Tag: Speeches

Below is the text of the speech made by Sajid Javid, the Secretary of State for Business, Innovation and Skills, at the Mansion House in London on 2 March 2016.

My Lord Mayor, ladies and gentlemen.

First of all I think I have to congratulate the Lord Mayor on his grasp of Klingon! I have my own favourite Klingon proverb:

…a leader is judged not by the length of his reign but by the decisions he makes.

Lord Mayor, I know you have only one year in the job, but I’m sure you’ll make some great decisions!

Let me begin by saying I’m delighted to reply to that toast, and by thanking you for the honour of inviting me to this important event in this beautiful, historic setting.

King Alfred and Alexander the Great are indeed hard acts to follow. When Alexander was 32 years old he cried salt tears because there were no more worlds left to conquer.

I’m 46 and I’ve won 2 elections in Bromsgrove. I feel I have some catching up to do.

Now, the statues of the great and good here remind me of a speech I gave this time last year, at another historic venue. That was the Chapter House in Westminster Abbey.

There’s a story that says the monks who used to run the building were deeply unhappy with the boisterous, rude politicians who used to work there.

So after Parliament moved out, they got their revenge, by painting various MPs into a depiction of the damned at the last judgement.

I’m a little worried that I’ll go back with my kids one day and they’ll spot a bald, brown guy in one of the paintings. If they do I’ll just say it’s Chuka Umunna!

Chuka’s not here is he?!

Mansion House regulars will have noticed that at this trade and industry dinner you don’t just have a new Lord Mayor – you also have a new Business Secretary. The first since 2010.

I’d like to take a moment to pay tribute to my hardworking predecessor, Sir Vince Cable. The longest-serving holder of this post since Sir Peter Thorneycroft back in the 1950s. And, more importantly, a veteran of 5 trade and industry dinners. That must be a record. A very hard record to beat.

I actually have a lot in common with my Liberal Democrat predecessor. I modelled my hairstyle on him, for example.

But I also share his sincere belief that business is a force for good. One that deserves the complete support of government at every level.

Of course, there are one or two differences in how we think that support should be offered. And you won’t be surprised to hear that!

Perhaps the biggest difference is in our approach to industry. Sir Vince’s Industrial Strategy was well-regarded among those it benefited. But its impact was strictly limited, offering support for just 11 tightly defined sectors of the economy.

That was great for the chosen few, who had all the resources of BIS standing behind them. But businesses outside the gilded circle took that to mean they didn’t matter to the government. That they were on their own.

When I was Secretary of State for Culture, Media and Sport, I frequently heard from members of our £80 billion creative industries that they didn’t feel valued. That they weren’t taken seriously, despite being global leaders in their field and employing millions of people. The same was true of our £100 billion tourism sector. And since taking up the reins at BIS I’ve heard similar complaints from across British business.

So it’s time for a change. Which is my strategy for industry – and yes I do have one – is different.

I’m not trying to pick winners. I’m working to create the conditions in which all British businesses can thrive.

My approach can best be described as non-interventionist but highly engaged. It’s about building on previous success, with a much wider dialogue. About listening to businesses from all sectors, working with them to remove barriers to growth and productivity, and creating the conditions in which they can thrive.

We’ll still be talking to and working with the main sector councils. They do great work and they know their areas better than anyone. But I’ve taken the old strategy’s closed shop and replaced it with an open door. A willingness to deal with representatives of all sectors and to respond positively to industry-led solutions.

This shift in focus is particularly important given the arrival of what has been dubbed the ‘fourth industrial revolution’. Advances in technology are challenging the tyranny of conventional wisdom and blurring the lines between traditional sectors.

The world’s biggest taxi company, Uber, doesn’t own a single taxi. The world’s biggest provider of accommodation, AirBNB, it doesn’t own a single hotel room. Or a multi-billion dollar media company, one of the largest in the world, Facebook, doesn’t create any original content.

Which sector does a start-up fall into if it designs, makes and sells bespoke knitwear using the latest technology? Is it creative? Is it manufacturing? Is it retail? Is it digital?

In a world where old labels are becoming increasingly meaningless, it makes no sense to build an industrial strategy around them. Business is changing and it’s only right that government’s way of interacting with it changes too.

