is being met by a global response: not only have interest rates been brought down worldwide to aid consumers and business but the central banks of America, Japan and the Euro area as well as Britain have said that wherever necessary they will not hesitate to take further action to bring interest rates down.

Oil prices – whose rises in past times of trouble exacerbated economic instability – have actually fallen and we will continue our work with the oil producing countries to ensure normal supply at reasonable prices.

And where markets have failed, as on airline insurance, governments have acted – with a new insurance guarantee to keep our airline industry functioning.

And as the events of the last three weeks have again shown we gain strength from our membership of the European Union and are stronger acting in concert with others than we could ever be alone.

And it is in our national interest that we stand with each other not only in promoting common security but in promoting the economic reform in Europe essential to growth and equally in our national interest that on the euro we assess the five tests so we can and will make the right economic decision for Britain.

When I became chancellor I told you that stability would be the precondition of a successful Labour government.

No country can insulate itself from the global economy.

And these are uncertain times with world trade slowing, economic activity down not only in America but in Japan and continental Europe and no one can yet be sure about the impact of the events of September 11 .

So these are times that will test us here in Britain.

And I understand people’s worries about the effects of a global slowdown on their jobs and their livelihoods.

But it is because of the tough decisions we took from 1997 to reduce our debt and to make the Bank of England independent – and we will continue to back the Bank of England in all the difficult decisions it makes – that we are today in a better position to withstand the ups and downs of the economic cycle, and the pressures and the difficulties we now face.

Ten years ago when the American economy slowed at a time of international conflict, British inflation had already risen above 10% and government had to raise interest rates even when unemployment was rising above 2m.

Today with the economic fundamentals now strong – inflation has been at or near our target of 2.5% for four years.

A decade ago British interest rates were above ten per cent for four years and rose to 15%.

Today with the economic fundamentals strong they are 4.7%, for home owners and businesses the lowest for nearly 40 years.

In the last world slowdown borrowing rose to 50 billion pounds.

Today with the economic fundamentals strong we are meeting our fiscal disciplines.

And to answer directly those who say we will have to cut our spending, let me tell conference and the British people: our public spending plans are based on cautious assumptions.

And with debt reduced from 44% of national income to almost 30%, the lowest level of our competitors, we are well within our fiscal rules.

So because our plans are not only good for social justice, but affordable for our country, and right for our economy, we will hold to our three year public spending plans.

Public spending is set to rise by 3.7% a year even after inflation.

Transport and policing by even more.

Education by over 5% a year.

Health by more than 5% a year.

Keeping our public service promise to put schools and hospitals first.

And let me tell conference that our spending plans are affordable precisely because we have not made the mistakes of the last two Labour governments who by refusing to take early action to maintain stability ended up cutting, not increasing, public spending – and were denied the capacity to fulfil their social goals.

And I promise this conference : we will not make the even greater errors of the late 1980s where economic mismanagement and fiscal irresponsibility turned a surplus of 4 billion pounds into a deficit of nearly 50 billion pounds; the biggest deficit in our history.

Testing times demand more discipline not less.

So when we are told that this is the time to drop our spending limits, relax our discipline abandon our fiscal rules and break our manifesto promises on tax, I say to you: we shall not relapse back into the irresponsible quick fixes of the past.

We have not come this far together- and together taken so many difficult long term decisions to put our stability and prudence at risk now, when we know stability and prudence are the foundation for achieving the ambitious goals we have been elected to deliver.

So vigilance now is necessary for further progress on our priorities later.

It is only by being cautious now, maintaining our discipline and building public support for the budget and spending decisions we will have to make in the coming months that we will be able to achieve our aim in next year’s spending review – to release further new resources for tackling poverty and for public services.

Because our stability and prudence is and has always been for a purpose.

So when people ask us in these times of adversity: If we are to meet the urgent challenge of the hour, will we have to sacrifice the goals, the progressive goals, of full employment, better public services, tackling child and pensioner poverty at home, and cooperating internationally to protect the environment and combat international poverty?

When they ask now whether in these times of adversity, we have to sacrifice social progress, I reply that because we are more determined than ever to set the right priorities these times of adversity will not diminish but strengthen our commitment to our progressive goals.

We will not sacrifice the goal of full employment, our goal of full employment for every region of Britain.

And at this time of economic uncertainty it is even more important that in the Pre-Budget Report we expand the New Deal again, invest more in skills retraining. And with new opportunities and tougher new responsibilities we will do whatever it takes to help back to work those long term unemployed without jobs, skills, earnings or prospects.

And let me tell conference this government also appreciates the difficulties of men and women in sectors directly affected by the American tragedy and manufacturers and exporters faced with slowing world trade and a weak euro.

And because this government now and in the future will always back manufacturing industry – so vital to our economy – we will in this year’s Pre-Budget Report build on our investment allowances, the new funds for venture capital investment in all regions of the country and the additional resources for regional development agencies pioneered by John Prescott, all adding up to a new regional industrial policy for Britain.

This Autumn Patricia Hewitt and I will set out our plans for a new tax credit for innovation across manufacturing, backing with direct government support the new ideas of today which will become the new jobs of tomorrow.

And because there is no solution to the problems of our high unemployment areas without more businesses, more enterprise and more entrepreneurship, the Pre-Budget Report will extend opportunities for small business creation to places and people prosperity has for too long passed by – public sector working in partnership with private sector to create jobs.

Our task is that Labour is not only the party of employment in Britain, also the party of enterprise in Britain.

And even in these testing times we will not sacrifice the ideal of lifting the low paid out of poverty, helping pensioners to ensure dignity in retirement and giving Britain’s children the best possible start in life.

Because we believe that economic efficiency depends upon social justice the minimum wage rises today by 10% from 3.70 pounds an hour to 4.10 pounds – and as the Low Pay Commission advised we plan to raise it again next October, as we also raise and extend maternity pay and leave, and ensure new rights for part time workers.

And with the pension rising faster this year than prices, faster next year than prices on the way to the new pension credit, and with the winter allowance paid at 200 pounds from next month, we will keep our promises to Britain’s 11m pensioners.

Because it has been a scar on the soul of Britain that when we came into power one child born in every three was being born poor we have not only taken one million children out of poverty in our first term – one million children previously condemned to fail – but as Alistair Darling and I legislate for our new child credit and we prepare future Budgets we are determined to take the next one million children out of poverty – resolutely advancing towards the goal we all share of abolishing child poverty in our generation.

And because our goal of opportunity for all demands more than the relief of poverty but that we tackle the underlying causes of poverty by extending opportunity we will in the reforms Estelle Morris is leading over the coming years-

Extend nursery education and Sure Start;

Help more young people stay on at school;

Radically improve workplace skills moving beyond the old voluntarism of the past.

And as we examine the financing of universities and the problems of student loans and fees, the test will be to break down the barriers that hold people back so that all and not just those who can afford it have the chance to make the most of themselves and their talents.

And even in times of adversity we will advance our goal of world class public services.

And, as this conference agrees, on reform in our public services and I urge conference this afternoon to support the necessary modernisation – our task in our spending and tax decisions in the budget and spending review will be to combine that reform with the necessary resources for the future.

We reject those who argue that our public spending on public services is a drain on our economy and we reject those who advocate privatisation and public spending cuts.

We will implement our pledge to secure a world class National Health Service, a public service free for all at the point of need.

We will continue our progress in education to ensure world class state schools because we believe learning for all is the most important investment we can make for the future.

But those of us who believe passionately in public services have a special responsibility to ensure their effectiveness and we can only deliver world class public services if we change, update and modernise.

Stephen Byers is preparing a white paper on local government matching reform with new local powers to ensure better services.

This afternoon Alan Milburn will tell us how through the Private Finance Initiative we have been able to start 31 new hospital developments

And on London Underground we plan to invest not less public money but more, an extra £13bn of public funds, the biggest public investment programme in the history of the Underground.

And it is precisely because we are determined to avoid a repeat of the unacceptable extra costs of the Jubilee Line’s delays and overruns – nearly 2 billion pounds paid unnecessarily by the public sector to the private sector – that we are requiring that the private sector accepts its responsibilities, tied in to a proper partnership to raise capacity, improve safety, enhance reliability, and ensure that the 13 billion pounds we invest delivers the best public service and protects the public interest.

And in times of adversity we are also not less obliged but more obliged to meet our international responsibilities.

It is in difficult days like these we realise that we are not just isolated individuals, but fellow human beings bound together by common needs, mutual interests, shared, hopes and linked destinies.

And we know that if the idea of international community is to be more than words we are summoned to do not less but more to tackle world poverty.

To those suffering under the burden of unpayable debt we will not relax, but again at the G7 meeting I attend in Washington this week, ask all rich countries to step up their efforts to extend debt relief so that money paid by the poorest countries for debt today can be money spent on education and health tomorrow.

To those children in every continent, the 120 million denied the right to schooling, we will year by year advance towards the goal: by 2015 the opportunity of free primary schooling for every child across the world.

For those who suffer from TB, malaria and aids, governments will this year double the new Global Health Fund from 1 billion pounds in July to 2 billion pounds by December.

But we know that this is just a first step towards meeting the international development target to cut infant and maternal mortality by two thirds.

So conference, in the years ahead let the words spoken of Robert Kennedy now be our guide: we see suffering and seek to heal it, see pain and seek to end it, see injustice and seek to overcome it, see prejudice and seek to triumph over it.

Friends: it has always been deep in the character of our party and our country that even in the hardest times, even when faced by clear and present danger, we have never flinched from international action to right wrongs.

And we have always held true to the high ideals of freedom, social justice and opportunity for all.

We remember the generation that even in Britain’s darkest hour never lost sight of its commitment to social progress.

Our party in that generation – forging a vision for the future while meeting the awesome challenges of the times.

Never losing sight of the values that bind us as a country together.

Not isolationists but internationalists, thinking beyond self interest to the needs of others.

Believing in something bigger than ourselves: a shared faith – that not just some but everyone whatever their birth, background or race should have every chance to achieve their potential.

So conference: inspired by our history, more determined because these are testing times, let the message ring out: we can and we will achieve in our generation that better future.

Security and stability – yes.

And upon that platform a Britain of full employment.

And of enterprise open to all.

An end to child and pensioner poverty.

World class public services.

And not just nationally but internationally justice for all.

These are the great purposes that we as a party have set ourselves, the great goals that are the standard by which over the coming years we will be judged.

This is the vision which can unite our whole country and inspire in Britain a new progressive consensus.

Have confidence: there is a purpose in politics.

Our values are right for this time.

Nationally and internationally, we can rise to all the challenges if we meet them together.

Have confidence and together we can and will build the Britain of our ideals.

Gordon Brown – 2001 Speech to the TGWU Conference

Below is the text of the speech made by Gordon Brown, the then Chancellor of the Exchequer, to the TGWU Conference on 5th July 2001.


I am delighted to be here today to address this conference.

And as we thank you we give you this promise too: as a Government we will work every hour, every day, everywhere we can be, to justify the faith you and the British people have placed in us.

And after four years of Government under Tony Blair’s excellent leadership, I believe that we are more determined than ever to implement in Government our values of justice and fairness.

Since the time I went to school and grew up beside a mining community – since the first factory closure I remember being announced in my home town — and for a whole generation our lives have been dominated by unemployment: long term unemployment, youth unemployment, the fear of unemployment, the poverty and insecurity caused by unemployment.

I remember when I first became an MP a young couple coming to see me, both in tears, who having lost their jobs, knew they would lose their homes too.

I remember too the tragedy of the miners in my constituency, steel workers, dockyard workers, transport workers TGWU workers redundant in their forties who feared they would never work again.

So I want communities where young children getting up and going to school each morning see a whole community going to work.

And 20 years ago, 10 years ago, even 5 years ago young people tried as hard as now to find work – they were applying for jobs, they were training for jobs. Don’t tell me these generations of young people didn’t have talent or potential, couldn’t learn or hold down a job. What they needed was a government on their side.

But for years in opposition we could do nothing about it. All we could do was protest. Together we marched for jobs, we rallied for the right to work, we petitioned for full employment. All of us, trade unionists, Labour party members, Labour MPs. But out of government we could not create jobs.

So the day we came into Government we acted  – with a windfall tax to pay for our New Deal.

And I say it was right that five billions be transferred from the richest utility companies in our land to create jobs in the poorest and most deserving communities of our country.

And every time a young person denied a job under the previous Government gets a job under this one we should be proud of the New Deal – that this is what can happen when we work together.

And we took action too, to secure the essential precondition for full employment – economic stability not boom and bust.

Remember all those who said we could never manage the economy.

