Tag: Speeches

The speech made by Gordon Brown, the then Chancellor of the Exchequer, on 16 February 2000.

Britain can enter a new year of challenge with more optimism than for many years.

If in the twentieth century Britain suffered relative economic decline, the twenty first century can be one of economic renewal, where the challenge for Britain is to build on the best chance for stable long term prosperity we have had for generations.

My optimism is rooted in my belief that we are rediscovering our essential strengths as a nation.

We are rediscovering the strength to take the tough decisions to build a framework of fiscal and monetary stability.

While the need for stability was taken for granted in our nineteenth century economic heyday the pressures of twentieth century politics pushed successive governments off course.

We have now, as a country, found a new resolution to take the tough decisions and entrenched it with the independence of the Bank of England and our new rules and code for fiscal stability. Britain now has the foundation of stability on which to build.

We are not only rediscovering our commitment to toughness in economic management but, even more important, our commitment to the work-ethic.

With our new deal, the work ethic is being reestablished in every part of Britain. And we are stage by stage building it into the culture of our society, with radical programmes of reform in education and welfare to work.

And we are also discovering – and this is my theme today – new ways of harnessing our innate creativity and adaptability as a people.

At every point in our industrial history our greatest successes have been built on the creative genius of our people and the willingness to adapt and change. This is true not only of the inventive skills – from the steam engine to jet engine – which made Britain the home of the first industrial revolution but also of the pioneering work of Babbage and Turing that made possible the computer and information revolution.

Now that the future is knowledge-based – e-shaped, if you like – we can already see the qualities needed for success: those countries that will succeed will be those that can best unleash the potential of their people by drawing on the qualities of creativity, flexibility and adaptability, the work ethic and of course an open and outward looking approach to the world.

So, I believe Britain to be well-placed to lead in this new world and I want to suggest today a number of measures that can help us succeed.

But let us remember the challenge we must surmount. For today, just one in ten companies in the UK sell on-line.

Just one in four companies make purchases on-line.

Just over forty per cent of households already have computers.

Around ten million people – less than 20 per cent – use the Internet.

We must do better and start doing better now, this year.

I recognise success for the future will not come automatically. And much of our success will come from government getting out of the way and releasing the energies of the British people. But I also want today to draw attention to how, through applying British values – our creativity, openness, and willingness to adapt – we will bring into play the critical ingredients for success.

First, measures to create a knowledge economy – through the encouragement of competition, innovation and new business development – not least measures that need to be backed up by a willingness in the public sector to innovate.

And second, measures to create a knowledge society through transforming education and widening access for all, drawing on the long-standing British commitment to fair play and opportunity for all.

1. The knowledge economy

First, measures to create for Britain a strong knowledge economy.

The sharpest spur to innovation, efficiency and improvement is competition.

The new economy of the next decade will need more competition, more entrepreneurship, more flexibility and more long-term investment.

And Britain is well-placed to rediscover the genius for creativity and invention that was displayed so clearly in the industrial revolution.

Indeed, our creative talents that are flourishing today in design, communications and software serve us well for the next stage of the e-commerce revolution.

The Government is now reviewing every barrier to competition in the emerging e-commerce market and seeking to remove them.

In every area we are asking what we can do to enhance competition and opportunity.

Our new Competition Act not only makes our competition authority independent but also for the first time prohibits all anti-competitive practices.

And we are now reviewing the rules of professional associations to ensure there are no unfair barriers to entry holding back the new economy.

It is critical to ensure that the price of telephone use is not a barrier to greater Internet use, or leads to a divide between IT-haves and IT-have nots.

Affordable high speed access to the Internet for both businesses and consumers is key to the future growth of e-commerce in the UK. This requires the right infrastructure for the different forms of access, delivered within a competitive environment. So I am encouraged by a number of developments in this area.

One of the inhibitors to greater use of the Internet in the UK has been expensive telephone charges. But industry is responding to competitive pressures and consumer demands. BT recently announced proposals for a series of Internet pricing packages allowing unmetered Internet access. This was followed on Monday by an announcement from TeleWest that they will offer unlimited access to the web – 24 hours a day, 7 days a week – for 10 pounds a month. Other companies are likely to make similar announcements soon. So very soon, just as you can in the U.S., you will be able to surf the net without worrying about the cost of each extra minute.

