Tag: 2004

The speech made by Gordon Brown, the then Chancellor of the Exchequer, on 18 May 2004.

I am grateful to the Social Market Foundation not just for its contribution in forum after forum and publication after publication to a vibrant debate about the future of our country but for giving me the opportunity to speak on markets and social reform last year, now being so kind as to publish in pamphlet from the speech I made.

In the speech I argued for a new clarity on one of the oldest and most important issues in political economy: the role and limits of the state and markets.

I argued that markets are in the public interest, while not to be automatically equated with it, and that we should be advancing market disciplines across the economy – promoting greater competition, open trade, entrepreneurship and flexibility in labour and capital markets.

I said that where there are market failures we should work to make markets perform better – as in skills and training, in science and research and development, in financial markets, in regional policy and to tackle environmental damage.

And I suggested that where there are systemic problems with the operation of markets that cannot easily be corrected, such as in healthcare and other public services, the challenge is develop efficient and equitable but non centralist means of public provision.

Since that speech – and with your general support – we have already announced major changes in policy that were prefigured or anticipated by the arguments of the speech.

We have removed the last permanent industrial subsidies in coal, steel and shipbuilding.

We have announced the sale of UK Government privatised shareholdings.

From a platform of an increased national minimum wage and tax credits, we have promoted regional and local pay flexibility.

We have announced new deregulatory initiatives for the administration of small companies in for example VAT and audit.

We have agreed a four Presidency deregulation initiative for the EU, with the aim of putting every regulation to the competitiveness test.

We have proposed a further round of European economic reform – liberalising product, capital and labour markets.

We have proposed how the European Union can reform its state aid regime – abolishing wasteful state aids but also making sure the rules do not prevent measures which help make markets work better.

We have implemented our new competition and enterprise regime and the OFT and Competition Commission have a new work programme with investigations into market conditions in areas from pharmacies and doorstep selling to estate agents and the professions.

And we have invested substantially more in the areas where if Government does not act, voluntary, private or other agencies cannot be relied on to do so – in schools, adult learning, universities, colleges, health and infrastructure.

And in adult learning we are seeking a new partnership between government, employers and employees.

In health and the public services the programme of reform is proceeding faster than ever and that reform will go on and on.

Tony Blair and I are working closely on both our spending round and the five year departmental plans for the future:  radical plans for investment matched by reform which we and the Cabinet are also working through together, reform plans that we will outline in the next few weeks, reforms on the basis of which Tony Blair will map out the road ahead.

And working with John Reid in the field of health care, we are recognising just how much more progress on the reform agenda we can make.

Last year I argued for more devolution, more local accountability, more flexibility and more choice – more diversity of supply – in the delivery of services. But advances we are making now allow us to go even further.

Take information available to the patient. In my speech last year I pointed out that professional and care relationships suffer from information asymmetries — information asymmetries that made the typical market model of service provision difficult to work in every health care system including in America as well as Britain.    Whereas in a market there is always a temptation for the supplier to exploit information asymmetries, in public services we must attempt to face up to them in the interests of patient power.   So increasingly we will empower patients.

In addition to producing better information for patients through star ratings, putting waiting times and other information on the NHS.uk website, we are piloting expert support for patients in exercising choice over their care.  In our coronary and heart disease choice pilots, for example, specialist nurse ‘patient care advisors’ are being provided to help patients.  And we are now planning to roll out choice at referral, where PCTs and GPs will provide advice and support either directly to patients or with the help of voluntary organisations.  We are also providing more information particularly in primary care and for patients with chronic conditions where patients increasingly have considerable knowledge of their condition.

Addressing these asymmetries – putting patients and users of other public services at the heart of the delivery of those services – is a crucial aspect of the government’s desire to achieve a wider aim: to make public services more personal to the needs of the user.

Personalisation means opening up wherever possible a greater range of options to the service user and I believe it will serve us well to consider the future of the public services in this way: making public services responsive to the particular needs of their users so that his or her needs are better met:

• for the NHS patient, the opportunity to book an appointment time, to see their own electronic records, to choose a hospital
• for the school pupil, allowing the individual to learn at his or her own pace and style
• for the elderly or disabled person, the chance to design for themselves and then obtain the right package of care options for them
• for the young person on the New Deal, access to an adviser who can provide help tailored to the particular circumstances of the individual and the employment conditions of the area
• for the parent, a range of flexible childcare services and financial support to choose from
• for the local community, the opportunity to discuss and influence community safety strategies and environmental improvements.

And in this way the work of the doctor, the nurse, the teacher and the provider focus more on the individual needs of the patient, pupil and user than ever before; public services can be shown to be superior to privately provided services in these areas; and a new model of non centralised non market public service delivery can evolve – devolved, accountable, flexible, with the user in the driving seat.

