Tag: 2001

The speech made by Gordon Brown, the then Chancellor of the Exchequer, in Nottingham on 9 February 2001.

Introduction

It is a pleasure to be here in Nottingham this morning and I am particularly pleased to be here in the Nottingham Business Centre opened fifteen years ago by John Smith, created out of what was once the headquarters of Raleigh and now a thriving centre for new businesses – a regeneration that maintains and now extends the spirit of enterprise for which this city and region is rightly famous round the world and I am delighted too to have the opportunity to visit the East Midlands, a region where in the last four years 40,000 more people have found jobs, where because of the efforts of employers in this region youth unemployment has fallen by 20 per cent and long term unemployment has fallen by 70 per cent.

And I think it important to record that vacancies – at up to 60 thousand – are at a record level, today over 50 per cent higher than what they were even at the peak of the boom in the late eighties.

Inner City 100 Initiative

It is fitting that here I am able to launch this morning the nominations for the Inner City 100. This exciting and unique initiative is an important part of our drive to open up enterprise to all through celebrating and show-casing the top 100 business successes in our most challenged inner cities – including here in Nottingham and in Leicester.

IC 100 will show that even the most disadvantaged inner cities are not the enterprise “no-go” areas of the past, but the investment opportunities of the future. It will start to change the way that we see these areas and the way these areas see themselves.

Inner City 100 brings together a powerful partnership from across Britain, including the Regional Development Agencies, the Small Business Service, the Royal Bank of Scotland, the New Economics Foundation and Financial Times which will publish the final top 100 list in the autumn.

And I am grateful to all those involved and hope that business leaders and local representatives across the country will give their support.

I look forward to hearing about the first nominations in a few minutes.

I would like to thank you all for coming to this gathering of businessmen and women, academics, representatives from the Regional Development Agency together with respected Members of Parliament – great advocates in Whitehall for the needs of this area – at the start of our pre-Budget consultation roadshows.

And let me say this pre-Budget consultation, one of many to come in the next few days and weeks, is a vital part of the modern Budget process.

A few years ago the Budget process was shrouded in total mystery. By the time the Budget emerged from the red box on Budget day, Treasury ministers had spent many weeks in what was called “Budget purdah” – making no speeches, no appearances to listen or discuss the economy and insulated from public views and public scrutiny. A Budget untouched by consultation.

And sometimes the results showed.

But I believe a modern economy requires a modern Budget process. If we are to face the challenges of the global economy we must face them together – Government, business, local communities – in an open and consultative process – discussing ideas, listening to views, seeing at first hand what is needed, where the gaps in economic policy are and discussing with those who know best, those who created the best, how best they can be filled.

And there is a special reason today for a more strenuous pre-Budget consultation. As I said in my Pre-Budget Report statement, our hard-won and newly won stability now offers Britain a unique opportunity we can either seize or squander – the opportunity to build from that platform of monetary and fiscal stability, low interest rates and financial discipline, the high and sustained levels of productivity growth that are essential to long term prosperity. And so today I want to talk today about the drivers of economic growth – skills, innovation, it investment, the enterprise culture itself – and how a modern regional economic policy based on local people making local decisions about local needs can further that.

If we look back on our history there have been three generations of regional economic policy:

The first generation of regional and urban policies – starting in the thirties – amounted essentially to ambulance work – first aid measures, urgently needed assistance and relief in areas of high unemployment.

The second generation of regional policies came in the sixties when then the emphasis was on large capital grants and tax incentives for regions anxious to encourage mobile capital into our regions as inward investment.

And now we are entering a third generation of regional policies, where we concentrate on indigenous measures – strengthening, within the regions, the essential building blocks of self generating growth. And on tackling the imbalances that prevent economic strength:

First, bridging the investment and enterprise gap;
Second, bridging the skills gap;
Third, bridging the technology gap, including support for e-commerce;
Fourth, bridging the employment gap.

Start-Up Rates

Let me give one example.

All around us here in the Nottingham Business Centre we see examples of successful entrepreneurs. But that is not the case everywhere.

Over the last two decades, small business creation rates have varied between regions in a dramatic way.

Start up rates in 1999 ranged from 21 new VAT registrations per 10,000 citizens in the North East to 66 per 10,000 citizens in London. And the rate in the East Midlands was 34 per 10,000 citizens, around half the London rate, below the UK average.