And Oftel have announced new pricing arrangements so that Internet service providers can choose how to price their calls. This should further enhance the competitive pressures that are pushing down the cost of Internet access in the UK.

Equally important to cost is the availability of high-speed access – broadband access – to the Internet. The upgrading and unbundling of BT’s local loop is a welcome and major step forward in this area.

In the spring BT will be rolling out ADSL – bringing high-speed Internet access to homes and businesses across the country. But this must be done within a competitive environment to ensure broadband access is affordable. To promote competition, Oftel will ensure that other operators are able to provide their own broadband services over BT’s local loop by July 2001- if not before. Indeed, I know that Oftel believe this timetable can be improved. Let the industry be in no doubt that I stand full square behind Oftel in these aims. We will not allow any foot-dragging here.

We are also actively promoting other forms of broadband access, again ensuring these are delivered with a competitive and innovative environment.

Britain is at the forefront of the new third generation technology that will revolutionise the mobile phone – allowing access to data up to two hundred times faster than through existing mobile phones. The new spectrum auction – the auctioning of five licenses, one of which will be reserved for a new entrant into the market – is designed to maximise competition. There have been 13 applications to participate in this auction.

And we are looking to rapidly roll out fixed wireless technologies. Last May, Michael Wills and subsequently in January Patricia Hewitt set out the Government’s plans to make radio spectrum licences available for new broadband fixed wireless access services. The first of these will be available in the Summer. And we will be ensuring that these licenses are allocated within a competitive environment.

I encourage the industry to think creatively and come forward with innovative proposals for the use of this exciting technology. This should provide an early alternative to fixed line access and is especially good news for small businesses.

These are welcome and exciting developments but I remain concerned about the competitive disadvantage that British businesses face in this area. I want to see a quick roll out of the necessary infrastructure, and competition to drive down prices further, so that the costs in the UK for both business and consumers are comparable to those in the U.S. I know that Oftel share this desire.

I met with David Edmonds, the Director General of Oftel, yesterday to discuss developments, and to emphasis the strong support that Oftel have from me and others in Government. We discussed how important it is for the competitiveness of the UK economy that urgent progress is made. I know that David firmly shares my strong belief that delivering low cost Internet access is one of the single most important things we can do to promote the knowledge economy. It is our aim that the cost of using the Internet in the UK will be as low as in the U.S. by end 2002. This is our challenge to the industry – a challenge our country needs met, a challenge we will continuously monitor in detail and if not being met will prompt us into further action.

But we must do more than simply create this new competitive environment.

I have said I want British creativity and inventiveness and enterprise to flourish in the new knowledge economy.

So we must also create an environment more favourable to the high investment, high skill, hi tech and high wage economy we want to create for Britain.

The measures that will release what I sometimes call the British genius for invention and enterprise will include incentives that encourage new investment and more innovation; the transfer of technology – with, overall, a more favourable commercial environment and tax regime.

A goal for Britain is to lead the way in the interactive content industry, which will be one of the biggest drivers of growth in the new economy. Just as Hollywood brought together, for the film industry of the 1930s, the finance and management skills, together with writing, acting, design and creative talents, so too we could bring together finance, management and technical and creative skills in the interactive content industry. With the benefits of the English language and our indigenous talents Britain is well placed to lead the world. So we will now examine detailed measures to promote this.

Let me set out some of the measures that will assist this and growth in high technology industry.

First, to build on Britain’s genius for scientific invention by modernising our science and technology base, we are investing in an innovative 700 million pound public-private partnership with the Wellcome Trust and the awards that have already been made include, for example, support for an advanced technology institute in the University of Surrey.

Second, a new R&D tax credit will, from this April, mean that nearly a quarter of new investment in small and medium-sized business research and development is under-written even before a penny profit is made.

Third, we have created a new University Challenge Fund to help universities commercialise their inventions and help university based companies transform British inventions into British-made products. These are seed venture capital funds to allow universities to demonstrate the feasibility of research outputs with commercial potential.

Fourth, to help universities gain management expertise to commercialise inventions and to help transfer technology from the science lab to the market place, the Government is creating new Institutes of Enterprise. Indeed, we are keen that British universities build trans-Atlantic and trans-European alliances in research and commerce, such as we have initiated with the MIT/Cambridge link up.