For too long in the past chronic under-investment made many resigned to the poor performance of too many public services, standardised and uniform services starved as they were of resources and of long term direction and hope.  But today we can see a new vision ahead of us – where instead of standardised and uniform services, public services meet peoples diverse needs in ways personal to those who depended upon them

As Amartya Sen has famously argued, equality rooted in an equal respect and concern for our citizens demands not just greater equality of resources but also equal capability to function and develop their potential. Such capability can be developed through a new approach to public services – one that maximises responsiveness and flexibility to provide services that empower the individual to flourish and one that engages individuals themselves to be active partners in achieving these results.

Because achieving equality of opportunity is a fundamental goal in a progressive society, I believe each person has an equal entitlement not just to high standards of service, but to as equal a chance as another of developing themselves and their potential to the fullest. Because people begin from different starting places, in different circumstances and with different needs, public services need to be personalised in terms of their resources and range of provision.

Achieving this vision of personalised public services — meeting the individual needs of all our citizens — requires continuing reform in the way we deliver public services.  This is the process on which the government has embarked and on which we continue to push ahead, as we shall show in the spending review in the summer.

And this vision is not of personalised services just for the few, for those who can afford to buy them in the market.  It is for all.  For personalisation is not opposed to equity; it is at the very core of what equity means.  Achieving the goal of equality of opportunity – enabling each person to achieve their own potential to the fullest – requires a tailored approach that takes into account each person’s unique circumstances.

When I gave the speech to the SMF last year, some people said that the Government’s three goals for public services

– greater personalisation, higher efficiency, and increased equity – were mutually incompatible.  They said that we faced a dilemma:
– that if public services were to be efficient, they had to be inequitable, because only market mechanisms, which depend on ability to pay, can achieve efficiency
– and that if services are to be equitable and universally available to all, then they cannot be personalised, but must inevitably be uniform, inflexible and standardised

Yet, in my speech and now pamphlet, I showed how not just equity but efficiency is better served through a publicly-funded and publicly-provided NHS rather than a private market.

But now I believe we can go further than this. We can show that public funding and largely public provision cannot only be equitable and efficient but can provide personalised services as well.

I very much hope the SMF, along with other think tanks, will continue to contribute to the debates we are now engaged in on how we develop more personalised, equitable and efficient public services. I hope this pamphlet helps this process. I am very grateful to the SMF for publishing it.  And to all of you for attending this launch.

The speech made by Gordon Brown, the then Chancellor of the Exchequer, on 28 June 2004.

I am delighted to be here today with Britain’s top entrepreneurs, businesses and education organisations to launch a new campaign aimed at inspiring young people to believe in their own entrepreneurial potential and “Make Their Mark”.

As you know, the campaign will culminate in November with the first ever British ‘National Enterprise Week’ designed to encourage young people to think entrepreneurially, to get them excited about the possibilities of starting up a business, and to mark a step change in the creation of a more dynamic enterprise culture in our country.

And I want to take this opportunity to thank all of you here who are working tirelessly to make Enterprise Week a success: Kevin Steele and George Cox from Enterprise Insight; and all the individual members of the Enterprise Insight campaign who are bringing together so many events into just one week this autumn.

During Enterprise Week Britain will showcase our entrepreneurial talent and inspire young people in every region of the country:

• over 2,000 young people from all over the world will compete in a 24 hour global enterprise challenge;
• Shell Livewire will showcase their 300 best young business start-ups;
• Britain’s 100 fastest growing inner city companies will be rewarded for their success;
• young people will attend mentoring classes, networking events and workshops with established entrepreneurs;
• there will be competitions for the most innovative business ideas; and
• there will be enterprise roadshows for school pupils all over Britain.

And as we launch this Enterprise Week campaign today, I can also tell you that there will be three other competitions to recognise and reward our brightest and best entrepreneurs – and the cities and towns that are doing most to encourage the entrepreneurs of the future.

The ‘Enterprising Britain’ competition will identify British cities or towns that have championed a culture of enterprise throughout the regions of the UK. Nominations from across the country will be unveiled during Enterprise Week, and Britain’s first national capital of enterprise will be chosen next spring.

I congratulate the Daily Mail and Enterprise Insight for setting up, in parallel, ‘Enterprising Britons’ – a competition to find the nation’s most outstanding enterprising individuals – with the winners crowned during Enterprise Week this autumn.

And when in a fortnight’s time the Queen and other members of the Royal family visit the most outstanding examples of enterprise in each region, we will be announcing a new Queen’s award for enterprise.

As we celebrate entrepreneurship I have set a goal for the Pre-Budget Report, which will be presented to the House of Commons at the same time as National Enterprise Week, to do more to remove all the old barriers holding the enterprising back.

For too long, in too many areas, for too much of our recent past, enterprise has been seen as something for someone else, for a small elite. People thought the opportunity to start a business, to become self-employed, to make their ideas happen, was, somehow, not for them.

So we must rebuild a truly enterprising culture in Britain and we must open up enterprise to all.  Encouragement for business start ups must be available in the highest unemployment area as well as the most prosperous areas, to the redundant worker as well as to the tycoon’s son.

I want us to create a Britain of ambition where what matters is not where you come from but what you aspire to – and where business creation is encouraged.