That’s why I’ll be taking this new approach to industry. And that approach is the first of my 6 priorities.

Now, Friedman told us that in a free market, no exchange takes place unless both parties benefit. But lately it has often seemed that the opposite is true.

We’ve seen established interests trying to stop disruptive rivals from entering the marketplace. We’ve seen car buyers that have been lied to about emissions levels. We’ve seen growing businesses stopped in their tracks by barriers as diverse as unfair energy bills and burdensome regulations.

It’s not good for business, it’s not good for customers, and it’s not good for productivity. That’s why my second priority is to make markets work better – both for businesses and for consumers.

In line with the new approach to industry, we’re doing this through determined deregulation and a hands-off approach. We’re maintaining standards without stifling innovation or attempting to tell people how to run their businesses. We’re looking at ways we can use increased competition to raise the UK’s game on productivity. And we want to empower consumers, making it easier to understand what deals they’re being offered and how they can get the best one for them.

I want to see the Competition and Markets Authority and the economic regulators using their competition powers to maximum effect with the smallest possible burden on business. And that includes looking at specific markets to identify barriers to effective competition, and standing ready to act on the CMA’s flagship market investigations into banking and energy.

There’s also a role for government in repairing market failures. It’s not the job of the state to step in and prop up unviable businesses. But when a need isn’t being served, when demand isn’t being met, a carefully planned intervention can make a difference.

Five years ago Vince Cable stood here and he talked about plans for a Green Investment Bank. A world first, a unique vehicle to tackle risks associated with green infrastructure that the market was unable to adequately finance.

Now 5 years on, the GIB has been an unparalleled success. It has delivered over £10 billion of finance for over 60 projects. And it is making a 10% projected return on its investments.

But more than that, it has created a new market for such investments by showing that sustainable projects can deliver real returns. That environmentally friendly ideas can also be serious investment opportunities. That green really is the colour of money.

Back in June I explained that the time had now come for the GIB to stand on its own 2 feet, that we would move it into private ownership. And tonight I can announce that the formal sale process will begin tomorrow morning. I can see there’s at least one eager buyer here. But you’re going to have to wait until the morning.

We expect there to be significant interest in the market, as a range of financial institutions and pension funds seek to tap in to this successful asset class and green their own portfolios. And, as I said in the House of Commons last month, its unique green mission will be protected by the creation of a special share.

Now many of the GIB’s investments have helped cutting-edge innovative projects and these ideas have helped reach the mainstream. As we’ve already heard this evening, innovation is something we should nurture and sustain. Because, as the Lord Mayor himself said in a speech here last November “innovation means prosperity”.

And that’s why innovation is the third of my priorities. The UK has a long history as a hotbed of new ideas and new ways of thinking. We’ve all been taught how the incredible inventions of the late 18th and the early 19th centuries led to a golden age of British industry. And I firmly believe that we have the talent and potential to similarly dominate in the 21st century. But only if the government helps create a climate in which innovation can flourish.

We must have more intelligent regulation. We must improve access to finance. And, above all, we must help to develop the technology and skills businesses will need to compete in the 21st century market of ideas.

Building on the success of the plans to boost productivity and improve competition, I’m leading work on a government-wide innovation plan.

It will help ensure that the money invested by all departments in all forms of innovation is spent in an effective, joined-up manner. It will also help to focus Whitehall minds on the need for innovation within government. Every year we spend £250 billion on procurement – and innovation shouldn’t just be something for the private sector.

This government’s commitment to supporting innovation was made clear by the Spending Review, which protected our annual £4.7 billion spend on science and research. Funding that will be used to create everything from lifesaving medicines to world-changing inventions. And we’re making it easier for the private sector to innovate, with Research and Development tax credits, the Patent Box and Entrepreneurs’ Relief.

Of course, all the good ideas in the world won’t lead to economic success if we don’t have the skilled workforce that is needed to take them from drawing board to factory floor. And that’s why my fourth theme, building skills for the future, is so important.

The global marketplace is changing, and the British workplace is changing with it. The challenges we face today are very different to those that we faced just a generation ago, as are the skills required to compete. We neither can nor should attempt to compete with low-skill, low-wage emerging economies in a race to the bottom.