There are a number of examples of existing and planned link-ups between UK and U.S. universities. For example, Warwick University with Carnegie-Mellon University in Pittsburgh; Heriot-Watt University is currently involved in discussions with Michigan concerning the development of a Scottish centre of engineering excellence at Rosyth; and Imperial College has formal links with both Georgia Tech and Emory University in Atlanta.

We recognise that UK universities are keen to establish such U.S. link-ups. And we are looking at how to promote these link ups. And while most government effort on science exploitation has in the past focussed on the academic “push”, we will consider how we can meet the challenge by encouraging an industry “pull” – examining the case for incentives for business/science collaboration with an emphasis, as in ‘smart’, on getting business to take a closer interest in exploitation opportunities in universities.

Fifth, I want new encouragement for the venture capital industry and especially for the start up and early stage ventures, where equity is more appropriate than bank loans, but where there is as yet insufficient encouragement to invest.

In advance of the Budget we will examine how we can build on the new network of Government- backed regionally based venture capital funds, nine in total, that are designed to encourage investment in early-stage, high technology companies, especially for amounts up to 500,000 pounds. The DTI published bidding guidance before Christmas and they have now received 21 intentions to bid. I would now urge potential investors to look seriously at investing in the regional venture capital funds.

We are also taking forward a UK High Technology Fund to help early-stage high-technology businesses – who have historically found it difficult to raise money for development. It will be a fund-of-funds, providing finance for investment in existing venture capital funds that specialise in the provision of equity-based finance for early stage high-technology firms. Funds are currently being raised from institutional investors and the fund manager is making significant progress towards meeting the target of 125 million pounds.

And sixth, tax reforms are designed to encourage investment in new companies. We have cut small business tax from 23p to 20p and introduced a new starting rate of tax for small companies of 10p in the pound. Every company making profits of up to 50,000 pounds will benefit.

Corporation Tax has been cut from 33 to 30 per cent, and to encourage and reward new business investment, we have cut the long-term rate of Capital Gains Tax from 40p to 10p. We have proposed a cut in the taper so that anyone investing for five years will pay only 10p and for three years only 22p.

We are also freeing high tech start-ups from unnecessary regulation to allow quicker access to finance. Our proposals could save months, in an area where this can make the difference between business failure and business success.

These new companies will also be able, from this April, to benefit from the Government’s Enterprise Management Incentive Scheme, tailor made for the new Internet and hi tech company. To recruit top managers for smaller high risk companies, we are offering tax relief for key employees on stock options worth up to 100,000 pounds.

Seventh, a new tax incentive to promote corporate venturing. Corporate venturing has been vital in Silicon Valley and elsewhere – providing small high tech firms with a strong capital base, better skills in marketing and management, and a greater market reach. So to help the large companies sponsor the development of the small, large companies that invest in growing companies for a specified period will receive a tax relief of 20 per cent, underwriting one fifth of their investment. This 100 million pound incentive can bring Britain additional investment of 500 million pounds every year.

The City of London is one of the largest financial centres in the world and this month alone a number of UK Internet start-ups have found financial backing. But we need to do more to build on the strengths of our capital markets. That is why we have encouraged Techmark, a new market within the London Stock Exchange for companies whose success depends on innovation, and the arrival of NASDAQ in Britain.

I am planning to host a major UK-U.S. conference later this year which will bring together leading U.S. & UK entrepreneurs and representatives of leading companies and capital providers to look at further ways we can develop a more entrepreneurial and enterprise focussed economy in the UK which can grasp the opportunities new technological developments can offer.

Businesses and individuals are responding to new technologies and the new challenges of the Internet age. Government must do the same.

Just as businesses have used the Internet to refocus their activities on the customer – supplying new services, when, where, and how the customer wants them – Government needs to do the same.

So we are restructuring our public services, from taxation to procurement, from health to our legal systems – organising Government in new, innovative and more flexible ways.

I can announce that we are undertaking a cross-cutting spending review to look at all aspects of Government and e-commerce. This will be headed by Andrew Smith and Patricia Hewitt and will ensure that as one element of our ambition to make the UK the best place in which to do e-commerce we make this the best e-government in the world.

The Internet presents a great opportunity to enhance the interaction between people and Government. As Bill Gates recently pointed out, this new technology is making Government more democratic.