That is why in the last seven years we have put in place reforms to help business start up and grow.  We have cut capital gains tax from 40p to 10p. We have introduced the most open competition regime this country has seen. To cut the penalties of failure we have radically reformed the insolvency laws. We have cut small companies corporation tax from 23p to 19p, with a new zero rate for the smallest companies first £10,000 pounds of profit. And perhaps most importantly of all, we have created economic stability in which businesses can plan ahead with confidence.

As a result more people than ever want to start businesses. There are 100,000 more businesses than in 1997, 3000 new businesses are starting up each week, and last year saw the fastest rate of increase in self-employment for two decades.

55 per cent of people now believe they have the skills to start up a business, compared to 40 per cent in 2001.  Indeed 39 per cent believe there are good start up opportunities for them, compared to 18 per cent, only a few years ago.

It takes 24 days to set up a business in the rest of Europe but only 7 days in Britain – and I want that time to be even less.

So we have made progress but there is still much more to do.

It is because we want as strong and deep an enterprise culture as the United States, that Britain must now prepare for the next round of enterprise reforms: removing the barriers to enterprise; more devolution of business support to the regions; and enterprise brought into schools and universities –  as well as greater encouragement for entrepreneurs.

At every stage – whether for companies starting up, investing, hiring, training, seeking equity, exporting – our aim is to be on businesses’ side.  And, learning from flexibilities in the United States, we are working to remove all the old barriers holding the enterprising back:

• we are simplifying VAT, audit and regulatory regimes;
• instead of having to account for every transaction there is now a simple flat rate VAT calculation for small businesses which lifts the burden of VAT red tape off the shoulders of hundreds of thousand of companies;
• we have exempted more small businesses from the requirement to submit an independent audit;
• we have set up a review to minimise and reduce duplication in the inspection system and enforcement regimes;
• this year we will launch new funds for enterprise capital, to bridge the funding gap many new businesses face;
• and because run down inner city areas or derelict industrial estates should not be seen as no go areas for new business but as areas of business opportunity – offering new choices, new recruits, and new markets – we have put in place 2000 new Enterprise Areas with stamp duty exemptions, community investment tax relief, fast track planning, and enhanced capital allowances for the renovation of business premises.  And I want to look at how we can go even further to encourage enterprise in disadvantaged communities in particular.

And I believe that the announcements we make in the forthcoming Spending Review will reflect these priorities.

Indeed I have studied the submissions of the Spending Review and what is remarkable is the consensus from unions to management; from Scotland, Wales and Northern Ireland to the regions of England south and north that enterprise, along with science, innovation and skills, must be an investment priority for government.

And in each case we should commit ourselves to the long term – resisting the old stop-go in spending that has done so much damage in the past.

To make business support services more responsive to local people and local businesses, we will confirm in the Spending Review that the Business Links service – which helped half a million businesses last year – will be devolved out of Whitehall to the regions and we will do more to give RDAs the freedom and flexibility to be the driving force behind enterprise and business growth in every region of the country.

Creating an enterprise culture starts not in the boardroom but in the classroom. Yet when I was at school no business ever came near the doors of our classroom.

I can tell you today that there are funds set aside in the forthcoming Spending Review so that each school will be able to offer every pupil not just work experience but 5 days of enterprise education too.  1000 new enterprise advisors are already working in schools in deprived areas. And a week ago experts from Britain and the US met in Boston to share experience on inspiring young people in schools about enterprise.

British universities, once slow to respond, are now fixed on working with businesses, expanding university spin offs, licensing technologies and teaching students about enterprise.  The spending round will offer more incentives for university and graduate enterprise.  We will encourage existing firms to use the entrepreneurial skills of Britain’s universities and colleges.  And this autumn we will launch a new National Council for Graduate Entrepreneurship – which, working with the Kauffman foundation, will hold an international conference on how we can do more to put enterprise at the centre of the university curriculum.

All our proposals on enterprise for this year each add up to something bigger than their individual parts – initiatives that taken together can make a difference, and contribute to a change in culture and attitudes by valuing and celebrating the spirit of enterprise throughout Britain.

We know how much stronger our economy and our society will be if we see released all the dynamism, creativity and potential of all our people.  But too often, young people do not believe that enterprise is for them.

That is why this campaign and Enterprise Week are so important – inspiring young people to be enterprising, mobilising people to aim high and to achieve success, and giving those with ideas and ambition the confidence and know-how to start up their own businesses and make a success of their ideas.

So I urge you all to get involved and play your part in making Enterprise Week a success:

• setting up and taking part in enterprise events;
• telling the world about Enterprise Week – helping to get the enterprise message to young people where they spend their time – in  schools, universities, pubs and coffee shops, and online; and
• sharing your stories about how ideas can become successful businesses.

Because with business, government and the voluntary sector working together, I believe we can foster a British enterprise renaissance – and begin to tap the immense skill and entrepreneurial talent that exists in Britain to the benefit of the whole community.