But it is because we rejected short-termist free for alls, the take-what-you-can, irresponsibility — and it is because we put faith in our values of economic responsibility — building from solid foundations, looking to the long term — that with Bank of England independence, tough decisions on inflation, new fiscal rules, hard public spending controls, we today in our country have had economic stability not boom and bust, the lowest inflation in Europe, long term interest rates and mortgage rates for homeowners lower than for thirty five years.

And when we are told that low inflation, low interest rates and low borrowing are nothing to do with the decisions of this Government and are just a matter of good luck, let us ask them: if it was so easy to keep interest rates and inflation low, why did their policies give us 15 per cent interest rates, 11 per cent inflation, a £50 billion deficit and why did they repeatedly plunge Britain into boom and bust?

It was not by lucky chance but by difficult choices that we now have a more stable economy.  And it won’t be by a lucky chance but by hard choices in this Parliament – on extending competition, enterprise incentives – including our capital gains tax reforms – and reform – that we will build upon that stability a deeper and wider prosperity.

Now I understand the concerns people have today in the high technology sectors because of the American downturn — and as a Government we will help people, on their side to cope with change– and I understand also the worries people have about the exchange rate and we will continue to do more to recognise the vital contribution of modern manufacturing to exports, innovation, and our great regions.

But we know too that what manufacturers fear most is a return to the old boom and bust.

So there will be no return to the short-term lurches in spending policy or tax policy that would put long-term stability and public services at risk.

No inflationary or irresponsible pay rises, which put youth or other jobs at risk.

No relaxing our fiscal disciplines as some would like.

No change but consistency in our European policy – in principle in favour of the euro, in practice the five tests that have to be met.

And no change in the drive that Bill, you and I are all engaged in – with more competition not less, more innovation not less, more investment not less, and more not less small business development – to make Britain the most enterprising, productive and therefore prosperous economy over the next decade.

Our stability is for a purpose and I can report to you today that the full total of jobs we have together created since 1997 is 1 million 250 thousand jobs, more people in work today than at any time in the history of our country.

Unemployment among men the lowest since 1979.

Unemployment among women the lowest since 1976.

Youth unemployment now the lowest since 1975.

Long term unemployment now the lowest since the early 1970s.  Unemployment among single parents and the disabled lower than ever.

But as long as there is unemployment we will not be complacent.

With 300 million a year we are extending the New Deal so that every one of the long term unemployed and their partners in all parts of the country can have new opportunities.  And as we offer special coaching help for others hard to employ we will not hesitate to take additional measures, including greater sanctions, in those few instances where they are needed, to get people back to work and achieve full employment in this country.

Unemployment in Scotland, Wales, Northern Ireland, the North, South West, and Midlands, the lowest for more than twenty years.

But that is not good enough. With an additional 500 million pounds allocated to Regional Development Agencies in every area of Britain and our request for jobs plans for the regions, our aim is full employment not just in one region but in every region of the country.

Unemployment among the over 50s is now falling and is at its lowest on record – half a million more over 50s in jobs since 1997. But we want to do more to end what has been a scandal in too many areas: age discrimination against the over 50s, hence we have a guaranteed minimum income of nearly 190 a week for the over 50s returning to full-time work after being unemployed for more than 6 months.

And for men and women with disabilities who suffered most in the 80s and 90s and those able to do some work who for too long were denied their right to work, we are establishing new rights as well as new opportunities.

So it is the right policy to offer regular interviews on a three yearly cycle as we invest £130m in a New Deal service for the disabled, offer a guaranteed minimum family income to disabled men and women of £246 a week for full time work; and invest in the advice, help, training and support that ensures there is work for those who can work as well as security for those who can’t. A Britain where now no one is excluded from opportunity.

And because we believe a fair society is essential to a productive economy, just as there are new responsibilities at work, we are ensuring new rights:

–  new rights of recognition for trades unionists;

– the right to four weeks paid holiday;

– and because never again do we want mothers or fathers refused time off to see their sick child through a hospital operation, the right to time off when a family member is ill. This is what a good family policy is all about, backed up by the first ever National Childcare Strategy.

My belief is in equal opportunity for all.

Yes the minimum wage was a start as was the Equal Pay Act and I salute all those in this Union and other Unions who had the courage to take pioneering action to establish the right to equal pay.

But after 30 years of equal pay legislation it is now the right time to go further in ending discrimination to speed up procedures and ensure new rights for women so that no one will have — as in the past — to wait years for their right to equal pay to be realised.

And for part-time workers the right to the same treatment as full-time workers – same hourly rate of pay, same access to company pension rights, same rights to annual leave and maternity leave.

And because in no part of our society should there ever be discrimination – and in particular never racism tolerated – we will continue to remove barriers of prejudice, discrimination and racism.

And we will extend women’s rights. Maternity pay which is 62 pounds will be increased in successive stages to 100 pounds a week – as big a rise in two years as in the previous forty. And from 2003, the statutory obligation to maternity pay will be raised from 18 weeks to 26 weeks.  And we will introduce two weeks paid paternity leave, set at the same level of 100 pounds.

And we will support every trades union as you work with employers for access to learning direct in every workplace and to advance training so that together – employees, employers and government – we can create the best trained workforce in the world.

Under the previous Government more was spent on debt interest than on our schools. Next year we will spend £10 billion more on schools than on debt interest.

The reason that we can invest in health and education is that we have managed to transfer resources from paying the bills of past failure to investing in future success.

£9 billion cut from the typical costs of debt and unemployment before; £9 billion more each year for the NHS and education now.

That is what we mean by putting schools and hospitals first.

The reason I am concerned not just about nursery education and standards in the schools but higher staying on rates and wider access to college and university, is that I remember my school classes of the 1960s when it was for only a fraction of young people that a university place was available.

It was a scandal of wasted potential.

And I see today that there are still thousands of young people who have the ability and should have the chances that I – and others – were able to enjoy.

It was a scandal of wasted potential then and it is still a scandal now.

It is time to ensure that not just a minority have access to higher education but for the first time a majority by opening up recruitment and widening access so that our colleges and universities can draw on the widest possible pool of talent.

And let us be clear about the choice in this Parliament on our great public services.

It is between investment matched by reform under us and cuts leading to the run down of public services under the Opposition.

Our choice is not to cut but to invest more.

That is why in the Budget we announced a long-term assessment of the technological, demographic and medical trends over the next two decades that will affect the health service.  This review, led by Derek Wanless will report to me in time for the start of the next spending review.

Let me be clear about my commitment to the public services.  Every opportunity I have had – the best schooling, the best of health care when ill, for many of us the best chances at university – every opportunity I have enjoyed owes its origin to the decisions of past Labour Governments, decisions we made as a party to open up opportunity, to create a welfare state that takes the shame out of need and to fund a National Health Service open to all.

So under this Government the NHS will remain a National Health Service – a public service free at the point of use with decisions on care always made by doctors and nurses on the basis of clinical need.

And we will never tolerate replacing the NHS by privatised medicine where poverty bars the hospital entrance, where they check your wallet before they check your pulse.

And because we believe in nothing less than the vision of 1945 – an NHS free to everyone on the basis of their need not on the basis of their wealth – we will raise health service spending from 54 billion last year to 59 this year to 64 next year to 69 by 2003-04, an annual average increase over those years of 6.5% above inflation – the largest, sustained growth in NHS spending in the history of the health service.

And let me say: it is because as Tony Blair said yesterday, we have expanded and reformed the private finance initiative – and will continue to implement the ten year NHS plan  – that it has been possible to design and start 68 new hospital projects worth 7.6 billions since we came to power.

In the public services we are employing more, investing more, and – in partnership with the private sector – building more.  And will continue to do so.

But let us also be clear: just as schools exist for school children the NHS exists for patients; public services exist not for the public servant but for the public who are served.

And our aim must be that every classroom has the best teacher, every school the best staff, every operating theatre the best doctors and nurses, every hospital the best NHS staff.

Our aim is that every public service has the best public servants.

And those of us who believe passionately in the public services must modernise and reform so that public services can best serve the public.

Those of us who believe in the public services must learn from both the public and the private sectors and revitalise our public services from the inside.

And – as Bill Morris has said this week – we should aim for higher productivity in our public services, backing management as well as employee training. And can I tell you that we are supporting the National College of School Leadership and the Leadership Centre for the NHS, devoted to doing more to improving within the public services the quality of public service management.

And we will invest in transport.

For years this union has rightly told us of the social and economic importance of investing in transport.

And you have led the campaigns for free concessionary travel for the elderly.

And because of your and others representations we are now, over the next ten years, investing 180 billions in public transport – on our roads and in rail.

It is the biggest public investment programme in transport history.

Hundreds of new roads, 60 billions invested in rail and of course the proposals for investing in the London Underground which Steve Byers is going to be announcing today, proposals that I believe are the best ones for London and Britain.

Under the previous Government the average public investment in London Underground was just 395m a year. In the next 15 years the average public investment will not be £395m but rise as high as 900m a year – investing at nearly three times the old rate – the biggest single investment in the underground in its history.  More investment by the public sector in the next 15 years than we saw in the last hundred years

And when billions of your money are being invested you would want us to ensure not only best value for money but the best possible public service.

So to construct the new infrastructure that will increase the underground’s capacity to 1.3 billion travellers each year, the construction and engineering companies – like many of you work for – these private sector contractors will simply continue to do the work as they always have in digging the tunnels, building the infrastructure and replacing the track. But now for the first time they will have to take responsibility for what they deliver. So they will have to pay for the overruns, the delays, the faults in the construction and the mistakes that lead to extra maintenance.

So that we do not have another Jubilee Line fiasco – 2 years late, massive overruns – which if repeated in the new Underground investment programme would cost us two billion pounds.

And while the private sector directs its skills and expertise in risk and project management towards maintaining and improving the infrastructure, the public sector in the underground – and public sector staff – will operate the track, run and provide signalling, run trains and stations on every line, set service levels, set the standards and ensure safety, and be in charge of an integrated tube network from 5.00am to 1.00am.

At all times safety paramount with the London Underground and the safety inspector the final decision-maker on what needs to be done.

And we will do nothing unless we have the approval of the health and safety executive on the highest of safety standards.

Our choice is clear. Not a return to the old ways, not the short-termism of the past, but an approach that makes sure that the billions we invest provide the best service for the public.

Because of the work done by the TGWU, the retired members association whose conference I visited many years in the eighties and nineties, and in particular Jack Jones – the champion of justice for pensioners – we can now aim for the end of pensioner poverty in our generation.

And let me promise today that in addition to free TV licenses for the over 75s, raising the basic state pension by £5 – and £8 for couples – this year, we plan to pay the winter allowance at 200 pounds this year and our new pension credit – introduced from 2003, for most rising higher than an inflation link or an earnings link  – will reward rather than penalise modest occupational pensions and savings to ensure my aim: that every pensioner enjoys a share in the rising prosperity of our country.

And as stage by stage we do more year on year to improve care of the elderly, so we must recognise we must do more to tackle child poverty which is, in my view, a scar on the soul of Britain.

It was a matter of shame for Britain that when we came into power one child born in every three was being born poor and, having taken one million children out of poverty in our first term, our ambition, in what I believe is the best anti-vandalism, anti crime, anti delinquency, anti deprivation policy, is to take the next one million children out of poverty. And I urge you all to support our nationwide crusade so that no child is left behind.

Why we can’t be cynical

So let us affirm our commitment to full employment, ending child and pensioner poverty, and the best public services and action to end poverty.

Let us reaffirm that giving every child the best start in life, every adult a job, every pensioner dignity in retirement, everyone decent public services are great causes worth working for, campaigning for and fighting for.

And let us affirm that there are great causes not only at home but all across the world that are worth fighting for, campaigning for and voting for.

We reject the idea that there are no great causes when there are one billion people in this world trapped in avoidable poverty, millions weighed down by the unnecessary burden of debt.

On Saturday I go to the G7 meeting and then in September to the Children’s Summit, in October to meet the IMF and the World Bank – a campaign which Nelson Mandela and others are leading so that instead of one child in every seven in Africa dying before the age of five, calling on the pharmaceutical companies and all governments to join us in widening access to life saving drugs and health care and eradicating avoidable infant deaths.

Instead of 120 million children denied education our objective is clear: every child in primary education.

Instead of 1 billion condemned to poverty, our aim is to halve poverty by 2015.

So let us answer the cynics by our actions, showing that when governments intervene to tackle injustice they are not violating rights, they are righting wrongs.