The 2.5 billion pound Capital Modernisation Fund was set up to support capital investment to improve public services. Projects which this has funded include:

– 1.1 million pound for an integrated single electronic procurement system across government to support electronic tendering – this could save 10 million pound a year;

– 18 million pound for an IT job matching scheme – a sophisticated IT system to match job seekers to employers online;

– 30 million pound for cross-departmental IT linkages between the Criminal Justice Departments to promote joint working and reduce paper;

– 2.8 million pound for the Driving Standards Agency for hand held computers for driving examiners to record test results in the car and transmit results to allow the automated issue of driving licences; and

– 12 million pound to provide a global network of British information and services abroad – one-stop shop information kiosks built on interactive websites.

And we have introduced the new 230 million pound Invest to Save Budget – funding innovative ways of delivering services:

– testing the scope for delivering a range of employment service and benefits agency services through a call centre, accessible by telephone, fax, e-mail – or through an Internet website;

– two pilots testing the feasibility of allowing drivers to apply for vehicle tax discs by electronic means; and

– a pilot developing and testing a new IT system, providing detailed information on local authority enforcement functions through a single point of contact.

By 2002, our aim is that the public will on-line be able to:

– book driving and theory tests;

– look for work and be matched to jobs;

– submit self-assessment tax returns and get information and advice about benefits;

– apply for training loans and student support, all on-line.

Businesses will on-line be able to:

– complete VAT registrations and make VAT returns;

– submit PAYE returns and other forms;

– file returns at Companies House; and

– receive payments from Government for the supply of goods and services.

And today I can announce the discounts for the filing of tax returns over the Internet. We will offer discounts to encourage electronic filing and payment:

– in April 2000-2001, 10 pounds for each income tax self assessment return filed by taxpayers over the Internet.

– in April 2001-02, 50 pounds for either PAYE or VAT returns filed by small businesses over the Internet – 100 pounds for both PAYE and VAT;

We are also looking to modernise Government in a number of other ways. For example:

– liberalising Government data; and

– stretching targets for electronic procurement.

How Government, as the largest single agent in the economy, buys goods and services is a key driver of private sector behaviour. That is why we have set targets for Government procurement. And we are considering whether we can go further.

As an early step to make sure Government information is fully exploited, I can announce that the new national statistics website is to be launched in April – offering an extended range of data from across Government free of charge, demonstrating our commitment to ensure that data is widely available and easy to access.

And with our Invest to Save and Capital Modernisation Funds we are rapidly moving forward the e-government agenda. But I want to make sure that we give the best incentives and encouragement to departments and officials to exploit new technologies and the opportunities e-commerce presents to the full. So today, by ring-fencing some of the ISB and CMF monies explicitly for electronic Government ideas, I am launching an e-challenge fund. This will give incentives to Government departments and agencies to identify e-commerce opportunities in their areas.

2. The knowledge society

Now I turn to the knowledge society.

You cannot build a knowledge-driven economy without a knowledge-driven society. Unless everyone in it has knowledge of these technologies and access to them, no economy will have the size and sophistication of markets nor the quality of skills base needed to succeed in this digital age.

So, success in the Internet age depends upon an educated economy where the benefits flow not just to some but to all. And we must make sure that the opportunities of new technologies are shared in every community.

As a nation we could stand aside. We could have a society divided between information haves and information have nots. A society with a wired up superclass and an information underclass. An economy geared to the needs of some parts of Britain but not the whole of Britain.

Yet the blessings of new technology give us the means to break down the walls of division, and the barriers of isolation.

By putting the equipment, as well as the opportunity, directly into people’s hands, we can break down the barriers that prevent people realising their potential.

The extra 19 billion pound our country is now investing in education will help give everyone the opportunity to master the skills and technologies of the new information age.

Today we are pushing through huge educational reform. We are introducing early learning; a new focus on basic skills in primary schools; restructuring teachers’ pay to reward good performance; zero tolerance of failing schools; expansion of further and higher education through an extra 800,000 students by 2002.

When we came to power in 1997, around one in ten of our schools were linked to the Internet.

I can report to you that the extra investment this Government has made is already giving access to the Internet’s new world of knowledge to pupils in two in every three schools across Britain.

By 2002, there will be over 23,000 schools connected to the Internet, with training in computers open to 400,000 teachers. We are well on track to achieve this target with over 15,000 schools already on-line. Our IT strategy is allowing, for the first time, teachers and head teachers to share experience and good practice techniques over the web.

New help worth 20 million pound is making it possible for more teachers to have computers for home use.