Instead, in order to deliver the high-wage, low-welfare economy we are aiming for, we must ensure that British workers have the training they need in order to take on the skilled jobs of the 21st century. There is excellent work going on in schools, in colleges and in universities to see that the next generation is properly equipped. And our commitment to deliver 3 million apprenticeships is already delivering real results.

However, the vast majority of people who will be working in Britain in the next 25 years are not in full-time education. They are already out there in the workplace. And the idea of a skill for life, of learning a trade, of never needing further training, is a thing of the past.

Fortunately, the new technology that is changing the workplace is also changing the way we study and learn. For example, the internet makes it easier than ever to deliver high-quality, scalable education outside the traditional classroom.

So I want to see a new focus on adult learning, part-time study and workplace training to give Britain’s workers the skills they need and they deserve.

I’m working on this with colleagues across government. I can’t tell you too much of the detail right now. But it’s something you’ll be hearing a lot more about it in the weeks and months ahead.

Now the fifth item on my to-do list regards maintaining and growing Britain’s status and reputation as a global trader.

Britain has always been a trading nation. As we just heard from the Lord Mayor. As Andrew Sentence wrote in the ‘Telegraph’ over the weekend, trade has underpinned British success and growth for almost a thousand years.

In fact the position of First Lord of Trade – the predecessor of the President of the Board of Trade – was created half a century before Walpole became the first Prime Minister.

We have unrivalled cultural and political ties with nations across the world. But in recent years we have not always excelled at turning them into profitable trade links. We can and must do better, particularly with emerging economies and new markets.

Our export strategy sets out some of the steps we’re taking to make this happen. I’m chairing the Export Task Force, bringing all of government to bear on the issue. You can’t fail to have noticed our new Exporting is GREAT campaign, bringing British businesses together with customers around the world. And when Mark Price arrives in the department later this year, at the top of his in-tray will be implementing the reforms of UK Trade and Investment that were put in train by Lord Maude.

UKTI has a wide-ranging and well-resourced worldwide network. I want to make sure it focuses all its energy on what really matters – supporting British exporters and attracting inward investment.

And let me take this opportunity to thank Lord Maude for all he has achieved as Minister of State for Trade and Investment. Over the past 3 decades, Francis has been a fantastic servant of his country, his party, his government and, above all, British trade and industry. I’m sure I speak for everyone here today when I say that he will be sorely missed, and wish him all the very best.

On the subject of international trade… Some of you may have missed it, as the media silence on this subject has been deafening. But later this year there will be a referendum on whether the UK should remain a member of the European Union.

Now I, personally, have no time for ever-closer political union. But, like the City Corporation, I accept the UK does well from being part of a 500-million strong single market. I see the benefits of the many trade agreements that have been negotiated by Brussels in the 4 decades since we joined. And I recognise that it could take many years to replicate that position following a British withdrawal.

However, regardless of whether we vote to stay or go, one thing is clear. In 2016 we can’t afford to only trade with the close and the familiar. The world is too big, the international marketplace is too diverse to simply stick with our neighbours on the continent or our Anglophone allies.

Finally, my sixth priority is to ensure that the benefits of business growth are felt not just here in the Square Mile but right across these islands. The United Kingdom is one nation, and we are a one nation government. Not a government for big business, or a government for the south east of England. But a government for the whole nation.

So supporting local growth is the forefront of my department’s work, including continuing the success of local growth deals. My department has played a key role in delivering the Northern Powerhouse and Midlands Engine, helping the region I was born in and the region where I now live to make the most of their incredible potential.

In line with my wider approach to industry, such support and interventions are led by those ‘closest to the action’. An entrepreneur in Stockton knows far more about the economic needs of the north east than a civil servant or politician sitting in Whitehall, and is far better placed to take the lead through fora such as Local Enterprise Partnerships.

So there you have it. Six themes, 6 ideas, 6 priorities, 6 goals. Taken together they form a vision for what is an ambitious strategy. But one that I believe we can, and should, reach out for.

Over the past 6 years, all of us – businesses and politicians alike – have worked hard to turn around Britain’s economy. We’ve gone from a record-breaking recession to record-breaking employment. From the world’s biggest bailout to world-leading growth. And it has been an incredible rise, but having gone from rescue to recovery, we now face a new task.