These figures show not only a gap in performance which we must explain but also the potential for each region, not just for business creation but for additional jobs.

If the level of business in every region was the same as the national average there would be 135,000 more businesses registered for VAT across the UK. And as Treasury analysis shows that every extra VAT registration creates on average 3.7 new jobs this would mean around half a million additional jobs in some of the poorest areas of the country.

So we have a long way to go. So the Budget focus on measures to encourage enterprise and entrepreneurship, especially in high unemployment areas and regions of the country, will include consulting on new tax incentives for business development and spurring the enterprise culture.

Research shows that the recession of the early nineties not only destroyed existing businesses but discouraged new businesses – the number of small businesses starting and growing fell by a third and the crisis of confidence continued through most of the nineties.

If we are to achieve higher start-up rates, economic stability is critically important and we need to build from a platform of stability and steady growth. That is why when we came into power we made the Bank of England independent, ensuring that interest rate decisions are taken in the best long-term interests of the economy, not for short-term political considerations.

Inflation is now at historically low levels, long term interest rates are around their lowest for thirty five years and business investment has risen.

Yesterday’s interest rate cut is possible because we have the lowest inflation rate for 30 years and because, in recent years, despite the rise in oil prices we have, with monetary and fiscal discipline, managed to keep inflation under control.

So, through our macroeconomic policies, we are building the best foundation for stability and balanced economic growth throughout Britain.

But stability is a necessary but not sufficient condition of business success. Now that we have greater stability, the next stage is to build through measures that improve investment, innovation, it and infrastructure and skills a stronger enterprise culture. Investment

Because we believe investment in enterprise is the key to success in the new economy, we have cut small companies tax from 23p to 20p, introduced a starting rate of small business tax at 10 pence in the pound, cut mainstream Corporation Tax from 33p to 30p to its lowest ever level, cut Capital Gains Tax to 10p for long term investments and introduced accelerated tax allowances at 40 per cent for small and medium sized businesses and at 100 per cent for it that are of special help to manufacturing.

As we prepare an enterprise Budget we will consider extending Capital Gains Tax relief and the 10p rate, and consult on new reliefs for corporation tax including for intellectual property. And as we move to an enterprise Budget we will consult on Capital Gains Tax relief for the sale of substantial shareholdings, and improvements in our Enterprise Management Incentive scheme, the share options we offer new and dynamic companies.

And to further encourage investment in the regions, where business investment has been rising but not evenly and because one of the gaps is in the venture capital market in regions especially for risk ventures, we are proposing a regional venture capital fund, which will provide early stage venture capital for this region’s growing businesses, the world leaders of tomorrow – providing an estimated £120 million over the next 3 to 5 years. Innovation

The second driver of growth is innovation, which is now, more than ever, the key to higher productivity. It is said that two thirds of new growth comes from innovation and it is our aim to ensure that British inventions are developed in Britain and manufactured in Britain, creating growth and jobs in Britain.

The seedbed is basic science. So we are increasing spending on science by 5.4 per cent a year, including our one billion pound public private partnership with Wellcome to modernise science infrastructure; and to transform British inventions into British-made products, we announced a £60 million pounds University Challenge Fund.

And to encourage an entrepreneurial culture in our universities and technology transfer from the science lab to the marketplace, we are setting up new Enterprise Centres – world class centres, both for fostering commercialisation of research and new ideas and for incorporating teaching of enterprise in science and engineering curricula. And I am pleased that Nottingham is one of the universities that has taken up this science enterprise challenge through the new Institute of Enterprise and Innovation.

And through our higher education reach out funding we encouraging universities to forge links with local communities and to respond to the needs of business. And again universities here in the East Midlands have bid successfully for money from this fund – over one and a half million pounds for Nottingham university and 1.1 million for Loughborough University which I will be visiting later this morning.

And to offer the best incentives for company research, we are consulting on an extension of our new research and development tax credit. Today it underwrites nearly a quarter of small business r&d costs even before a penny in profit is made. Some have suggested we extend this to larger companies and we are interested to hear your views.

Skills

The third driver of growth grows in importance every day: the skills of the people. And in each region we need nothing short of the long overdue revolution in education, skills and training. I thank companies for their support for the New Deal which has given a new start to 50 thousand young people in the region, 25 thousand of whom have moved into work. And here in Nottingham alone 6,000 of the long-term unemployed have participated in the New Deal.