But we must go further. This year we are doubling the money on IT in schools. By 2002 every school – rural and urban, rich and poor, north and south – all of our schools should be connected to that new world of knowledge. And parts of the national curriculum will be taught through software accessed on the Internet, motivating all pupils.

But we are doing far more than simply invest in schools and colleges.

In the last Budget, we allocated an additional half a billion pound to the establishment of new ICT learning centres and accompanying measures to widen use of ICT in homes, schools, business, the community.

Altogether, the Government is providing 1.7 billion pound for the national IT strategy – including support from the New Opportunities Fund. To 2001-2002, this comprises:

– over 650 million pound for schools in England, plus 62 million pound in Scotland (Wales and Northern Ireland not yet known);

– 230 million pound for teacher training in ICT;

– 20 million pound for librarian training in ICT;

– 50 million pound for digitisation of library content;

– 200 million pound for ICT infrastructure in libraries (contributing to the ICT learning centres);

– 470 million pound from the Capital Modernisation Fund for up to 1000 learning centres across the UK.

A whole new network of computer learning with one purpose only, that the whole of Britain is equipped for the information age.

So everyone will have the chance to succeed in the new economy. We are delivering individual learning accounts. A million men and women can receive 150 pounds to set up their own individual learning accounts – putting the power to plan and prepare for their own careers in their own hands. Next year any adult with an individual learning account will be able to claim a discount of 20 per cent, an additional grant of up to 100 pounds, on the cost of their learning.

For all adults signing up to improve on their basic computer literacy, there will be a discount of 80 per cent on course fees.

The Internet not only brings home the need for lifelong learning but also enables lifelong learning to be brought into every home.

The University for Industry will use the latest technology, including the Internet, to do in the 90s for lifelong learning what in the 70s the Open University did through TV for university learning – to bring education and training into the home and the workplace.

So with our new university, individual learning accounts, and with help with computers and computer literacy, the Government is embarked upon the biggest public education programme on offer in our history – opening up new opportunities for millions of people.

In Sweden the biggest single measure that increased the number of families with computers and the Internet was the tax incentive we are introducing in Britain.

To bring more computers into more British homes, we have made it possible for employees to be able to borrow computers from their companies as a tax free benefit.

And we now expect the number of people doing so to rise to 300,000 over the next two to three years.
But we need to do more.

In our poorest communities, the facts are that people are left out.

While three quarters in work use a computer, only one third out of work.

Of those working, half have a computer at home. Of those not working, only 21 per cent.

Of the lowest skilled and lowest income, only 18 per cent have a computer.

And only 3 per cent of the poorest households are on the Internet.

Only one fifth of those out of work have been on an open computer course.

So, in the Budget and beyond, to widen access to ICT and to ensure that there is no group of information have-nots, we will consider further action in the following areas.

First, we are making opportunities available for an extra 50,000 people to attend IT introductory learning courses. These will be available free – including to the unemployed, the low paid, the disabled and single parents. And we are considering how we can expand this.

Second, we will see how quickly we can expand to all areas of need computer learning centres

In the last Budget, we set a target for a national network of 1000 computer learning centres, one for every community in Britain – in schools, colleges, libraries, in Internet cafes and on the high street. We are well on course.

And here, new forms of providing access are being introduced – as libraries pioneer easier access – including drop-in centres in shopping locations.

Two sets of pilots have already started – one in September 1999, the other in January. And the first large tranche of centres will be announced in September, for which DfEE has just invited bids. New forms of provision are being tested, including a mobile ICT learning centre attached to a travelling circus around Birmingham. In Sheffield, the Citinet will link community-based ICT learning infrastructure and the University for Industry.

It is only right and fair that we start with the most deprived communities in the country, and make sure that they are equipped for the computer age.

Third, Learning Direct – the new University for Industry – will be the next stage in computer learning .

ICT learning centres will offer links into Learn Direct. And individual learners will be encouraged to move from taster and basic ICT courses to more advanced ICT and other courses offered by Learn Direct.

And fourth, people who need them should have computers available in their homes as well as at computer learning centres.

And we will do this by loans.

So, we are already pioneering a system under which poorer individuals – sometimes through local partnerships – will be able to lease computers and software in the new century in the same way local libraries have loaned books in the last century.

And in April we will be able to announce those partnerships across the country that will deliver the first tranche of our 100,000 computers on loan to poorer families.

And public provision will not only include hardware and software, but also connectivity and advanced online and offline learner support.