We have to build on what we have achieved. We have to consolidate our gains.

Doing so requires a new way of working, a new way of looking at business. It’s not enough to rely on what worked before. The world has already moved on and if we stand still we will be left behind. Change is well overdue in business policy, and change is what I am delivering.

Tonight I’ve set out what that change will look like. And I look forward to working with all of you to give British trade and industry the support it both needs and richly deserves.

Thank you.

Below is the text of the speech made by Sajid Javid, the Secretary of State for Business, Innovation and Skills, at the Savoy Hotel in London on 1 March 2016.

Thank you, Tim, and good evening everyone.

I see a lot of familiar faces here.

It’s always great to be asked to speak to organisations like the BVCA.

I was in finance a lot longer than I’ve been in politics, so it always feels a bit like coming home!

And it’s kind of fitting to be here at the Savoy, halfway between the Square Mile and Westminster, between my first career and my second.

Of course a lot has changed in your industry since I left Deutsche Bank in 2009.

For example, last month I saw that there’s a new kid on the VC block.

Sesame Street.

Seriously!

The company behind the children’s TV programme is going to invest in start-ups in education and health.

We’ll see finance brought to you by the letters I, P and O.

And, having met plenty of VC people during my time in the City, I’m confident that Oscar the Grouch will fit right in!

Don’t worry Rob, I’m not talking about you!

J. Paul Getty once said that the secret of success in business was to rise early, work late… and strike oil.

It’s sound advice, up to a point.

But most businesses need a more reliable source of finance.

And that’s where private equity and venture capital really come into their own.

Now, more than ever, you have a vital role to play in Britain’s economy.

And I’m proud to stand here tonight and say that the private equity and venture capital sector has the full support of the Business Secretary.

I know that’s not always been the case in the past.

It’s all too easy to paint you as vultures or parasites.

And let’s face it, no politician ever lost votes by being too harsh on people working in finance!

But such days are behind us.

I know just how important your work can be.

I know that, far from being the bloodsuckers of internet myth you actually breathe life into companies.

You don’t strip out jobs, you create them.

You put your money where your mouth is, and take the kind of calculated risks that benefit us all.

When I worked in emerging markets I saw, again and again, how a little faith from investors at the right time can make all the difference.

You take an idea, see its potential, and give it the boost it needs to become reality.

When you get it right, everyone wins.

And when you get it wrong… Well, you’re the biggest losers.

Fortunately that doesn’t happen very often!

BVCA members are currently investing more than £5 billion in more than 700 companies in the UK.

Together, those companies employ well over 100,000 people.

And of course the vast majority are SMEs with high growth potential, which means they’re likely to go on and create many more jobs in years to come.

It’s clear that your confidence is coming back.

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Equity investment in small businesses grew by more than 40% in the year to October.

You’re also making a real difference right across the country.

Three-quarters of BVCA members’ investment goes outside London.

You’ve recently doubled the level of investment in my home region, the West Midlands.

That’s a real boost for the region as we work to fire up the Midlands Engine.

And a real sign that you’re ready, willing and able to back exciting, innovative ideas wherever they may be.

That’s particularly important right now.

Last week I attended the annual conference of British manufacturers, I spoke there in fact.

And one message that came through loud and clear from all the speakers was that manufacturing is changing.

That industry is changing.

That as we enter this fourth industrial revolution the greatest demand in advanced economies is not going to be for raw materials, but for ideas.

New ways of thinking

New ways of working.

New ways of manufacturing.

In the past we’ve thought of cutting-edge start-ups as something limited to Silicon Valley and Tech City.

However, in 2016 those labels are becoming less important.

The lines between industry and technology are becoming blurred.

That change brings with it incredible potential for economic growth.

But only if the right finance and funding is available.

And only if the people holding the purse strings can match the vision and ambition of the innovators themselves.

That means you, by the way!

But I’m not going to tell you to go out on a limb on your own.

My department, and the government as a whole, is and will remain a committed partner in helping you support innovative companies to develop and grow.

The British Business Bank is playing an active and collaborative role.

So far its VC Catalyst, Angel Co-Fund and Enterprise Capital funds have facilitated new finance of almost £1 billion for nearly 500 businesses.