And when I visit Asia and see children dying avoidable deaths in poorer countries, when I see in South Africa young men and women wanting to know that the right to vote will mean the right to work too, when I see in all continents needless, avoidable, remediable suffering and pain that is the result of a poverty that we can eradicate and an injustice we must fight, I know – as the founders of this union knew one hundred years ago – that we as a union and as a party exist not for ourselves but for a larger and noble purpose: that we are all men and women who feel, however distantly, the pain of others; who believe in something bigger than ourselves; who in Robert Kennedy’s words, see suffering and seek to heal it, see pain and seek to end it, see injustice and seek to overcome it, see prejudice and seek to triumph over it.

Let us answer the cynics and tell the people that it is when politics fail and governments walk away that children are malnourished, that men and women go without jobs, that pensioners die in poverty, that public squalor exists alongside private affluence and potential is left unrealised.

It is when politics succeeds and governments engage that all can begin to have opportunity and no one is left out; that all our people have the chance to make the most of themselves and no one and no area is excluded; and that justice can triumph.

If by our actions we can lift one child out of poverty, give one young person a chance of training and a job, give one more person suffering from pain the chance of the treatment they deserve, give one more classroom the books and computers it needs, secure for one more pensioner a greater measure of dignity and decency in retirement, then we can be proud to have done something, not just for ourselves, but for our community and our country.

But if we can help millions we can in Tom Paine’s words make the world anew. So let us be the generation that abolished child and pensioner poverty, built modern public services, created full employment, tackled world debt and poverty and took the next steps to prosperity for all – causes worth fighting for.

Our task, our challenge, our manifesto commitment, a programme of change for a generation and working together this can be our achievement.

Gordon Brown – 2000 Speech to TUC Conference


Below is the text of the speech made by Gordon Brown to the 2000 TUC Conference.

Rita and friends, to be here in Glasgow, where I was born, on the second day of the first Congress this century, exactly 100 years from the date when trades unions came together in the Labour Representation Committee to create the Labour Party, allows me, first of all, to pay tribute to those who have given a lifetime of service to our Movement and those, in particular, on the General Council of the TUC who are retiring this year ‑ and I have worked with all of them. I want to thank Eddie Warrillow, Wendy Evans, Tony Cooper, Bob Purkiss, David Evans, Anne Gibson, Hector MacKenzie for all the work they have done as they have been members of the General Council.

I want to congratulate Rita Donaghy, first of all, for giving me good advice and, secondly, for her new Chairmanship of ACAS. Your work on the Low Pay Commission and on the TUC General Council makes me absolutely sure you will be an excellent Chair of ACAS from October 6.

This week, in particular, I want to mark also the retirement of two General Secretaries who have given years of dedicated service, whose contribution will be remembered in every part of the country ‑ everywhere where trades unions exist ‑ and whom I have the privilege to count as friends: Ken Cameron and Rodney Bickerstaffe. Perhaps people do not know ‑ and Ken, my very good friend, allows me to tell you this story ‑ but Ken Cameron first made his name not in trades union affairs but in journalism. It was not a Saturday afternoon post‑match celebration. It was a Saturday morning pre‑match celebration that forced Ken to move very quickly from sports journalism into other affairs. Ken will be able to tell you all the details of how he was filing the results from the Drumnadrochit Highland Games with less than the usual standards of journalistic accuracy. In fact, every result he sent round the newspapers he got wrong. All those who had won were said to have lost: all those who had lost were said to have won. You can imagine the confusion and consternation that Ken created. The result of this youthful indiscretion was journalism’s loss but it was the Fire Service’s gain.

Ken, with this advance on your autobiography, can I congratulate you on your years of service. It has been a privilege for all of us to work with you. These are decades of distinguished service to the labour movement.

I want, also, to congratulate Rodney Bickerstaffe, not only on his work but on his dedication. His career began with the inspiration of his mother. It was built on years of local activity and even as General Secretary you know he was willing to visit every local branch, no matter how small. When I recall those speeches he made in the dark days of the 1980s at our Conferences, I do thank you, Rodney, for keeping hope alive.

I remember not only the passion of your speeches but also the humour ‑ what you said of Conservative Ministers at that time. Who was it of whom he said he had suffered from a charisma bypass? Who was not just a yes man; when Mrs Thatcher said no he said no, too? Of whom was it that you said he was, three years ago, unknown throughout Britain; now he was unknown throughout the whole world? Who was it of whom you said he lost the art of communication but not, alas, the gift of speech. That is what he said about the Tory Cabinet. I would not like to venture to think what he is saying about the Labour Cabinet. Rodney, you can retire in the knowledge that the causes of your life’s crusade are now being enshrined in the new laws of our land.

Let me say this. The Minimum Wage Act of 1998, which was brought in after 100 years of labour movement agitation since Keir Hardie, was not won by politicians at Westminster or administrative action in Whitehall and it was not won just by a vote in Parliament. The minimum wage owes its origins to, and was won by hundreds of thousands of trades unionists like all of you represented here today, and none of them did more than Rodney Bickerstaffe.

To speak to you here in Glasgow, with its great traditions, is, for me, a special privilege. As I said, Glasgow is where I was born. I was a son of a Church of Scotland minister who had come to Glasgow in the depression of the 1930s. His church overlooked the Govan shipyards and when I meet Govan workers later today I will say we all have a shared interest in working, as we will, to shape the shipbuilding industry of our country.

My father’s predecessor in Govan was a friend of the Labour Clydesider MPs. He, in turn, had followed the first Church of Scotland minister to become a Labour Member of Parliament. It was here in Glasgow that trades unionists and ethical socialists came together for a great common cause. Their Statement of Shared Mission and Common Purpose, which was written 78 years ago, inspired a generation of socialists and inspires me now. They said they would strive without ceasing to end mass unemployment; they would bear in their hearts the sorrow of the aged, the widow and the poor; that their lives would not be without comfort; that they would have regard to the weak and those stricken by disease and who had fallen in the struggle for life, and they would fight for justice ‑ not just in our country but in every continent.

These pioneers were idealists but they were not dreamers. They knew how much easier it was to tolerate the status quo than to reform it; easier to conserve than to change; easier to succumb to vested interests than take them on; easier to take your own share than to fight for everyone to have a fair share; easier to see progress as moving up on your own than ensuring everyone moves up together.

But hard times did not teach them selfishness. It taught them solidarity. They rose above their hardships to insist that injustice should not just not happen to them; it should not happen to anyone. They had a vision. The trade union movement and the labour movement is built on that vision. It is a simple but fundamental and unshakeable set of beliefs that I know all in our movement share. It is that, in Britain, opportunity and security should be open not just to a privileged few; it should be open to everyone. That is what I come here to say today.

It is because we believe in opportunity and security for all that I come here to affirm our commitment as a Government to the goal of eradicating child poverty in our generation; the cause of educational opportunity not for some but for all; a National Health Service built for the needs not of some but for everyone, to breaking the vicious cycle of world debt, poverty and injustice internationally. This is my theme today, to build, through growth and productivity, full employment for all in our generation.

Friends, for 20 years all of us ‑ all of us here in this hall ‑ have marched for jobs; we have petitioned for jobs; we have demonstrated for jobs; we have rallied for jobs. For 20 years the TUC and every individual trades union here has rightly said, and we have all said to each other, unemployment is the great economic social, indeed, the moral cause of our time. For nearly 20 years we could only protest about unemployment. Twenty years ago, ten years ago, five years ago young people tried as hard then to find work. They were applying for jobs. They were training for jobs. Do not tell me that that generation of young people did not have talent or potential, could not learn or could not hold down a job. But what they needed was a Government on their side.

If only one young person in this country had got a permanent job as a result of the New Deal that the trades unions and the Labour Government created together, then that would have been worthwhile in itself. But there are now, since 1997, 500,000 who are benefiting from the new deal and nearly 250,000 who are now in jobs. Every time a young person, denied a job under the Tories, gets a job now we should be proud of the new deal because that is what can happen when we all work together.

I believe it was right, even under the fierce opposition of Tories, Liberals and the utilities to take the decision to tax the excess profits of the privatised utilities. We did it to the tune of £5.2 billion and we have now put that money in the poorest, highest unemployment areas and communities of this country. I hear what is said today about the pain of unemployment. I hear also about the needs of manufacturing, and we will respond.

But I can report to you that, together, since 1997 we have created 1,035,000 jobs. Unemployment among men is now the lowest since 1980. Unemployment amongst women is now the lowest since 1976. Long term unemployment is now the lowest since the 1970s but as long as there is unemployment we will not be complacent.

From April next year, I can tell you that there will be a new investment of £300 million. We are extending the new deal so that every one of Britain’s long term unemployed in all parts of the country can have new opportunities to work.

Unemployment among young people is now the lowest since 1975, but as long as one young person is without a chance, there is more to do. With an extra £300 million from next April, concentrating on those people and places who have still been left behind ‑ those with literacy problems in particular ‑ we will now intensify the New Deal so that no teenager is without training or work.

Unemployment among single parents is now falling for the first time ever. But that is not good enough.

From April next year, with £400 million extra a year, our new programme of choices will offer training, jobs and, yes, at last, a national child care strategy to help all parents who want it and to help them work.

Unemployment rates amongst the disabled are falling for the first time in decades. I want every person with disabilities empowered to use their abilities if that is their wish. So from April we are going to extend the New Deal so that disabled men and women can have the right to work too.

Unemployment in Scotland, Wales, Northern Ireland and the regions, the North, the South West and others is the lowest for more than twenty years. But that is not good enough, as we have heard today. With 500 million more for regional development agencies our aim is full employment not just in one region of the country but in every region of this country.

Unemployment among the over 50s has been rising for decades in our country. It was a scandal in the 1980s and 1990s that thousands of men over 50 and women over 50 were thrown on the employment scrapheap. Now since 1997 there are half-a-million more jobs for people over 50, but we want to do more and end the scandal of age discrimination in work. That is why we are introducing a guaranteed minimum income for unemployed men and women over 50 returning to work.

Building from this starting point of a million more jobs and the strength to take the tough decisions to achieve stability, this is a moment not for complacency but it is a moment of challenge and opportunity for our country, and I believe the prize for all of us is great. It is not just full employment for a year or two that we seek but it is full employment for our generation.

To achieve it, first we must entrench an anti-inflation culture of long-term stability, a tougher New Deal to strengthen full employment, higher productivity – far higher to sustain full employment – a new unionism and public services to underpin full employment, and new rights against discrimination and exclusion so that there is, for everyone, the chance of full employment.

Our first task has been to escape from 18 years of boom and bust and never to go back. Let us not forget, despite all the difficulties, that when we had the Tory 15 per cent interest rates, one million homes were repossessed and one million jobs were destroyed in two years in manufacturing. It was not the Conservative Government but Britain’s hardworking people who bore the biggest burden.

I remember a couple coming to see me, both in tears, who, having lost their jobs, knew that they would also lose their home and they had nowhere to go. I remember, too, the tragedy in my own constituency in Fife of the skilled craftsmen, the miners and the steelworkers in Lanarkshire, redundant in their forties who feared that having lost their jobs they would never work again.

After three years we can reflect on where we are now and what we still have to do. Remember those who said that a Labour Government could not achieve economic stability and growth. Remember the Tory prediction, a downturn made in Downing Street. Let us just say that these forecasts have not aged well. Let me explain why. It is because we rejected Tory short-termist, take-what-you-can, irresponsibility – and it is because we put our faith in labour movement values of economic responsibility, planning for the long-term and building from strong foundations, that with the Bank of England independence and new fiscal rules, means we now in our country have inflation close to its lowest for 30 years. But we cannot take it for granted.

It was not by accident but by taking action that we have steady sustainable growth and investment is rising. It is not by default but by design that we now have the lowest long term interest rates and are repaying our national debt. It is not by chance but choice that we now have 28 million fellow citizens in work. This is what happens when the British people and their Government work together.

Remember all of those who opposed Bank of England independence and said our policies would mean a future of higher unemployment and lower public spending for the long term. Remember those who resisted our fiscal rules when we insisted on fiscal discipline and said we would never be able to spend on health, education and public investment. Unemployment is down, and because our prudence is not the barrier to spending but has been its pre-condition, spending on services is rising by 5 per cent in real terms for the next four years. Health Service spending is rising by 7 per cent in real terms this year, education spending by 10 per cent this year and public investment rising by 30 per cent this year.

But our task is even bigger than creating stability for a year or two. It is – and this is the next and critical stage for us – to entrench for Britain a culture of long term stability so that people no longer expect, as they have in the past, that every period of growth will be followed by an inflationary wages spiral and then boom and bust recession. And every event tests our resolve to end that short-termism of the past and to steer a course of long-term stability, which is the real foundation for full employment.