Taken together, these measures – new courses, new computers, new computer centres – will mean that every unemployed person will be offered a computer training course free of charge, and at a later stage the chance to graduate to the University for Industry courses.

And we will extend this beyond those who are registered as unemployed. Helping the single parent back to work by giving them skills – as well as information about work – is vital. The new computer courses put opportunity directly in their hands and will increase employability. So in addition to the registered unemployed, every single parent on benefit will be offered this course free of charge as part of the extension of opportunities to them.

We believe that in total one million can benefit by the end of 2002

So, with our new University for Industry providing education in people’s homes, with one million individual learning accounts that can finance computer courses, with help to loan computers and use them in computer learning centres, Britain is now embarking upon the biggest public education programme on offer in our history – opening up new opportunities for millions of people.

Imagine it, every child in every school in every community given access through computers and the Internet to the greatest libraries and museums in the world.

Imagine it, the 45 year old redundant worker in my part of the world – who has the courage and opportunity to go on an IT course and who acquires new skills and gets a new job.

Imagine it, the disabled person, house-bound, but now free – able to work from home through their personal computer.

All based on the understanding that in the new economy the more individual talent we nurture the more economic growth and prosperity we will achieve.

Looking to the future

So we are determined to catch up and lead.

That is why I have today set out policies to secure rapid development of broadband access, to broaden our commitment to ICT in education, to bridge the digital divide, and to encourage the development of new high tech companies specialising in the Internet measures that could help Britain lead the way.

And I believe that over time we can, if we achieve these changes, catch up and then surpass the U.S in these key areas.

We can be optimistic about Britain’s future because, building on British qualities that value work and self improvement, we have one of the strongest national commitments to education and investment in the most modern educational technology.

We can be optimistic because within one of the largest marketplaces anywhere – the single market in Europe – we have a great opportunity for Britain to do business and to make it a springboard into the rest of the world.

We can be optimistic because, through our pioneering and innovative private-public partnership, we can release new energy to build both a knowledge economy and a knowledge society.

We can be optimistic because we have the indigenous talent in all the relevant industries to make Britain the centre for a new Hollywood of the creative interactive content industry.

We can be optimistic because we are now ready to lead the way in bridging the digital divide, leaving no one, no community, no area out.

In short, we can be optimistic because we are determined to build from lasting British values and a commitment to opportunity for all the efficient economy and fair society from which future success will be best guaranteed.

British values and the British people ready to rise to and surmount the newest challenges ahead.

The speech made by Gordon Brown, the then Chancellor of the Exchequer, on 29 February 2000.

It is a pleasure to be here today at Newham College, a college which is doing so much to make a reality of lifelong learning for so many people. And to be here in Green Street.

Green Street sums up much of what we are aiming to achieve. Asian entrepreneurs have transformed this street from a drab and declining inner city shopping street to what Stephen and Tony tell me is the most successful Asian shopping street in the country.

I can see the improvements since I was last here six years ago. In partnership with the local council, the environment is being improved and parking problems ironed out. Support for new businesses is being provided in partnership with Newham College here at Barclay Hall. And the result is new jobs for people in Newham.

Later this morning I will visit the site of the new international exhibition centre in the Royal Docks. Eventually, 14,000 people will work there. I am going to see how a partnership between the developers, the local council and the local community is making sure people from Newham can get access to those jobs ­ both in construction and later this year when the centre opens.

Unemployment in Newham is today below 10,000 for the first time in 20 years, but there is more to do. We are determined to make sure that everyone who is able to work has the chance to do so. This is what next month’s Budget will be about.

Modern Budgets are less about how within a sheltered national economy we have an annual dividing up of the national cake, but about how in a harshly competitive global economy we can secure the long-term expansion of the national wealth.

The Britain that will succeed in the global economy will be the Britain that opens up the opportunity for employment and enterprise to all.

Our objective is therefore that no one is left out on the margins, no one excluded from the mainstream of economic prosperity.

And this is the time – when the economy is growing – to bring prosperity to those places and peoples the economy has too often and for too long forgotten.

This is the time to bring jobs and enterprise to those areas of the country that have not yet fully participated in the economic recovery.

Now that, under David Blunkett’s leadership at the Department for Education and Employment, employment has grown by over 800,000 since the Election. And now that more people are in work than ever before, with unemployment at its lowest level in the last twenty years, this is indeed the time to concentrate on encouraging the discouraged back to work.