But because we recognise there are special labour market needs in individual towns and cities where we must match the skills employers need to the training of those who need skills we are developing through the Regional Development Agencies and other local and regional bodies, local employment plans – and looking at how to meet future skills and employment needs.

There is also a local action team for jobs in Nottingham operated by Working Links and alliance between the Employment Service, Cap Gemini Ernst and you and Manpower plc, working in partnership with the city council to help people into work.

But our economic future is born in the schools and universities and not only are we increasing spending on education by over five per cent a year in real terms over the next three years but we are investing in your world class universities here in the East Midlands.

We want to make the most of all our nations potential and talent, investing not only in some of the potential of some of our young people, but investing to make the most of all of the potential of all of our young people.

Here in the East Midlands the percentage of sixteen year olds in the East Midlands achieving five GCSEs at grade A-C is just 45 per cent, below the national average and the national target of fifty per cent by 2002. We must do more, so David Blunkett has set up 6 Education Action Zones in the region, partnerships between groups of schools, businesses, parents, and local education authorities. And the New Deal for schools has already helped 1,400 schools in the region. And over the next three years, schools in the East Midlands will receive around 250 million through the New Deal.

And as we start the new millennium, we must equip all our companies and all our people for the newest and most decisive economic challenge of the 21st century – mastering information technologies, from the pc to the internet, from e-mail to e-commerce.

Under our National Grid for Learning Standards Fund, Nottingham was allocated a million pounds this year to invest in information technology and next year spending will be £1.3 million.

The proportion of businesses in the East Midlands region that either have a website or frequently use e-mail has increased significantly from 54 per cent in 1999 to 76 per cent last year.

But further progress needs to be made Only 24 per cent of businesses are trading online. And in terms of increased access to the internet at home the region still lags behind with only 23 per cent of homes connected.

So the region will benefit from our £1.7 billion plan for a computer learning centre in every community, 1,000 in all throughout Britain. And they will be in schools, colleges, libraries, in internet cafes and on the high street.

In the first phase, 19 centres will be located in the region and run by numerous providers, including local community groups. And two of these are already open here in Nottingham.

Our targets for the new economy are ambitious. Within three years, thousands more small businesses able to benefit from e-commerce. A whole new network of computer learning with one purpose only, that the whole region is equipped for the information age.

Infrastructure And Transport

The fourth driver of regional growth where we need to do more is improvements in infrastructure – tackling a long term under-investment by doubling transport investment immediately and then through a unique private public partnership investing £180 billion pounds over 10 years to improve motorways trunk roads, and rail services.

The Private Finance Initiative is also helping to modernise public services in the East Midlands with over £76 million worth of PFI investment in the region – including a project worth £20 million at the Queen’s Medical Centre here in Nottingham – since 1997 and over 450 million more in procurement.

Enterprise Culture

Finally, let me turn to the other great driver of growth- the enterprise culture. Survey evidence published by the London Business School yesterday shows that while 1 in 10 people in the US are trying to start a new business, only 1 in 33 are in the UK. The gap in activity is particularly noticeable among women – currently under-represented in both self employment and business start-ups, particularly in comparison with the US: less than a third of those registered as self-employed in the UK are women and only 35 per cent of new enterprises are run by women. And again there is variation by region – in some areas fewer than 20 per cent of those who are self-employed people are female. Here in the East Midlands the figure is 29 per cent.

Last year’s global entrepreneurship monitor found that UK start-ups would rise by fifty per cent if the start-up rate amongst women matched that of men.

So that is why we must act to encourage more women to start and to grow their own businesses.

Already there are innovative projects in place that we can build on and learn from-

In Glasgow, the Wellpark Enterprise Centre, providing information, advice and business support to women either in business or wanting to go into business, as well as a resource centre and on-site nursery.

In Norwich, the Women’s Employment, Enterprise and Training Unit – offering a range of services to keep women informed and to enable them to improve their prospects of finding employment including enterprise courses and access to loan funds.

And WIN – Women In the Network, active in Scotland and the North East providing support, including on-line support for women starting and developing their own businesses.

Among our measures to promote entrepreneurship amongst women is the £96 million pound Phoenix Fund which has already allocated a substantial amount of money to a number of projects aimed at helping women start up businesses, and we will build on this in the spring when the Small Business Service will be launching a new women’s online business centre.