On top of that, the bank will shortly be calling for innovative and ambitious investment strategies for delivering debt and equity finance through the £400 million Northern Powerhouse Investment Fund.

So get your thinking caps on!

We’re also committed to delivering a tax system that incentivises investment in growth and innovation.

So far we’re offering Venture Capital Trusts (VCTs), the Enterprise Investment Scheme (EIS) and the Seed Investment Scheme.

And there’s no doubt this trio of measures are working.

In 2014 to 2015, VCTs issued £435 million of new shares and currently have investments in over a thousand companies.

And in one year alone the EIS facilitated more than £1.5 billion of investment in not far short of 3,000 businesses.

It’s pretty clear that it’s playing a pivotal role in supporting a vibrant, early stage equity culture.

In fact the schemes have proved so successful that we sought and secured State Aid approval for letting them provide additional support to knowledge intensive companies.

Exactly the kind of companies that will be shaping the future of British industry.

When those companies are ready to go public, we want it to be as easy as possible for them to do so.

That’s why we abolished stamp duty on Alternative Investment Market shares and made them eligible for ISA investments.

We have also worked with the London Stock Exchange as it has introduced such innovations as the High Growth Segment.

It allows high growth potential businesses to list on the main market with an initial free float of as low as 10%.

And of course we’re also doing everything we can to make Britain the best place in the world to start and grow a business.

So we’ve extended the doubling of small business rate relief until 2017.

We’ve cut corporation tax to the lowest level of any major economy.

We’ve lifted hundreds of thousands of businesses out of employer National Insurance contributions.

We’ve set the highest ever permanent level for the annual investment allowance.

And we’ve got Research and Development tax credits, the Patent Box and Entrepreneurs’ Relief, all of which encourage further investment in innovation and ideas.

We’ve slashed £10 billion of red tape for business, and are committed to cutting another £10 billion by 2020.

And the Enterprise Bill, currently before Parliament, will create a new Small Business Commissioner to give SMEs a stronger voice.

But we can do more, and we are doing more.

We need to ensure that the UK has the research base and the productivity levers in which innovative high-growth companies can start, grow and compete globally.

Last summer, as you may have seen, we launched a plan called Fixing the foundations.

It’s our cross-government plan for increasing productivity right across the economy.

Our vision for increasing long-term investment in people, capital and ideas, as well as making markets more dynamic.

That includes everything from increasing the quality and quantity of apprenticeships, to reforming the planning system, to changing the way the government supports growing companies who want to export.

Alongside this, at the Spending Review, I was able to secure an investment of almost £7 billion as part of the national science capital commitment.

I also protected today’s £4.7 annual billion resource funding in real terms.

Together, this underlines my commitment to keeping the UK a world leader in science and research.

We’ve created Catapult centres that help business and researchers turn great ideas into commercial reality.

And, building on this, we’ll shortly be publishing a National Innovation Plan to ensure the UK remains an international beacon for bright ideas.

The plan will bring together ideas, levers and investment from across government, so we can create the right conditions for businesses to innovate and grow.

These are the businesses that are the key to our country’s economic future.

And that’s why your role in backing them through their early development and growth phase is tremendously important.

But it’s not just about cold, hard cash.

Venture capital and private equity at its best is about more than just providing funding for companies to develop, grow or restructure.

It’s about nurturing talent too.

About helping talented yet inexperienced entrepreneurs to devise and implement long-term growth strategies.

About understanding what it takes to help a high-potential business through the development, early growth and scale-up phases.

And that’s where the people who been there and done that a thousand times before, people like the BVCA members here tonight, can really add something special to the mix.

It’s your wisdom, understanding and long-term commitment that brings the greatest rewards.

And that’s why you can do so much more than any politician or civil servant ever could.

You’ve been there, you’ve done that, you’ve seen what works and you know what doesn’t.

And it’s that knowledge, that experience, that will turn the next generation of great British ideas into the next generation of great British businesses.

That will turn exciting innovations into real-world jobs and growth.

What you do isn’t easy.

It isn’t easily understood and all too often it’s not even popular.

But it is absolutely vital to the future of our economy and our country.

And I’m proud to say that both myself and the government support you all the way.

Have a great evening.