I understand the concerns about the exchange rate with the euro and we will continue to do more to support manufacturing. I understand the concerns that people have, too, about world oil prices and petrol prices, but we will not return to short termism in any respect and we will not put at risk our hard won stability. So there will be no short term lurches in spending policy or tax policy, no irresponsible spending increases or inflationary pay rises that put youth jobs at risk, there will be no quick fixes or soft options that would put long-term stability, then our public services and then our policy for full employment at risk. We are not going to return to the stop-go of the past.

Governments have to deal with both national and international events and oil and petrol raises the issue of both. When we came to power in 1997 the deficit was £28 billion. Yes -we had to face up to that deficit and we dealt with that deficit immediately. So we retained and extended the fuel duty escalator that had been operated by the Conservatives in successive years every year since 1993, and there were good environmental reasons as Kyoto proved for doing so. But last November – immediately – I had cut the deficit and was able to put in place new environmental measures. I said we would end the escalator, and we froze, and for four million cars reduced, car licence fees in a March Budget that was welcomed by the motoring industry.

Today, now that the deficit is down, let us note that the existing fuel revenues are not being wasted but are paying for what the public wants and needs – now paying for £10 billion of extra investment in schools and hospitals this year – a total of £18 billion extra invested in our public services, including roads and public transport, money well invested at the service of all the people. Yes, we have higher excise duties than in Europe but we also have just about the lowest tax rates on work, the lowest business tax rates, the lowest VAT rates and, unlike America, and we should be proud to say so, we fund from these revenues a truly National Health Service which is open to all the people.

Governments are, of course, subject not just to national pressures but to global pressures too. In our three years in Government we have had to deal not just with debt and deficits in Britain but like other governments we have been tested by the financial crisis that has spread from Korea to Asia, then to Russia and a slowdown in the international financial system.

We are being tested, too, by an oil price that first fell from $19 when we came to power to $11 and then has risen to above $30, trebling in 20 months. Of course, when the oil price shifts from $11 to over $30 every economy is affected, every country’s petrol price has risen, and I understand very acutely the pressures that manufacturers, hauliers, farmers and every day millions of consumers face. But it is precisely because there is volatility in oil prices that we should resist any lurches in policy and we should resist returning to the old short termism of the past. Instead, because of that volatility, we should insist on steering a long term course of stability.

Our first duty is to ensure internationally, as we are pressing here in Britain, that oil flows from the wells to the refineries, to the petrol stations and then to the consumers, and this we will do, without interruption by barricades or blockades.

Our second duty is to ensure that, with our international partners, we maintain a course of stability to ensure international economic growth to the benefit of us all, and this we will do.

I tell you that this week, among every one of Europe’s 15 governments, as in America, in face of oil price volatility, it is not shifts in oil tax rates that are now being considered but it is pressure on the oil producing countries to raise their production and cut their price. When OPEC countries themselves have stated that their sustainable oil price rate is not the $34 that we have seen but $22-$28, none of us should relax in our representations until they ensure levels of oil production that bring the price at least to the levels that they themselves plan. Moreover, because cartels should not exercise such power anywhere, we will now look even more intently at how to diversify our energy supplies.

The third lesson that I learn is this. It is precisely because of the volatility of these oil prices that we should refuse to lurch between budgets from one policy quick fix or soft option to another – lurches that would inevitably be based on uncertain prices and unknown revenues. Instead, we should steer a course of stability.

Short termism is the old way and it brought us the stop-go, boom-bust economy, the ups and downs of the past, and this I will not endorse. Let me just tell members here that when the oil price was $10, experts came to us and they advised us that our Government should allow the closure of every coal mine in our country because the oil price was so low, and this, I and my colleagues refused to do. Instead, for the correct long term reasons, we sought a level playing field for coal, ended the discrimination against coal and invested £100 million extra in the future of the industry, a policy I believe that the British people support.

It would be equally wrong and short termist to tie tax rates to what could be a temporary rise in oil prices as it would be wrong to lurch in the other direction between budgets and suddenly tie tax policies and other policies to a temporary oil price fall. In fact, in the last six months rising world oil prices have raised VAT revenues by only £20 million net, and over the last 12 months by £400 million. It would, therefore, be the worst of short-termism to make permanent shifts in fuel duties because of a one-off change in oil profits and, thus, oil revenues that might never be repeated. So we will listen but we will not fall for the quick fix and the irresponsible short termism of making tax policy this afternoon because of blockades this morning.

We will continue to make policy as we have done in Budgets and at Budget time, and I believe that the British people want long-term stability and it does nothing for full employment or for growth in our economy to return to the short-termism of policy lurches that brought us boom and bust in the past.

We will not change our European policy either – in principle our support for the single currency, in practice the five economic tests that have to be met. So we will continue to reject the Tory policy that panders to those who urge isolation and withdrawal, something that everybody here agrees would put jobs and stability at risk.

In our country today we have created greater fiscal and monetary stability, and, yes, there are a million more jobs, but, yes, too, as John Monks said a few minutes ago, there is a productivity gap of 30 per cent with our competitors, and if we are to achieve full employment we must bridge that, too. When I listen to those who say that we can now relax our efforts, return to the old ways and ignore long-term challenges, we will not fall for that complacency either.

Instead, from the platform that has been created, a new found stability and rising employment, I want today to challenge the whole of Britain – British industry, management, the unions, the public sector and the Government, all of us, to join together in seizing, not squandering, this hard won time of opportunity -never again to retreat back, as we have done in every previous economic cycle, into complacent short-termism, not to fight yesterday’s battles, but free of complacency to address tomorrow’s challenges and to use our new found stability and our growing strength in a national productivity drive to achieve a rise in productivity that will bring also a rise in prosperity that outpaces our competitors.

To achieve this, we must, day by day, week by week, year by year, have the discipline to overcome the old British problems of short termism and under investment, low productivity and inadequate investment in skills, over-complacency in the boardroom, restrictive practices wherever and whenever they exist, and we should use this time of opportunity to remove all the old barriers to employment and to prosperity for all.

I can tell you what the Government will do to contribute to this productivity drive. We will double public investment to £19 billion, with permanent capital allowances and R and D credits, we will be investing more in manufacturing industry in our country. One billion more pounds will be invested in science so that British inventions can lead to British manufacturing products and to British jobs. For the first time ensuring an employee share ownership plan that gives most benefit not just to a few employees on share options in a firm but benefit to all. We will make the biggest investment in education and skills in our country’s history – £10 billion more by 2004.

But winning at work – this is the theme of the Congress – is not simply making promises about what a Government can do, but it is setting goals we can all meet together. In the old days management said it was all up to the unions. The unions said it was up to management and both said it was up to Government. I say it is now up to us all working together. So I am here not to make new pledges but to summon us to new challenges.

All the evidence shows that when unions win at work on a productivity agenda, prosperity and employment increase. So we must, therefore, be honest with each other. Just as prosperity for all is undermined by the wrong kind of Government, so too in the past the wrong kind of management and the wrong kind of unionism have failed us as surely as the wrong kind of Government. When we know that in some plants our productivity is the best in the world and in other plants even in the same industry it is only half as good, our challenge together must be firm by firm, sector by sector, managers and union members, free from complacency, we address those barriers to productivity: the levels of our skills; the levels of investment; standards of management and industrial relations all round; barriers to the introduction of modern technology and questions of best practice and who does what in the workplace.

Our challenge is to work together to ensure that the benefits go, not as in the past, to a few but as they should always have done, the benefits go to all who play their part.

We, the Government, will accept our responsibilities in the public sector, inviting trades unions to work with us to improve both conditions of service and the condition of each service. In an environment of continuously low inflation, I ask unions across industry to consider seriously the benefits of moving from the annual cycle and extending multi-year pay deals.

Friends, great historical changes are at work, even more dramatic than the changes a century ago when craft unionism transformed itself into new industrial unionism. Now, in this new century, old industrial unionism is transforming itself into a new industrial unionism: – our enduring values, justice and just rewards for all remain the same; our objectives bolder than before, defending our members against the threat of poverty, now about ensuring all our members have the chance to realise their potential to the full; – and the surest way, the great drive of 21st Century unionism, to meet that age old aim of enhancing the value of our labour, and this is done best directly through education and training that will enhance the value of each of our skills.

So this Government will do everything in law, in financial support and in support, as you as trade unions, bargain on the issue of skills. Let me be clear about the scale of our ambitions: one million individual learning accounts, nearly a million able to benefit from adult literacy courses and the right to free or tax free computer learning from October 1. October 1 is the start of the new University for Industry – what, from the 1970s the Open University achieved for thousands in higher education through TV and distance learning as second chances, we are now ready to achieve for millions in lifelong learning through the University for Industry, using cable, satellite and interactive media so that people can learn direct in their workplace and direct in their home.

For anyone who needs it, our aim is any course of study at any grade at any age. We will support trades unions as they push that skills agenda. No one should be left out, because we believe a fair society is essential to a productive economy. So we are ensuring new rights for working people. Never again do we want mothers or fathers refused time off to see their sick child through a hospital operation, the right to time off when a family member is ill. That is what a good family policy is all about; the right to four weeks holiday – we will work with you to publicise that benefit so that everyone knows that that benefit exists and can be enforced – the right to maternity pay now extended to all low paid workers; the right of recognition for trades unionists, and let us not forget that from May 4 1997, the right to be a member of a trades union, as at GCHQ, a right that no future Government should ever now dare take away. (Applause)

We are now asking the Low Pay Commission to report next year on a further rise in the minimum wage, and no one should be excluded, because in no part of our society should there ever be institutionalised racism again. We will remove the barriers of prejudice, discrimination and racism that exist in our society.

Having lifted the first million pensioners out of poverty, having cut VAT on fuel, introduced free television licences for all those over 75 and a £150 winter allowance for all, our next challenge, as Alistair Darling said yesterday, is to ensure that all pensioners who need it – our priority is those on modest occupational pensions and modest savings, who have lost out in the past – are helped not penalised for their savings and thrift. Our aim is to reward pensioners for their savings, to end pensioner poverty and to ensure that not some but all pensioners will gain from the rising prosperity of the nation.

As we raise Health Service spending from £49 billion to £54, to £58, to £63 to £68 billion by 2003, we will demonstrate by our actions that the best Health Service for each of us is not a private one that favours the few, but a public service run in the public sector by dedicated public servants in the public interest for all.

Friends, they say that in one term we could never simultaneously abolish 800 hereditary peers, introduce devolution to Scotland and Wales, ban hand guns, legislate new working rights, introduced a minimum wage and lead the world in starting to tackle the problem of poverty and debt relief, but under Tony Blair we have done that. Now they will say that we cannot achieve full employment, abolish child and pensioner poverty, build world class public services in health and education and meeting our productivity challenge. I tell you that we can and we will. The fruits and benefits of working together will not be just for some but for all.

The test of our country’s advance will be judged not by the heights reached by a few individuals but by the benefits to all when everyone works together. The test of our country’s success will be judged not as the successes of a few but how success can be shared throughout the whole community.

Our national progress, not a few people moving up on their own, but all of us moving forward together with the strong helping the weak and, as a result, making us all stronger. Not selfishness but sharing. That is the realisation of our enduring values. They are the same yesterday, today and tomorrow – an opportunity and prosperity that enriches not just a few but everyone.

Friends, that is our vision, that is our task. Have confidence that by working together this also can be our achievement. Thank you.

Gordon Brown – 2000 Budget Speech


Below is the text of the 2000 Budget Speech made by the then Chancellor of the Exchequer, Gordon Brown, on the 21st March 2000.

A year ago the Government forecast the British economy would grow at 1-1.5 per cent.

Today, I can report that in 1999, instead of the recession that many forecast, the British economy grew by 2 per cent.

And Britain has been growing steadily while meeting our inflation target.

Today inflation is 2.2 per cent.

For the third year running inflation is in line with our target. And the target of 2.5 per cent – which I reaffirm – will be met this year, next year and the year after that.

Because of the action we took in 1997 to stop inflation getting out of control, inflation in Britain has now been lower for longer than at any time since the 1960s.

For almost thirty years, Britain’s long term interest rates were, on average, 3 per cent higher than Germany’s. Now British long term rates are down to the levels in Germany and today lower than in the USA.

Amid the risks of an uncertain and often unstable global economy, we are determined to maintain our disciplined approach: determined not to make the old British mistakes of paying ourselves too much today at the cost of higher interest rates and fewer jobs tomorrow, determined not to make the old mistake of putting consumption before investment, the short term before the long term. Britain does not want a return to boom and bust.

That is why the Bank of England has been right to take pre-emptive action on interest rates and to be vigilant on wage inflation.