And let me turn specially to the challenge faced in some of our high unemployment areas where business creation has often run at one sixth of the wealthier cites and towns.

In high unemployment areas economic prosperity will not come from a return to the old ways which have failed: neither an old style benefits approach which has ignored the causes of poverty and unemployment – and not invested in education, training, jobs and business development. Nor a bricks and mortar only approach which, with enterprise zones, targeted subsidies for property development at the expense of help for enterprising local people.

To tackle the causes of unemployment and low economic activity, we need a radical new approach encouraging business development and an enterprise culture and I am pleased that with us today is Sir Ronald Cohen whose Social Investment Taskforce report on stimulating enterprise and investment in disadvantaged communities is the subject of my pre-Budget consultation.

Instead of acquiescing in the old giro culture – simply paying benefits to compensate people for their social exclusion – we must back success rather than accept failure. And to do that we must extend fiscal and other financial incentives that open up economic and business opportunity in high unemployment areas, and encourage and reward new enterprise.

Indeed, our old cities and estates should be seen as new markets with competitive advantages – their strategic locations, their often untapped retail markets, and the potential of their workforce.

And so it is right to put in place the best possible incentive structure to stimulate business-led growth as well as much bigger flows of private investment.

To spur economic activity, we are proposing a number of new incentives.

First to secure development, we are proposing stamp duty exemption for all properties in our most disadvantaged communities;

Accelerated tax relief for cleaning up contaminated land;
Vat cuts to reduce the costs of residential property conversions;
Tax relief to bring empty flats over shops back into use.
And we said we would consult on:

A further business rate relief for small business in assisted areas;
And to secure new business development particularly by reducing the cost of raising money . We are discussing with the banks and considering a new and generous tax credit for community investment;
And the creation of the first community development venture fund.
And we are going beyond this: not just micro-finance for enterprises who cannot access mainstream sources of finance but advice and a national network of mentors to give entrepreneurs all the help and encouragement they need.

Anyone anywhere who seriously wants to start a business will be able to get a free package of advice, information and access to mentoring through the Small Business Service, worth up to £500.

And in the high unemployment areas of the country, we will support intensive programmes of pre-start training, advice and mentoring, with new incubator units in every region. A package worth up to £2000 for every start-up.

The Regional Development Agencies and the local authorities can also make a vital contribution to fostering an entrepreneurial culture. And I pay tribute today to the work of Derek Mapp, an entrepreneur himself and the Chair of the East Midlands Regional Development Agency.

As we enter this new generation of regional policies strengthening, within the regions the essential building blocks of self-generating growth, the capacity to innovate, invest, build skills, match the unemployed to jobs available, we are offering development agencies new flexibilities, but in return we are demanding strenuous targets be met in skills, innovation, business creation, new technology and employment. This is the new regional policy – locally sensitive and locally delivered, local people meeting local needs through local agencies.

But changing our culture to one that favours enterprise in every area needs not just incentives but a real shift in attitudes too. And that will come about quickest if it starts, not in the boardroom, but in our schools.

I know how many schools and businesses in this region are making headway in advancing the enterprise culture but I want every young person to hear about business and enterprise in school; every college student to be made aware of the opportunities in business; every teacher to be able to communicate the virtues and potential of business and enterprise. And I want businessmen and women to visit our schools and talk to their enterprise classes; I want every student to have a quality experience of working in a local business before they leave school. I want management training scholarships to be available even in the poorest areas and I want every community to see business leaders as role models.

Conclusion

So the 2001 Budget – and our future plans – will continue this Government’s policies to offer greater incentives to business, remove unacceptable barriers that prevent people with enterprise getting on and, from the classroom to the boardroom, widen and deepen the spirit of enterprise. We can and must do more. So in this and in other areas in this pre-Budget consultation we welcome your views

I believe that out of our discussions will emerge an even stronger consensus on the need for both stability and for higher investment in skills innovation technology and our infrastructure. And on the need for a strong enterprise culture. Out of dialogue consensus, and out of dialogue and consensus, a stronger partnership, working together for our shared goal – a more prosperous East Midlands and a more prosperous Britain.

The speech made by Gordon Brown, the then Chancellor of the Exchequer, in London on 26 February 2001.