The problem

I understand that the story of economic improvement is not a story of improvement for everyone, that there are still too many people left out of the British success. And that while more people are in work than ever before, there are still pockets of high unemployment in every region of the country.

I know we must and can do better. I know that for our long term success Britain needs an economy that must work not just for some people some of the time, but work for all of the people all of the time.

And I believe we have an obligation to everyone willing to work and seize opportunity – and to all those left out. That there cannot be real prosperity if thousands are left behind, or real progress if the progress is only open to some. The fact is that Britain is strongest when we all move forward as one, that the best form of economic advance is when all communities advance together.

So our aim must be to build a working economy in every community of the country.

That is why we are publishing today our report on vacancies and employment with proposed Budget measures we are considering so that we can achieve, for every community of Britain, employment opportunity for all.

That is why too, in advance of the Budget, we are launching our enterprise tour round the country – starting today here in Newham – to listen to the voices of people in the regions and communities, to share your hopes, to understand your concerns, to take your advice on the shape of our employment and enterprise initiatives for the years to come.

The opportunity

By toughness in pursuing first stability and steady growth, our policies are delivering new opportunities throughout Britain.

Vacancies are at record levels – around one million vacancies. And whilst the recovery of the late 1980s was largely confined to the south of England, this time, every region in Britain has seen sharply falling unemployment and rising levels of vacancies.

Indeed, unemployment has fallen fastest, and vacancies have risen fastest, in those regions that were hit the hardest in the 1980s.

Since 1990 unemployment has fallen by forty per cent in the north west, and a third in the north east. While vacancies in both areas have risen faster than in the south east. And the improvement in opportunities for the unemployed has been greatest in the areas previously hit hardest. In the early 1990s around thirty unemployed chased every single job centre vacancy in the north east, but now it’s under four – the same as the national average.

Enterprise and jobs for all

In tackling the employment and enterprise problem in the high unemployment areas, we will not 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.

Our initiative is not the old ways of backing simply zones of enterprise and forgetting about the people – it is about backing people of enterprise

We believe that in the new economy we will succeed in creating an economy with employment opportunity for all when we create an economy with enterprise open to all.

I want to see not only the work ethic reinvigorated in every community of Britain but a dynamic business culture which encourages enterprise open to all.

In our inner cities and old industrial areas we need not more benefit offices but more businesses.

And in our new approach to regeneration which is about building on the potential strengths of local people – an approach that is about encouraging new dynamism, not the old dependency, backing success, not the old subsidies, there are three pillars:

first, in every area we want to build an enterprise culture not for the few but open to all;

second, in the high unemployment areas, we want to encourage private investment flows and new businesses;

third, as we create more job opportunities, we want to tackle all the barriers that people face to getting into work.

Let me set out our policies in these key areas.

First, building an enterprise culture open to all

In the past enterprise was open to some but all too often it was a closed circle which excluded too many.

In the Britain I want – a Britain where there is opportunity for all, fairness to all, and responsibility accepted by all – we need enterprise open to all.

How much stronger our economy and our society will be if we see released all the dynamism, creativity and potential of all our people.

So we are introducing measures to boost enterprise skills from school to adulthood.

Let me tell you how this and many other areas will benefit:

• we aim to double to 200,000 the number of pupils benefiting from enterprise courses in our schools;
• we are improving the national network which introduces schools to businesses and has them working together. We will link all 30,000 schools to the world of business;
• – and we are trying to ensure pupils and teachers are given the opportunity for work experience and placements. Already six hundred thousand 14 to 16 year olds are benefiting from work experience and thirty thousand teachers are in work placements.
• And we are now working with business and the world of education to build on this, improving the quality of placements and experience.

In addition, we are launching this spring a national campaign with the message that enterprise is open to all. Our business leaders – including Alan Sugar and Richard Branson – will run a series of enterprise events in schools and colleges. And I am meeting business leaders next week to help plan a campaign that will include our high unemployment areas.

New businesses need advice and mentoring. So working with the Princes Trust and others, we are building a national network of mentors to help start businesses in the poorest areas.

And we are offering new management scholarships – aimed specifically at entrepreneurs from high unemployment areas. From next year, these will give top class business training to our budding entrepreneurs. Three pilot scholarships in London, Manchester and Cornwall are being launched later this year.