It is because the foundations on which we build are strong that the economy can meet our inflation target and achieve steady growth.

Our forecast is that growth this year will rise to 2.75-3.25 per cent, and next year and the year after it is forecast to be 2.25 to 2.75 per cent – in line with our view of trend growth.

Manufacturing is growing by 1.75 to 2.25 per cent this year and next.

And business investment grew by 7.7 per cent last year to 14.5 per cent of national income, with Britain since 1998 for the first time investing more of our national income than our major European competitors, and more than America.

This Budget is built on the realities of this new economy – that we will meet and master a new tide of unprecedented technological change by continuing to remove the old barriers to business investment and by continuing to expand employment opportunity for hard working families.

I can report that unemployment today is at its lowest for 20 years, that there are 800,000 more people in work since 1997 and that there are one million vacancies on offer.

Take-home pay is rising – by next year, for the typical family, a real terms rise in living standards of 10 per cent since 1997.

Britain’s economic success depends not only on monetary stability but on fiscal stability.

Today, I can report that because of tough decisions to cut the deficit in our first two years and lower long term interest rates, debt interest payments will be four billion pounds a year lower.

Because of the Welfare to Work reforms that have cut unemployment, social security spending on economic failure this year is a total of 3 billions less than the plans we inherited.

Today, Mr Deputy Speaker, the state of the public finances is sound.

In 1997 we inherited a current deficit exceeding 20 billion pounds.

A year ago I estimated that this year’s current surplus would be 2.5 billion pounds.

I can report that we have not only balanced the current Budget but our current surplus this year is forecast to be 17 billion pounds.

We have met and we will continue to meet, even on the most cautious of cases, our first rule of fiscal prudence, the golden rule.

And we are also meeting our second rule, the sustainable investment rule.

This year debt as a share of national income will fall well below the 44 per cent we inherited – to 37.1 per cent.

Last year we forecast that the overall budget would be in deficit for this financial year – that public sector net borrowing would be 3 billion pounds.

I can now report that due to the performance of the economy and to prudent management, the Budget is not in deficit by 3 billion but in surplus by 12 billion pounds.

Mr Deputy Speaker, we inherited a deficit of 28 billion pounds in 1997. This year we will make a debt repayment of 12 billion pounds.

Too often in the past, at the first sign of a cyclical surplus, governments have fallen back into imprudent ways.

It is because we have learned from the mistakes of the last forty years that this Government will maintain its prudent and responsible approach. The figures I am announcing today show that we will meet our fiscal rules over the cycle. We will meet our fiscal rules even in the most cautious case, on the most cautious assumptions, including the most cautious view of trend growth at 2.25 per cent.

And Mr Deputy Speaker, I can announce today that I have decided to lock in a greater fiscal tightening next year and the year after than we promised in last year’s Budget and Pre-Budget Report.

After the measures I announce today our projection is for a current surplus next year of 14 billion pounds and for the years after, surpluses of plus 16, plus 13, plus 8 and plus 8.

Debt to GDP, which was 44 per cent in 1997, will fall to 35 next year, then 34, and then 33 in each of the next three years.

Net borrowing will be minus 6.5 billions next year, that is, we will make a debt repayment next year of 6.5 billion pounds.

Then net borrowing in 2001-2 will be minus 5, a debt repayment of 5 billion pounds, with net borrowing for the years after 2002-3 of plus 3, plus 11, plus 13, well within our fiscal rules.

So from this stable platform of sound finances I am able to set out today our prudent and responsible approach for future years. Having met all of our fiscal rules, paid off 18 billions of debt this year and next, and locked in a greater fiscal tightening, we are able both to set a new envelope for public spending and investment for the years from 2001 and to cut taxes for hard working families.

I can report that our fiscal rules enable us to increase current public spending by 2.5 per cent a year in real terms for the 3 years from 2001 and double net public investment as a share of national income from 0.9 per cent next year to 1.8 per cent in 2004.

Mr Deputy Speaker, I have always said that our prudence is for a purpose.

And in this Budget, because of our continuing prudence, we can now take the next steps towards that purpose – a Britain of opportunity and security not just for a few but for all:

– with stability locked in, and enterprise growing, we can meet our prosperity goal – closing the productivity gap;

– with 800,000 more in jobs and the work ethic being restored, our full employment goal – employment opportunity for all;

– with 50,000 more students and standards rising, our education goal – 50 per cent of young people in higher education;

– with 800,000 children already lifted out of poverty and our civic society renewing itself, we can meet our anti-poverty goal – to halve child poverty by 2010 and end it by 2020.

First, I announce major reforms today to reward enterprise and entrepreneurship; open up competition in banking; promote new and growing businesses and e-commerce – and balanced growth across all the regions and nations of the United Kingdom.

To remove more of the old barriers to new investment, I have decided on radical reforms of capital gains tax – beyond the tax cuts I set out in the Pre-Budget Report.

When we came into Government capital gains tax was fixed at 40 per cent and we cut the long term rate of capital gains tax for business assets held for ten years or more.

I have now decided to radically cut rates.

I am announcing that from 6th April this year the new capital gains rates for business assets will be cut from 40 per cent to 35 per cent after one year.

To 30 per cent after two years.

To 20 per cent after three years.

And down to 10 per cent after four years.

I will make further tax cuts to remove the barriers that hold small and growing businesses back. Today business investors who own between 5 per cent and 25 per cent of a new and growing business do not benefit from the 10p rate.

I will now cut their rate to 10 per cent for all investments above 5 per cent held for four or more years.

I will make a further radical change – this time for Britain’s unquoted companies. All investments held for four years will benefit from the 10 per cent rate.

With both the lowest corporate tax rates for businesses ever and the lowest ever capital gains tax rates for long term investors, Britain is now the place for companies to start, to invest, to grow and to expand.

I have a decision about one other tax on capital – inheritance tax.

The threshold for inheritance tax is 231,000 pounds.

I will next year raise it to 234,000 pounds. 96 per cent of people will be exempt from inheritance tax.

I have one further cut in capital gains tax to be introduced from 6th April.

So that millions more hard working people have a stake in the businesses whose wealth they create, we will remove the old barriers to a new share owning democracy.

The all employee shareholding scheme which starts on 6th April has one defining requirement: that shareholding should be open to all employees.

I can confirm that the 1.7 million people now in the ‘Save As You Earn’ scheme will continue to enjoy its benefits.

I have also decided that high tech firms recruiting essential personnel will be able to offer share option incentives of 100,000 pounds for up to 15 employees.

And the Financial Secretary will now consult on a technical solution to the tax treatment of share options in unapproved schemes.

I can go further. In future all employee shareholders will secure all the benefits of the 10 per cent capital gains tax rate.

Taken together, our measures are the biggest boost for employee shareholding our country has seen.

The next step on our road to a wealth-owning democracy.

Yesterday in response to the Cruickshank Report, my Rt Hon Friend the Secretary for Trade and I referred small business banking to the Competition Commission.

Mr Cruickshank estimates that competition can reduce banking costs and charges by up to 10 per cent or 3 – 5 billion pounds a year.

The money transmission system affects every cheque, every credit card and every debit transaction and reaches from every local cash dispenser to every corporate inter-bank transfer.

Today I am announcing that we will legislate to ensure the UK payments system is open to new competition.

The international competitiveness of the bond market in the City of London depends upon a level playing field.

That is why today I am announcing the abolition from April 2001 of the withholding tax on the interest paid on international bonds. We will legislate so we can proceed on the basis of exchange of information nationally and internationally. This change should be widely welcomed in all parts of the house. There is no clearer indication of our determination to stand up for what is right for Britain.

Since 1997 the number of small businesses in Britain has risen from 1.2 million to 1.3 million – a 100,000 increase.

Today I continue to remove the old barriers to small business growth.

Having already cut small business corporation tax from 23 per cent to 20 per cent and, for the first 10,000 pounds of their profits, to just 10 per cent, I am today making a further tax reduction. For all small and medium sized businesses the 40 per cent capital allowances – which I introduced in my 1997 Budget – will be made permanent.

This will be of special help to manufacturing companies.

Half manufacturing employment is in small and medium sized firms. So manufacturing will derive further benefit from the 150 million pounds I am allocating to our new research and development tax credit, introduced on 6th April, to finance 30 per cent of their R and D costs.

I want to make Britain the best environment for e commerce and catch up with America as swiftly as possible.

To encourage one million small companies to go on line, I will introduce a special tax reduction. For the next three years any small business buying computers, or investing in e commerce and new information technology, will be able to immediately write off against tax the full 100 per cent of the cost in the year of purchase.

Side by side with this incentive, the small business service will offer consultancy, advice and planning to help small businesses get on line and become e companies, and with the additional resources the Secretary for Employment is providing the University for Industry, which starts this Autumn, will offer small business employees training on the Internet

We are determined to lead in e-commerce and the Internet. Today we are introducing new rules for work permits in areas of highly skilled information technology where there is a global shortage.

And to promote the use of the Internet we will legislate for other tax cuts – a 100 pounds tax cut for electronic filing of tax and VAT returns, and a further 50 pounds tax cut for electronic filing for those paying the working families tax credit.

Tax cuts since 1997 are worth one billion pounds a year for small businesses alone.

After today’s measures, Britain now has the lowest small business corporation taxes we have ever had, the lowest in the industrialised world: since 1997, for small companies an average tax cut of almost 25 per cent.

And to encourage the next generation of entrepreneurs, we are forming a partnership with the CBI, the Institute of Directors and the Chambers of Commerce to encourage enterprise in all communities. Two new enterprise funds will target business loans and management scholarships to high unemployment areas.

Stage by stage we are moving from the Britain where enterprise was a closed circle for the few, to a Britain where enterprise will be open to all.

We must also remove the old barriers of under-investment and neglect that for too long have held our regions back.

Working with the new Regional Development Agencies and the Small Business Service, our aim is balanced economic development across all the regions and nations of the United Kingdom – a modern regional policy supporting local innovation, more investment and improved infrastructure.

To finance a network of regional venture capital investment funds, we are today announcing a partnership with the European Investment Bank and the private sector – with a target of one billion pounds for new economic development for our regions and nations.

The regional targets will be 85 million for the South West, 120 million for the North West, 130 million for the North East and Yorkshire, 250 million for the Midlands and East, 250 million for London and the South East. Scotland, Wales and Northern Ireland will have their own funds.

To further promote a modern regional policy, the Secretary for Industry will be announcing a regional innovation fund to facilitate the formation of local clusters in hi tech industries.

For years Britain, as a whole, has lagged behind America in business access to venture capital investment. Here only half as much is invested per head.

I am grateful to Mr Paul Myners, who has agreed to head a review of institutional investment, to report to me in time for the next Budget.

Our goal for the whole of the United Kingdom is to remove the old barriers to full employment.

We know that greater opportunity for all means greater prosperity for all.

Since 1997 the number of unemployed on benefits has fallen by 30 per cent.

Youth unemployment is down 70 per cent and nearly 200,000 more young people have now found jobs.

Long term youth unemployment, which in the mid-eighties was at 500,000 and even in 1997 was as high as 200,000, is already down to 50,000.

The New Deal demonstrates how false was the old choice between enterprise and fairness, between efficiency and equality. By delivering employment opportunity for all, we are making Britain both more enterprising and more fair, to the benefit not just of the high unemployment areas but the whole country.

And because we have succeeded in this Parliament in removing the old barriers to employing the young, I can announce that starting from April next year we will extend the opportunities and the obligations of the New Deal to the long term adult unemployed – with four options of: work, work-based training, work experience including in the voluntary sector, self-employment. But no fifth option, no staying at home on benefit doing nothing.

The relationship we are forging between rights and responsibilities is firmly rooted in both economic opportunity and individual responsibility.

Instead of being left to draw benefit at a social security office, the unemployed who are able to work will sign up to seek work, with the long term unemployed offered the help of a personal employment adviser.

To ease the transition back to work, the Government will introduce a new job grant for long term unemployed starting at 100 pounds and help with rent or mortgage.

Instead of benefits paying more than work, work will now pay. And I can announce that we will extend the principle of the working families tax credit.

As a first stage, from 1st April, all long term unemployed over 50 who want to return to work will be guaranteed a minimum income for their first year back – for wages up to 15,000 pounds a year, an extra payment of 60 pounds a week.

And building on the forthcoming rise in the national minimum wage, I am today increasing the working families tax credit. It is already being paid to one million families in our country. And with today’s family tax cut, the minimum family income will rise next April – from 200 pounds a week by 7 per cent to 214 pounds a week.

Full employment is not just about the right to work, but, where there are jobs, the responsibility and the requirement to work.