1. Why children, why now?

From here in London, Clare Short and I want to welcome and thank all of you who gather here today from every continent — leaders of global organizations and of Governments — each with your own proud history and traditions, each with your own unique record of service and commitment, who have come together because of :

• our shared concern: for the many millions of the world’s children who live on the knife’s edge of bare existence;
• our shared indignation: at the senseless tragedy of young lives lost to disease and despair
• our shared belief: that the future we want for our own children is also what we want for all the world’s children;
• and most of all 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.

It is by putting the needs of the young and the poor not only at the centre of social policy but at the centre of financial decision-making, economic policy  and international diplomatic action, we can ensure a better future – a future of health and hope – in which no child is left behind and every child, in every country, has the opportunity to make the very most of his or her abilities.

Yet today we can predict with grim precision that as long as children’s needs are seen as incidental and not integral to what we as Governments do; as long as they are a part and not at the heart of all policy decisions we make; each and every day of this year 30,000 children will lose the fight they are waging for life.  Seven million children will perish before reaching their first birthday.  Over ten million will die before the age of five.

And let us not equate mere survival with strength: in the developing world, 150 million children are underweight, at severe risk to their mental and physical development.  Worldwide, 120 million children go without even five years of schooling, their chances crippled by disease, natural disasters and war before life’s journey has even begun.

This is the face of poverty today in the places and among the people left behind – staggering, disfiguring, galling, grinding poverty: the face of global poverty is the face of a young child.

And it is an affront to our basic belief in the equal worth, and inherent potential, of every human life.  It is a challenge to the values at the core of our character.

Those of us in the developed world, many of whom are enjoying unprecedented plenty, must regard poverty on this scale not only as an economic challenge, but also a moral imperative of the highest order.

I agree with those who say that good times are as stern a test of character as bad times.  In this era of prosperity, more than ever, the world’s children must become our cause.

In that spirit, let us start by paying tribute to the powerful example set by Nelson Mandela and Graca Machel.  No two individuals have done more to speak up for the future.  And when Nelson Mandela tells the children of the world —

‘If I could promise you every one of your days will be a day of leaning and growing, I would but I promise you what I know I can deliver: to work every day in every way to support you as you grow’;

And when Graca Machel says —

‘I have seen how one year of school changes a child … I have seen a generation of children armed with education lift up a nation’;

Then we know that, as we approach the UN Special Session on Children this September, these two leaders are inspiring – and Carol Bellamy and Unicef and UNDP are assembling – a new global partnership for children so wide, so powerful and so determined that no obstacle should be allowed to impede its    path of progress.

For if this is a moment of urgency, it is also a moment of profound opportunity.

Today we are also privileged to be hearing from Horst Kohler and James Wolfensohn, who have just returned from a pathbreaking trip to Africa…

• who heard the clarion call of an extraordinary coalition of faith groups, NGOs and multilateral organisations…
• who together brought the world’s richest nations to whom so much is given, and the world’s poorest nations whose needs are greatest, into a unique alliance to tackle debt and poverty – an alliance whose work, even as the first 22 countries secure debt relief, has only just begun.
• leaders who because they recognise the need for  a virtuous circle of debt relief, poverty reduction and sustainable development, have, along with Kofi Annan, the United Nations, Unicef, and UNDP, committed themselves to an historic joint declaration from which there is no turning back.

It is the first official joint declaration of the IMF, World Bank, OECD and UN that ‘poverty in all its forms is the greatest challenge to the international community.’

It is a resolution to work together to meet the 2015 development targets, not least:

• halving the number of people living in  poverty;
• enrolling all children in primary school;
• and reducing by two thirds infant and child mortality rates.

and it is a partnership against poverty which to succeed will demand new and concrete commitments;

and the purpose of this conference today is to examine the detailed means of reaching these goals.

2.  The purpose of this conference – a call to action

First, if we are to realize our shared goals we must embrace our shared responsibility – by setting out the practical steps each partner must take, for ends  will mean precious little without the means to achieve them.

Too often, the world has set goals like the international development targets of 2015 and failed to meet them.  Too often, we have set targets, reset them, and reset them again, so that our ambitions, in the end, outdistance our achievements.

Indeed, though our targets are achievable, we are already in danger of missing the mark.  Projecting forward, we can see our trajectory will fall far short on education, on health, on poverty.