We will implement the Report of Lord Grabiner QC.

Starting in May, a confidential phone line will advise claimants on how to move from the hidden economy and end fraudulent benefit or tax claims; how to get work, register as a business, or become self employed. After six months, from 1 January, for those who fail to respond, tougher rules and penalties will be imposed.

From October, in the 20 highest unemployment areas of Britain covering 127,000 unemployed, local special action teams will be set up to help local unemployed people into nearby vacancies.

The number of lone parents on income support has fallen by almost 100,000 since 1997.

But the employment rate among lone parents in Britain is still only 45 per cent, far below the 70-80 per cent rates of America, France and Scandinavia.

In this Budget we remove old barriers to work and I can today announce an extension of the New Deal in a new way to half a million lone parents.

Piloted from this Autumn, and starting nationally from next April, lone parents with children over five will be invited to work-focussed interviews – and encouraged to take up new choices:

– the choice to train for work with a new cash payment of 15 pounds a week on top of benefits;

– the choice of a few hours work a week, with the first 20 pounds of earnings allowed with no reduction in benefit;

– the choice of part time work with a guaranteed 155 pounds for 16 hours or the choice of full time work on a guaranteed 214 pounds a week;

– and on every rung of this ladder of opportunity, help with back-to-work costs and with child care.

Just as we remove old barriers to lone parents working when their children go to school, so too we will help mothers who want to be at home in the first months of their child’s life.

Today, too many children are born into poverty because the family income drops when the mother stops work. Yet this is the time when many mothers feel they need to be at home with their young child.

The Secretary for Trade is announcing that he will review what improvements can be made in maternity pay and parental leave to improve family friendly employment.

But today I can announce immediate decisions which recognise the extra costs families face when a child is born.

For all low income mothers who meet the basic requirement of health check ups for their young child, we will increase the Sure-Start maternity grant from 200 to 300 pounds. Helping over 200,000 low income mothers.

Mothers on paid maternity leave who would otherwise fall into income support will now stay on working families tax credit.

Families receiving the credit where the mother wants to stay at home will no longer have to wait as long as six months for additional support after a child is born – this will be worth up to 30 pounds a week.

I have examined the alternative put to me of a transferrable tax allowance for husbands and wives when mothers stay at home.

Under this system, a family with two children on 15,000 pounds a year would receive 965 pounds a year. The working families tax credit is far better. With the improvements in it announced today the same couple will receive not 965 pounds a year but 2,200 pounds a year.

The Prime Minister has set a national goal for our country – to abolish child poverty in 20 years, and to halve it by 2010.

A Sure Start for all Britain’s children is not only right but the best anti-crime, the best anti-drugs, the best anti-unemployment and the best anti-dependency policy for this country’s future.

And our strategy starts from the foundation of universal child benefit for all seven million families with children.

When we came to office, child benefit was just 11 pounds five pence for the first child.

Child benefit will be 15 pounds fifty pence from April 2001, 40 per cent more than in 1997.

For young children in the poorest families, weekly support in 1997 was just 28 pounds.

We have raised it in every Budget and today the Secretary for Social Security is announcing a further increase for the poorest children of four pounds 35 pence a week.

So maximum support is up from the 28 pounds of 1997 to up to 50 pounds a week next year.

As a result of all our measures, the poorest two child family on income support will now be 1,500 pounds a year better off than in 1997.

And the low paid family with two children on a wage of 10,000 pounds a year will now be 2,700 pounds a year better off.

This is what we mean by tackling child poverty while making work pay.

I can now report that the numbers of children lifted out of poverty will this year rise beyond one million, and next year reach 1.2 million children – the greatest reduction in child poverty in 50 years, our country now at last fulfilling this generation’s obligations to the next.

And as we move forward to take the second million children out of poverty, I can confirm today that the Secretary for Social Security and I have agreed on the next major reform.

Over the next three years, building on the foundation of universal child benefit, we will create an integrated and seamless system of support for children paid to the mother.

The war against child poverty needs more than finance and more than the efforts of government acting alone.

The war against child poverty can only be won by the combined efforts of private, voluntary, charitable and public sectors working together.

I can confirm that after consultation with charities and voluntary organisations we will proceed to set up, in every region of our country, and with new cash allocated in our spending review, not just one children’s fund but a network of local and regional children’s funds to support work by the voluntary sector in meeting the needs of children.

A strong civic society is built not by rights alone but by rights and responsibilities and by the shared pursuit of the common good – which every year enlists the energies and realises the idealism of more than 22 million British citizens.

It is time for Government to do more to encourage and extend this civic patriotism.

All voluntary organisations and charities will benefit from the tax reforms I am announcing to make it easier to give money and time.

From 6th April this year for every pound any taxpayer gives to charity, the Government will add an extra 28 pence.

And to encourage payroll giving, for every pound contributed through the pay packet, the Government will add up to 50 pence worth of tax relief.

Tax relief will be available not just for cash donations, but for gifts of shares.

To encourage corporate giving, any company can, from 1st April, receive tax relief on the full amount of any donation.

Within prescribed limits, I will go further in exempting ticket sales for charitable fund raising events from VAT, so that the contributions people make will go straight to the charities they support.

Each of these measures will also help those charities and non-governmental organisations who, with the churches, have, for decades, led the crusade to combat Third World poverty and secure debt relief.

With these reforms, this Government matches their commitment because it shares their cause – a virtuous circle of debt reduction, poverty relief and economic development for the poorest countries.

A strong civic society takes seriously its obligations to our elderly:

– to the very poor pensioners whom we must help out of poverty;

– to those just above benefit levels whose lifetime savings should not – as in the past – be a barrier to securing a better retirement income;

– to those who, while better off, are on fixed incomes.

The Secretary for Social Security is to launch a consultation on how, for the next Parliament, we can develop a new pensioners credit – designed not only to lift the poorest out of poverty, but also to do more for those with modest occupational pensions and savings who should not be penalised for having worked hard all their lives and saved for their retirement.

Under the framework on which we will consult, an older pensioner with income, for example, of less than 100 pounds a week, or a couple with less than 150 pounds a week, would qualify for a pension credit to raise their income.

As we consult on this reform, we are making immediate changes.

The pensioners tax allowance will be set this year at 5,790 pounds and for those over 75 at 6,050 pounds.

Nearly 6 million pensioners will not pay any income tax at all.

And with the new 10p rate on savings, 1.5 million pensioners will, for the first time, pay tax at half the rate of the past, at 10p not 20p.

And I have decided to do more today for elderly citizens with modest savings whose very thrift has perversely and unfairly debarred them from receiving the income they need.

For years any pensioner with savings over 3,000 pounds has lost out on income support.

The last Government froze the limit at 3,000 pounds in 1988.

I have decided from next April to double the limit – raising it from 3,000 pounds to 6,000 pounds.

The cut off point for income support was frozen at 8,000 pounds of savings in 1990. We will raise that to 12,000 pounds.

As a result, 500,000 elderly people – previously penalised for their thrift and savings – will be on average 250 pounds a year better off, many better off by 1,000 pounds a year.

Fuel poverty scarred our country for too long. That is why in our first Budget we cut VAT on fuel; why in our second the winter allowance was introduced at 20 pounds and then in our third Budget raised to 100 pounds, available to all 8.5 million households with a resident over 60.

Under this Government the winter allowance will be paid this year and paid every year.

I have considered whether to raise the allowance in line with inflation, which would put it up to 103 pounds, or in line with earnings, which would raise it to 104 pounds fifty.

But I have decided in this Budget not to raise it by 4 or even 5 pounds but to raise it by 50 pounds to 150 pounds.

This winter allowance, at 150 pounds, will now cover up to four winter months of a hard pressed pensioner’s fuel bill.

I can further announce that 600,000 of our elderly will benefit from the new ‘affordable warmth’ programme to install fuel efficient central heating in one million homes throughout Britain.

Beginning on 1st November all pensioners over 75 will receive the free TV licence, worth 104 pounds. And I can announce today that any pensioner over 75 who has an unexpired licence which runs beyond 1st November will also be eligible for a refund for every unexpired month.

Of all the measures to lift our poorest pensioners out of poverty, the minimum income guarantee is the most essential.

We will raise the minimum income guarantee in line with earnings next year.

For a single pensioner it will be worth 82 pounds a week, and for pensioners over the age of 80 it will be 90 pounds a week. For a couple it will be 127 pounds a week and for over-80s, 137 pounds a week.

Taking these measures together – the winter allowance, the TV licence and the higher minimum guarantee – by April next year 1 million pensioners will be, compared with 1997, 20 pounds a week, or 1,000 pounds a year, better off.

As we look to the future, I want all to be able to achieve the security of a wealth-owning democracy, with prosperity reaching the people and places the economy has too long forgotten.

So we want to do more to help people start a bank account and start saving, more to help people invest in their pension, more to help people get on to the first rung of the savings ladder and make provision for their future.

Today in Britain up to 3.5 million adults have no bank account. The Cruickshank Report has revealed that a basic affordable bank account for everyone would be profitable for the banks and that using banking facilities – and not the cash economy – just to pay gas and electricity bills could save families 50 pounds a year, or one pound a week.

I am now inviting the banks to work with the Post Office to offer this basic banking service to all.

And I want working families to be able to move seamlessly from starting an account to starting to save.

I have already announced measures to reward pensioner savings.

This year 6.5 million individual savings accounts have already been started. For the coming year, the ceiling was announced at 5,000 pounds of savings. Instead, for one more year I will keep the ceiling at 7,000 pounds.

I said last November that I would, in future, make an annual Budget decision on real term rises in road fuel duties – the money to go to a new ring-fenced fund for roads and public transport.

Since the Pre-Budget Report world oil prices have risen rapidly from 23 dollars to 30 dollars a barrel.

So, in this Budget I have decided that, beyond the automatic inflation rise of two pence a litre, there will be no real terms increase in road fuel duties.

And to encourage the use of ultra-low sulphur petrol, I will set fuel duty at 1p per litre below other petrol from 1st October.

An extension to the new lower rate vehicle excise duty comes in on 1st March next year. Until that date I have decided – for all cars – to freeze vehicle excise duty.

At present the lower rate – at 55 pounds below the standard rate – is available for 1.5 million cars.

From next year I will extend the reduced rate of vehicle excise duty to cars at 1200 ccs or below.

This will cut vehicle excise duty to 105 pounds for 2.2 million additional cars, the reduced rate will now cover almost 4 million cars.

I am also introducing from 1st March next year, for newly purchased cars, a four band vehicle excise duty rewarding the most environmentally friendly vehicles.

Under the rates I am publishing today, 95 per cent of new cars will pay less than they would under the current system, half of them at least 30 pounds less.

We will also cut the vehicle excise duty for forty thousand 38 tonne and 41 tonne lorries by 500 pounds; the 40 tonne class lorries will have their rate cut by 1,800 pounds; for all other heavy lorries rates will be frozen.

The environmental impact of these tax cuts – taken together with the revenue neutral proposals for company cars – will be a reduction in carbon emissions of one million tonnes by 2010.

This is on top of the 5 million tonnes reduction in carbon emissions by 2010 as a result of the climate change levy which is also revenue neutral and on which the Financial Secretary is publishing further details today.

To further cut pollution we will legislate the aggregates levy, which will again be made revenue neutral through a further 0.1 per cent cut in employers’ national insurance.

These two measures will together cut employers’ national insurance contributions by 1.35 billion pounds.

There is also a strong environmental case for reducing stamp duty for development of brown-field sites, as recommended by the Rogers Report. The Paymaster General will now consult in detail on the measure.

For the property market, in addition to the previously announced withdrawal of mortgage interest tax relief, stamp duty on property sales will be raised for sales above 250,000 to 3 per cent and for sales above 500,000 to 4 per cent. But for properties below 250,000 I propose no change. And I also propose to freeze insurance tax.

Last year I froze duties on all spirits.

This year an inflation rise would push the price of whisky up by 22 pence a bottle.

Because of the competitive position of the industry I will this year continue to freeze duty on all spirits.

Beer will rise only by inflation – by 1 pence a pint- and wine only by inflation, by 4 pence a bottle.

Now that the return-leg exemption for air fares has been found in breach of Single Market law, I am taking the opportunity to introduce a new, fairer and lower air passenger duty – at an overall cost to the Exchequer of 80 million pounds a year. The tax on economy flights within the UK will be the same or lower. For economy flights outside Europe the rate will remain at 20 pounds and there will be a new business class rate of 40 pounds.

30 million economy passengers travelling to Europe will have air passenger duty cut in half – from 10 pounds to 5 pounds. And on flights from the Scottish Highlands and islands I will abolish air passenger duty altogether.

On tobacco, the Paymaster General will tomorrow announce tough new measures to tackle smuggling.

Cigarette taxes will rise by 5 per cent above inflation from tonight – by 25 pence a packet – with every penny of the extra revenue going – as I promised – to funding our hospitals and the National Health Service.

And I am also commissioning a long term assessment of technological, demographic and medical trends over the next two decades that will affect the Health Service, to report to the Treasury in time for the start of the next spending review in 2002.

I have a number of other fiscal decisions to make.

Debt interest payments are down by 4 billion pounds a year. And because we have not spent and we will not spend more at the expense of being prudent, we have also made the tough decisions to tackle benefit fraud, to move people from welfare to work, and to control the social security budget.

Compared to last year’s Budget forecast, social security spending is lower this year by 2 billion pounds and will be another 2 billions lower next year, a saving of 4 billions in all.

Because we have cut borrowing and reformed the welfare state, cutting the costs of social and economic failure, and because we have been financially disciplined, extra resources are now available for our priorities.

And, Mr Deputy Speaker, a Budget is about priorities.

In my Pre-Budget consultations I have read carefully detailed Budget representations and examined proposals from all sides of the House.

I have examined proposals for transferrable tax allowances at 4.25 billion, private health insurance tax reliefs at half a billion and for abolishing capital gains tax at 3.9 billion and top rate tax cuts at 690 million for every 1p. And I have established that, for these last two alone, 75 per cent of the tax cuts would go to the wealthiest five per cent of the population, leaving us nothing extra for public services like the NHS.

And because the proposals are made irrespective of economic circumstances, they would risk a return to boom and bust.

I have decided instead on a prudent and responsible approach that allows us to repay debt and lock in an even greater fiscal tightening, and that allows us even after meeting our fiscal rules, to target tax cuts on hard working families and to release for our public services in the coming year alone additional resources of four billion pounds.

These extra resources are not at the expense of our prudence, they arise because of our prudence.

I can announce an immediate new investment of 280 million pounds in transport, 250 million of it to a ring fenced fund for improving roads and public transport including transport in rural areas. The Deputy Prime Minister will be making a statement on individual allocations for the coming year later this week.

I am able to announce an additional 285 million pounds to be spent from April for fighting crime. Later this week the Home Secretary will announce further details.

And I am also announcing additional investment in UK education starting on 1st April of 1 billion pounds.

Under the Secretary for Education and Employment’s leadership, class sizes for 5 -7 year olds in primary schools are being cut and significant improvements in reading, writing, and maths achieved.

Last year he made a payment to every primary school for books of 2,000 pounds.

Now this year more cash will go directly into the classroom.

To support the Secretary of State’s drive for literacy and numeracy, every one of these 18,000 primary schools will from 1st April receive a new payment of 3,000 pounds for the smallest school and rising to 9,000 for the largest.

The money will go straight to the head teacher.

And schools offering special tuition to help the weakest pupils catch up will be able to draw on an extra 20 million pounds to boost pupil results.

The Secretary of State is proposing to back up reforms in our secondary schools with new measures to boost the performance of those falling behind and to raise the performance of all pupils by the age of 14.

To support these reforms in our secondary schools he will now make a payment to every head teacher for books, equipment and staffing.

Last year he was able to make an extra payment for books and equipment of 2,000 pounds.

This April every one of these 3,500 secondary schools will receive a minimum payment of 30,000 pounds and the largest schools will receive 50,000 pounds.

A total of 300 million in new investment through these measures alone, money paid direct to the school and to the head teacher for use in the classroom.

And to advance our goal of 50 per cent of young people in higher education, the Secretary for Education will also announce that three times as many 16 year olds will, from this Autumn, benefit from education maintenance allowances – worth up to 30 pounds a week and that next month he will launch a national campaign to raise staying on rates.

Further announcements on the full allocation of additional money for education will be made by the Secretary of State on Thursday, and by the Scottish and Welsh Administrations and the Northern Ireland Secretary. I can announce today that for the year from 1st April the real terms rise in the UK education spending will be 8 per cent.

After these new spending decisions, I have a decision to make on income tax. Our prudent approach allows us to repay debt, invest in public services, and cut taxes for hard working families. . I will proceed from 6th April with our one pence cut in the basic rate of income tax from 23 per cent to 22 per cent, the lowest basic tax rate for 70 years.

I am also combining the cut in income tax with a further tax cut – this time for families.

Next April for 5 million families with children, the new children’s tax credit will be increased from 416 pounds to 442 pounds a year. For these families this credit will now be worth twice as much as the old Married Couples Allowance it replaces. And it reduces the family tax bill from April next year by a total of 8.50 pounds a week, on top of the 60p rise in child benefit this April for every mother.

Taken with the 10p income tax rate and the 22p basic rate, and the normal indexation of tax allowances and thresholds, next year’s tax burden for the working family will be the lowest since 1972 – a fall from the 21.5 per cent we inherited to 18.8 per cent.

As I said a Budget is about priorities.

A choice has been posed between investing in a National Health Service financed by public expenditure with access based on need, and privatised health care dependent on private insurance. This Government is committed to a publicly funded National Health Service true to the original principles of its founders.

Securing the long term future of the NHS is one of the great challenges this country must and will meet.

Tomorrow the Prime Minister will make a statement to this House on the work he and the Health Secretary will lead over the next 4 months to reform and modernise the Health Service.

The Government’s plan, to be published in July alongside the detailed public spending allocations, will address long standing variations in efficiency performance and health outcomes, and the right balance between preventative, primary and hospital care.

And now that the overall public spending total is set for the years until 2004, I have decided that I can back long term reform with long term resources for the Health Service by today announcing the NHS allocation not just for one year but for the next four years.

Since its creation, National Health Service spending has risen by an average 3.3 per cent a year above inflation.

Under the last Government it rose by 2.9 per cent.

We have decided that in the years from now until 2004 the NHS will grow by twice as much – by 6.1 per cent a year over and above inflation, by far the largest sustained increase in NHS funding of any period in the 50 year history of the Health Service.

Last year the equivalent of just over 1,850 pounds per household was spent on the NHS.

By 2004 more than 2800 pounds per household will be spent on the NHS.

Half as much money again for health care for every family in our country.

In the UK there has been an increase of 4,000 in the number of nurses working in the Health Service. That was just a start. With today’s extra resources, and the reforms still to come, we can plan to recruit and train up to 10,000 more nurses.

Let me emphasise that more resources must mean more reform and modernisation .

The Prime Minister, in his statement to the House tomorrow, will set out how with the guarantee of sustained investment, the Government, the professions and the NHS can together rise to the challenge of delivering better health care for all.

I can make one further announcement.

In 10 days time at the beginning of the new financial year the NHS was scheduled to have a 2.9 billions addition on last year.

I have decided to raise that figure with immediate effect by allocating not only the 300 million in tobacco revenues I promised last Autumn, but by adding to that to achieve in total an extra 2 billion pounds – making a rise next year of 4.9 billion pounds – extra money the NHS can start using from 1st April.

So health spending will rise from last year’s 45.1 billion, and this year’s 49.3 billion to next year: 54.2 billions; the year after 58.6 billion; then 63.5 billion; and then from April 2003, 68.7 billion pounds – over these five years a cash increase of over 50 per cent, a real terms increase of 35 per cent.

New money we can provide because we have made our choice: a Budget that unites the whole country, a Budget for all the people.

We have been prudent for a purpose: a stronger fairer Britain. And I commend this Budget to the House.

Gordon Brown – 1998 Speech on the Comprehensive Spending Review


Below is the text of the speech made by Gordon Brown, the then Chancellor of the Exchequer, in the House of Commons on 14th July 1998.

Madam Speaker, with permission.

This Government’s central objectives are high and stable levels of growth and employment, and sustainable public services, built from a platform of long term stability.

And to achieve this, two fundamental economic reforms have been undertaken for the long term – to take monetary policy out of party politics through operational independence for the Bank of England, and to impose a new framework of financial discipline, through fiscal rules that achieve a current budget balance and prudent levels of debt to national income.

Last May we imposed a two year spending limit and we have kept to this limit. We promised to cut public borrowing, and it has been cut by 20 billion. A fiscal tightening that will be locked-in into next year.

And to meet our fiscal rules and in line with cautious and published assumptions audited by the Independent National Audit Office, we plan current surpluses for the next three years of 7 billion, 10 billion and 13 billion. And as a proportion of national income, debt will fall below 40 per cent.

By the end of this parliament debt interest payments will be 5 billion a year lower than if we had simply left borrowing at the level inherited from the last government.

In the last economic cycle, under the previous Government, the current budget deficit averaged at 1 1/2 per cent of national income, the equivalent of 12 billion of extra borrowing every year. And during the 1990s national debt doubled.

Over this economic cycle and for the first time for decades, Britain is set to have both a current budget in balance and a sustainable approach to debt. An approach that is among the most prudent of our G7 partners, and more prudent than our predecessors.

All the allocations we make this afternoon are made within and subject to this overall financial discipline, as I set out in the Economic and Fiscal Strategy Report published last month. And through our New Deal for the unemployed, we are tackling the bills of economic failure and under the plans published today the growth in social security spending for this Parliament will be significantly lower than in the last Parliament.

Working within this framework, the Comprehensive Spending Review has examined the most effective use of public money across and within each department and I am grateful to the Chief Secretary and to the Public Spending Committee of Cabinet for their work.

By looking not just as what Government spends but at what Government does, the Review has identified the modernisation and savings that are essential. The first innovation of the Comprehensive Spending Review is to move from the short-termism of the annual cycle and to draw up public expenditure plans not on a one year basis but on a three year basis.

And the Review ‘s second conclusion is that all new resources should be conditional on the implementation of essential reforms, money but only in return for modernisation: Government moving out of areas where it need not be, and – in those areas where public service matters – Government setting clear targets for modern, efficient and effective services.

So today we begin not, as all spending announcements for the last 30 years have traditionally done, with annual allocations, but by setting out:

– the new three year objectives and targets for each service and therefore the results we are demanding;

– the new standards of efficiency which will have to be met to ensure every penny is spent well;

– the procedures for scrutiny and audit that will now be set in place;

– and the reforms we have agreed.

And all based on a clear and modern understanding that Government should only do what it has to do, but do what it does to the highest standard.

So let me set out the essential changes.

First, each department has reached a public service agreement with the Treasury, effectively a contract with the Treasury for the renewal of public services. It is a contract that in each service area requires reform in return for investment.

So the new contract sets down the new departmental objectives and targets that have to be met, the stages by which they will be met, how departments intend to allocate resources to achieve these targets and the process that will monitor results.

The Prime Minister has decided that this continuous scrutiny and audit will be overseen by a Cabinet Committee, continuing the work of the existing Public Spending Committee, and money will be released only if departments keep to their plans.

Second, the contract will stipulate new 3 year efficiency targets for the delivery of services – targets that range between 3 per cent and 10 per cent. The terms of these will be made public.

The purpose of these efficiency targets is to ensure more resources go direct to front line services – to patient care in the NHS, to classroom teaching, to fighting crime – a policy of promoting front-line services, so that by securing greater value for money, we secure more money for what we value.

Third, in addition to efficiency targets we have embarked upon a programme of radical reforms.

To achieve our priorities, difficult decisions and choices have had to be made.

We have already reformed student finance and begun welfare reform – matching rights with responsibilities.

And as a result of the Comprehensive Review, further reforms will be announced in legal aid, procedures for asylum, in child benefit, youth justice and with the withdrawal of unjustified subsidies. And in Defence and the Foreign Office, we have achieved the changes necessary to provide us with the defence and diplomatic capability we need while making the savings necessary – for example in the number of warships, and with a new public/private partnership for the Defence Evaluation and Research Agency.

Fourth, for central and local government we have now agreed a programme for releasing assets we do not need to fund 11 billion of additional new investment in health, education, housing, transport and other capital projects that we urgently do need. And with a number of further announcements today our policy of promoting public private partnerships is extended into new areas, including national science policy, urban policy and overseas development.

Fifth, while we are raising capital investment for a fixed period of three years in order to tackle a backlog of under-investment, current spending will grow by no more than 2 1/4 per cent. And we must ensure that public sector pay settlements are fair and affordable and do not put at risk our targets for public service improvement in each of the next three years for which we have budgeted.

So in line with the 3 years allocations, the independent review bodies will now report not just to the Prime Minister but to the departmental Ministers who have to meet these public service improvement targets and who will now respond to the recommendations.