So it is not enough that we have made a pledge.  As Mr Mandela and Ms Machel have written: ‘please hold us to it.’  theirs is a simple and powerful plea for the accountability we all must demand of ourselves  and demand of one another.  For if the sum of our actions amounts to no more than its parts, we will be fated to ask ourselves, in the year 2015, ‘why did we fail?’

If the worldwide debt campaign has taught us anything it is that we advance only if we advance as one.  For we are not powerless individuals, but together have power.  We are all rich and poor, old and young bound in one vast network of mutuality, across all the lines that might otherwise divide citizens of different countries, perhaps, operating from a thousand different centres of energy, conscience and conviction, but members of the same global community, the same moral universe.

Because our shared responsibility does not diminish our individual accountability, our conference must have a second purpose.  We must not only set ourselves on a specific course of action, but each of us as partners must be prepared to make radical changes in the way we act so that the goals of 2015 can be achieved.

Marching with us are not just the memories of those who lost out when we have failed in the past but the hopes and expectations, the dreams and ambitions, of millions of young people who look to us for the future.  And their voices must be heard too.

And so as the UK Government we make this declaration: that as we discuss with all of you how to meet these 2015 goals, we 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.  And we ask all other participants to do likewise.

Here in Tony Blair’s Government, Clare Short has been a true leader in changing the UK approach, crafting concrete, comprehensive policies for the problems of global poverty; increasing her aid budget by 2004 by 45 per cent in real terms, and untying all our development aid; ensuring that development assistance be directed to country-owned and community-driven poverty reduction strategies; renouncing Britain’s right to benefit from any of the highly indebted poor countries; bolstering conflict prevention with a new Africa fund and by banning for 62 countries export credits for unproductive expenditures; and because growth through trade is one of the best means of lifting people up, committing with all EU states to open our markets to all products made in the least developed countries, and to strengthen their voice in the WTO.

And today we hope that in our declaration each of us can move forward –  making new commitments that ensure that the work of each institution enhances the work of the other, and that the whole of our actions becomes greater than the sum of our parts.

Commitments from –

• the IMF and World Bank: that the detailed commitments in the poverty reduction strategies, including targets to reduce child poverty, will be implemented in practice at the centre of economic and financial policy;
• from the UN family: to support developing countries in making health and education a priority;
• from developed countries: to increase and untie their aid commitment, and to open their markets;
• from developing countries: to create community-driven poverty reduction strategies and make them the centre of economic policy;
• and from NGOs and faith groups: to coordinate their efforts in giving voice to the voiceless and empowering the powerless.

4. A call to action — to create the virtuous circle

And today as we issue 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, there are two areas on which action is imperative: education and health in the world’s poorest countries.

First, we know that education is a precondition of progress personal and national – the very best anti-poverty strategy, the best economic development program.  There is simply no better means to empower the powerless, to put their future directly in their hands.  Education should be the birthright of every child.

The case for investing in primary education is unanswerable and remains mostly unanswered.

In the past decade, primary enrolments have increased at twice the rate of the 1980s.  Still, tragically, 130 million children do not attend primary school.  two-thirds of these are girls. Almost half of all African children and one-quarter of those in South and West Asia are being denied this fundamental right, this basic root of all opportunity.  It is little wonder, then, that 900 million people over the age of 15 are illiterate – one sixth of the world’s population.

Public expenditure per pupil, in the 19 least developed countries, is less than $40 — compared to $200 per pupil in developing countries, and $5,300 in more advanced economies.

So there is more we must do; and that approach must begin with aid.  Since 1997, the UK has increased its commitments on education by £500 million.

But no aid budget, and no one nation, can achieve enough on its own.  And because multilateral action is essential, it is crucial that honoured in action is the commitment made by 180 countries at the World Forum on Education at Dakar to achieving quality basic education for all, with a special emphasis on education for girls.

And we must build on that commitment, as Graca Machel agrees, extending into the refugee camps and even beyond the confines of the camps into the areas of conflict themselves, helping ensure that one day, not even war or its aftermath will be an excuse for denying a child his or her basic human right of a decent education.

I know that with Prime Minister Amato addressing us by video link, and Finance Minister Visco speaking to our lunch, Italy, president of the G-7, has a new proposal for world wide action; and I am also pleased to announce that the British Government will create, in Her Majesty the Queen’s Jubilee Year, a fund to speed the introduction of universal primary education in the Commonwealth.  It is a fund to help the 75 million children in Commonwealth countries who lack a basic education, by building fair and effective education systems and creating new opportunity for girls and disadvantaged groups.  And we will call on business to support this effort.

We must also act – every bit as swiftly and purposefully – on health.

We know that the poorer the family, the less healthy the child. And we well know the cost, human and economic, of infectious disease in developing countries.  Diseases like malaria, tuberculosis and diarrhoeal diseases kill 8 million children a year.  In South Africa, Botswana and Zimbabwe, half of all 15-year olds are expected to die of aids.  In sub-Saharan Africa, where AIDS is the leading cause of death, AIDS will cut the GDP of some countries by 20 per cent.

These are dread diseases. But let us not forget that they are also preventable.  This knowledge shames us even as it spurs us on:

• as much 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;
• millions of lives could be saved by TB medicines, which are 95 per cent effective and cost as little as $10 for a six-month treatment;
• and millions of cases of HIV could be prevented through well-targeted, low cost prevention and care strategies.

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.

There is more that developing countries can do to reduce disease and despair; 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.  For example, in 1999, per capita health spending in sub-Saharan Africa amounted to $86 — a mere fifth of the world average.

So there is more we must do; and, again, we must do it together.  Ours should not be isolated interventions; everything we do must mesh with current efforts to improve health.  This government has today issued a paper on the merits of a comprehensive approach.

And today, on behalf of the British Government, Clare and I are pleased to announce two new proposals to improve health in the countries hit hardest.

First, where only 10 percent of all biomedical research is devoted to diseases that overwhelmingly affect the world’s poor, we will create new tax incentives to accelerate the research done on diseases like AIDS, TB and malaria.

I am further prepared to match that tax credit for research done in the United Kingdom with a tax credit for research done elsewhere.  But such a proposal must be met by a corporate commitment to create new drugs and vaccines in ways that truly meet the needs of the poor and sick.

And if the pharmaceutical companies were prepared to increase the availability of treatments on a pro bono basis – treatments that are genuinely needed – we would be prepared to match that commitment by considering it as a tax deduction.

Second, a purchase fund – providing a credible commitment to create a market for current and future treatments in developing countries – would surely serve as a strong incentive to develop and deliver affordable treatments.

That is why, in a joint effort with Italy, the President of the G-7, the UK proposes that a new global purchase fund for drugs and vaccines be created.  Both for treatments that do not yet exist but could be developed in time – for AIDS and malaria, for example – as well as for those that already exist and need to be purchased now.

Again, I call on the pharmaceutical companies to join us.  I call on them to step up to their responsibility – to recognize the scale of the challenge we face and to respond on an equal scale, by developing and delivering affordable treatments for the world’s poor.  Because, quite simply, we cannot save lives and raise hopes without their commitment.

Conclusion

Our purpose, Nelson Mandela has said, ‘is to get specific commitments… and specific results.’  And if we can do this in the world of tomorrow, countries can be defined not by land mass or military might as in the past but by the health and the achievement of new generations: the truest test of our progress is that a mother in sub-Saharan Africa can give birth without fear; that a child in South Asia has sustenance and shelter; that a young man or woman possesses the tools and skills and education it will take not only to live, but to thrive, in the 21st century.

And so here in 2001,

• led in our efforts by Nelson Mandela and Graca Machel;
• summoned to act by the cries of children;
• indeed inspired by the children I have seen in Jakarta living above open sewers, yet with eyes still bright with expectation and hope;
• moved to action by school-pupils in Uganda who we will hear about today, who because of debt relief will now see classrooms with roofs, schools with teachers , and school lessons with  books;
• shocked into even greater action by aid worker after aid worker describing mothers fighting to save the lives of their newborn children and, in that struggle, losing their own lives too, avoidable tragedies multiplied a million times over;
• encouraged by the new commitments by the IMF and World Bank and the UN family;
• and inspired by charities, churches, and companies who are engaged as never before.

We can see what the world – firm of heart and united in spirit – can do and will do – not as isolated 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.

From London in February to Washington’s IMF and World Bank meetings in April, from Genoa’s G-7 meetings in July to New York’s UN Children’s Summit in September, at every moment, our thoughts are on and our inspiration drawn from the needs of children in Jakarta, Bangladesh, Uganda, and anywhere and everywhere that poverty and injustice exists, so that we will achieve our goal, the goal of decent minded people everywhere in the world, that no child is left behind.