And consistent with three year allocations, we are announcing a further strengthening of the pay review system. Having spoken to the chairmen, the Prime Minister has confirmed that their remits – in addition to their responsibility to recruit, reward and motivate staff – and therefore their role will be strengthened with three responsibilities:

– their recommendations will take account of affordability: in other words the current departmental spending limits;

– they will take account of the Government’s inflation target of 2 1/2 per cent;

– and they will take account of the need to achieve the Government’s targets for output and efficiency.

This reform offers the opportunity for public services to manage their pay and conditions more directly but also gives departments a responsibility to ensure that pay settlements cannot be determined without regard to the demands of the service. In this way – as in every other organisation – pay decisions will now be made in relation to the overall objectives of the service.

But perhaps the most important advantage of conducting a comprehensive spending review is the opportunity it allows for individual Secretaries of State to put in place a substantial reallocation of resources within their departments – from bureaucracy to front-line services, from dealing with the symptoms of problems to dealing with causes – and to consider a co-ordinated approach that breaks free from old departmental fragmentations and duplication.

As a result of interdepartmental reviews, services for asylum seekers will now be managed by one department rather than five; the three departments responsible for criminal justice will work together to one set of objectives; children’s services and the urban regeneration budgets and our approach to tackling fraud will be reorganised, achieving both efficiencies and savings.

Our prudence has been for a purpose. It is because we have set tough efficiency targets, and reordered departmental budgets that our top priorities, health and education, will receive more new money than the other 19 Government departments combined. To accommodate this we have had to take a firm line with other spending programmes, and rigorously select priorities.

As a result more than half today’s allocations – over 50 per cent – will be invested in health and education. So there will be additional resources – but it is money in return for modernisation.

Now the allocations to individual services.

Here the main conclusion of the Comprehensive Spending Review is that it is not just a social duty for government to invest in good public services, to improve our social fabric, and to tackle poverty and deprivation by extending opportunity. Most people in Britain, apart from a small and extreme minority, also agree that it is in the economic interests of the whole country to create an infrastructure of opportunity, and invest in education, science, transport and strong communities so that individuals can contribute to the economic and social well-being of the country.

I turn to education.

Invest in the education of our children and we are investing in our future.

In the old economy it was possible to survive with an education system that advanced only the ambitions of the few. The new economy demands an education system that advances the ambitions of all.

But investment will take place only in exchange for further modernisation and reform.

The Education Secretary has agreed not just to set numeracy and literacy targets for 11 year olds but to set Government targets for nursery education, for cutting truancy, for higher attainment by teenagers, for improved standards of teaching including a qualification for head teachers, for greater efficiency in further and higher education and for the inspection of schools. In return for investment there will also be further reforms in teacher training and in the administration of school budgets.

At every stage we are linking investment to reform and it is on this basis that the Education Secretary tomorrow will announce the biggest single investment in education in the history of our country. In this and in other services there will be separate announcements based on the Barnett formula for Scotland, Wales and Northern Ireland.

In the last three years of the previous Government growth in education spending was 7 billion.

For the next three years, I can announce additional education spending of 19 billion.

In total we will spend 3 billion more next year, 6 billion more in 2000, 10 billion more in 2001.

That is what we mean by education, education, education. Honouring our commitment to the British people.

In eighteen years of the last Government, spending on education rose on average by 1.4 per cent a year.

Education spending will now rise in real terms by an average of 5.1 per cent a year till the end of the Parliament.

We said we would devote a rising share of national income to education – and we have.

Spending on education will now rise to 5 per cent of national income.

Today around a million children are still being taught in classrooms built before 1914. 6,000 schools are already being refurbished. On top of this, over the Parliament capital investment to re-equip our schools will double.

And after our reforms in student finance, there will now be an expansion in the number of students in higher and further education – by the end of this Parliament more than 500,000 additional students.

We said we would meet our pledge on school class sizes for 5, 6, and 7 year olds. Under the proposals the Education Secretary will announce tomorrow our pledge will be met – as we promised.

Investing in education is essential to secure both a fairer society and an efficient economy. And if our country is to be prepared and equipped for the competitive challenges ahead the Government also has an economic responsibility to invest in science and innovation; in the transport infrastructure, and in building safer and stronger communities.

Net public investment will be doubled as a result of the Government’s new Investing in Britain Fund, but in every area investment is conditional on reform.

It is the development and application of ideas and inventions in science that hold the key to improved national competitiveness.

As a result of a reduction in subsidies that can no longer be justified and as a result of 400 million in support from the Wellcome Foundation, whom I thank, the Government is able to announce the biggest ever Government-led public/private partnership for science. A total of 1.1 billion will now be available to provide modern facilities for science research at our universities and support science teaching and research throughout the country. This innovative step-change in our approach to science will lay the foundations for putting Britain at the forefront of the next generation of scientific and industrial research.

Anyone who travels on our roads and railways knows that after years of neglect and under-investment Britain suffers from an overcrowded, under-financed, under-planned and under-maintained transport system.

So for transport we propose a new investment strategy involving new public private partnerships – like those for the Underground and Channel Tunnel rail link – and a commitment to integrated planning. In return for these innovations there will be 2 billion more investment. From a 25 per cent decline in transport investment in the last Parliament, there will be a 25 per cent increase in the next three years – for investment in public transport and meeting our environmental objectives. Full details will be set out by the Deputy Prime Minister in his Transport White Paper.

Economic success and social cohesion both depend on safer and stronger communities. That is why we will now invest more in crime prevention. And that is why today also we propose policy reforms to tackle the underlying causes of poverty.

It is because we are announcing major modernisations that put legal aid on a fairer footing and reform youth justice, that more resources will be made available for policing and for the first time substantial resources for innovative evidence-based crime prevention work. Measures to tackle drug abuse will have a new priority, with a 25 per cent increase in funding. All details, including the new targets that will be met, will be given by the Home Secretary.

To build stronger communities we need also to renew our housing stock. To cut out waste and ensure best use of resources, the Deputy Prime Minister will impose new guidelines for greater efficiency in construction and repair. And a new Housing Inspectorate will audit housing management in every local authority.

With the help of these reforms we will be able not just to tackle homelessness but to renovate 1.5 million homes and to do so we will allocate, from capital receipts, 3.6 billion. Our commitment to the environment recognises the need for responsibility in the use of energy means there will be a new programme for home energy efficiency.

We are committed to a comprehensive programme of welfare reform.

Since coming into office we have introduced the New Deal, the reform in student finance, the working families tax credit and a new approach to child benefit. The Prime Minister has set up a Welfare Review which led to the Welfare Green Paper and a long term framework for the provision for future pensions and for the reform of disability benefits will be announced later this year.

Last week we announced reforms in the Child Support Agency, and yesterday new measures to combat social security fraud.

Today I announce further changes in welfare policy.

The New Deal for the unemployed is based on opportunities matched by responsibilities. It is now time to extend this approach to communities by tackling the underlying causes of poverty. For our most deprived estates, the key problems are not just poor housing but lack of employment and economic opportunity. In exchange for long term targets for improving business start-ups, skills and educational qualifications, a total of 800 million will be allocated to the New Deal for Communities. And a New Deal helping the young unemployed to become self-employed will be launched on Friday.

A further reform will make it possible for thousands more young people to stay on in school and go on to further and higher education. To raise Britain’s appallingly low staying-on rates, a new educational maintenance allowance, linked to attendance and based on parental income, will be piloted for 16 to 18 year olds.

If, as we expect, the new educational maintenance allowance succeeds in encouraging young people to stay on in education, we plan to introduce it nationally, using the money currently spent on child benefit post-16.

As the interdepartmental review of children’s services has uncovered, we spend 10 billion on young children but do so in an uncoordinated and piecemeal way with thousands of the youngest children, those under 3, missing out.

Plans for a Sure-Start programme will be announced later this month , to bring together quality services for the under-3s and their parents – nursery, child-care and playgroup provision, and post-natal and other health services. One new feature will be to extend to parents the offer of counselling and help for them to prepare their children for learning and school.

This is a significant step in the development of a family policy for our country, supporting family life and encouraging stable families, and building on our national childcare strategy. The Home Secretary’s group will bring forward further recommendations on family policy.

At the heart of our review has been a determination that we fulfil our duty to the oldest members of our society.

First, pensioners will benefit most from a better health service. And it has always been wrong that charges are levied on pensioners for the eye sight tests that they regularly need to preserve sight and protect against disease. So for pensioners, from next April, eye test charges will be abolished.

Second, the elderly who rely heavily on public transport need a fairer deal to enable them to be more mobile. In his Transport White Paper the Deputy Prime Minister will announce plans for nationwide help with transport for the elderly.

Third, the elderly fear their winter fuel bills. As a result of the cut in VAT, our winter fuel payment and other changes, average pensioner fuel bills are up to 100 lower this year. Later this week the Social Security Secretary will announce our further plans for help with fuel bills for the rest of the Parliament.

And she will also announce further financial proposals to help pensioners who need it. Here also we are prepared to make reforms that will help alleviate poverty. From next April every pensioner and pensioner couple will have a minimum income guarantee.

And we will also set a minimum tax guarantee: that no pensioner will pay income tax unless their income rises above a specified level. The Government will also announce measures to ensure that more people receive the income that they are due. As a result of our proposals, thousands of pensioners will be relieved from poverty. A total of 2.5 billion will be set aside for this programme.

Further reforms in other services have made possible new investments that improve the quality of our community life. As a result of cutting wasteful bureaucracy and quangos and a new targeting of resources on priorities, 290 million extra will be invested in museums, the arts and sport over the next three years, a real increase of 5 1/2per cent, making possible improved access to museums and galleries.

And as a result of asset sales in areas where spending is no longer needed, the Foreign Office budget will not only ensure more resources for the proper representation and promotion of Britain abroad, but also the Foreign Secretary is announcing today that our support for the BBC World Service will be raised by a total of 44 million over the next three years.

For twenty years overseas aid has been falling as a proportion of national income.

Under this Government it will rise.

As a result of a decision to sell a majority stake in the Commonwealth Development Corporation, and of a new decision to target overseas development assistance on health, education and anti-poverty programmes, the Secretary of State for International Development will announce today that Britain will, during this Parliament, increase overseas aid from the low of 0.25 per cent of national income – the budget figure we inherited last year – to 0.30 per cent of national income.

Britain will enter the millennium at the forefront in pressing for debt reduction for the poorest countries. And aid which was falling by 2 per cent a year under the last Government will rise in each of the next three years.

The National Health Service is compassion in action, what its founder, Aneurin Bevan, rightly called the most civilised achievement of modern Government.

The final conclusion of the Comprehensive Spending Review is that it is fair and efficient to provide the best health service we can on the basis of need, not the ability to pay, and that under this Government health services will never be left to the hazards of private or charitable provision.

Yet half the beds in NHS hospitals are in accommodation built before the First World War. And three quarters of ward blocks are hand-me-downs from the days of charity, voluntary and municipal and emergency wartime hospitals. Investment in the NHS is long overdue. And we will recognise the care, the responsibility and the dedication of doctors, nurses and all staff to the patients of the NHS.

My Right Hon Friend the Secretary of State for Health will announce on Thursday in this House targets that tackle inefficiencies in hospitals and cost overruns, that simplify management structures and give a new emphasis to long term planning.

On quality all hospitals will be required to publish league tables measuring the success rates of their treatments. Over the lifetime of this Parliament over 1 billion will be saved from red tape and put into patient care, in part by scrapping the costly and time-consuming annual round of contracts.

So on the fiftieth anniversary of the NHS this Government will now make the biggest ever investment in its future, giving the NHS for the first time for decades the long term resources it needs.

Under the last Government the increase for the last three years was 7 billion.

For the coming three years, I am announcing an increase in health service funding of a total of 21 billion.

Health department spending rose by an average of 2.5 per cent a year during the last Parliament. Next year it will rise by 5.7 per cent. The year after by 4.5 per cent.

For the rest of the Parliament this Government will achieve yearly real growth averaging 4.7 per cent.

We will meet our waiting list pledge as promised.

And every hospital will benefit from the 50 per cent increase in investment in equipment and buildings and the 5 billion fund for NHS modernisation – the largest hospital building and modernisation programme this country has seen.

As we start its next fifty years the National Health Service is safe in this Government’s hands.

This Government has made the choices necessary to deliver stable and sustainable public finances. We have been steadfast in our priorities – the nation’s priorities.

And now, as a result of prudence and a commitment to an investment in return for reform, a total of 40 billion pounds will be invested in the nation’s priorities – health and education.

A Government whose prudence allows us to build modern public services and to renew Britain.

A Government keeping our promises to the people of Britain.

A Government step by step making Britain better.

And I commend this statement to the house.