Second, encouraging private investment flows to the high unemployment areas

Investment in enterprise is the key to delivering jobs and opportunity for all.

But many enterprises in our least well off communities face special problems in obtaining access to support, advice and finance.

Through our national strategy for neighbourhood renewal and our regeneration programmes, high unemployment communities will have extra support to allow enterprise to flourish.

But we need to do more.

Inner cities and established industrial areas 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 we want to put in place the right incentive structure to stimulate business-led growth in our inner cities and estates and encourage much bigger flows of private investment.

Let me explain how our new Phoenix Fund will be a catalyst for harnessing the
enterprise that is present – but often hidden – in our poorest communities:

• it will fund a new network of 1000 volunteer business mentors, to be up and running by April 2001. These mentors will be people with practical business experience. If you’re just starting out, they’ll help you avoid the basic mistakes that mean so many businesses fail.
• it will fund the development of more ‘incubators’ – workspace where small businesses get accommodation and practical help from experienced managers. Incubators give new businesses the right environment – space to rent, hands-on advice, and a ready-made network of firms also trying to succeed.
• we know that there are other gaps in the finance markets for the poorest communities. So new loan funds will help businesses get the finance they need. And help that will be linked to the training and support, that is often as important as the finance.

I can say today that our new Phoenix Fund will start supporting these new loan funds from the Spring.

And we will work with the Social Investment Task Force, reporting in the Autumn, to look at the next steps in this agenda.

This will include considering:

• tax incentives for investing in community development projects, like incubators, loan funds, and social enterprises;
• for the long term, constituting a permanent investment fund with a continuing remit to help fund a regular wave of new projects.

We are also looking at a new venture capital framework. Our new regional venture capital funds will boost investment in early stage venture capital. I want to see more resources in venture capital funds targeted at our high unemployment areas. The new Social Investment Task Force we have just set up will look into this.

We plan to learn from our experience with these initiatives – and from experience in the US – and to build on what we learn. In particular, we are looking at America’s new private investment companies, which are designed to stimulate major private investment in America’s most distressed areas. And we are interested in developing the potential of our own community finance intermediaries. Monitoring banks’ activities in disadvantaged areas is important also to ensuring that services are available to all.

In July, Stephen Byers and I will be hosting a UK/US conference with Ambassador Lader. After the conference, we will take teams of US business people round some of our most disadvantaged areas, looking at how they can reach their full potential. I want to see us firms over here investing in British inner cities, in the same way they invest in their own inner cities.

But if we are to encourage more inner city entrepreneurs, we also need to get better help to unemployed people wanting to start their own business.

We want to encourage those who start with nothing – and who, in the past, thought they could never reach higher or rise far – and tell them that there is not only a chance to do better, but no limit on their ambitions for themselves and their children.

So I can say that Tessa Jowell our Employment Minister plans that the New Deal will offer help for long term unemployed to become self-employed and to start a business – for the over-50s, up to 3,000 pounds during the first year in business and in work.

So our aim is to make the market more likely to work in places where it wouldn’t otherwise work. To build a network of relationships between the high unemployment areas and the private sector.

Third, tackling the barriers that people face to getting into work

The challenge is not only to promote enterprise and jobs in the poorest areas, but also to tackle the barriers that people face getting into work.

Not only to get jobs to people, but to ensure that people can get into the available jobs.

Today’s Government Report on Jobs has revealed the barriers in the poorest areas – including inadequate matching between employers and jobless people; worries about making the transition from benefits to work; a lack of skills; and racial discrimination.

And as our report today shows – these barriers are preventing people in the high unemployment areas taking the jobs that exist nearby.

In almost every case, the areas of highest unemployment sit alongside, and within travelling distance of, areas where vacancies are going unfilled.

For example in Haringey where the unemployment rate of over 13 per cent is the worst in the country there are over 10,000 unemployed – but across London, with an unemployment rate of 4.5 per cent, there are over 30,000 vacancies unfilled. Knowsley in Liverpool, with an unemployment rate of 12.1 per cent, has over 5,800 unemployed but there are over 10,800 vacancies within travelling distance.

So we are determined to surmount these obstacles to jobs through policies to bridge the skills gap, to match jobs without workers to the workers without jobs, to make work pay, and to tackle discrimination.

Let me set out our policies in each area.

First, to bridge the skills gap, we need to equip the unemployed with all the skills they need for all the jobs that exist.

The new employment zones which David Blunkett is pioneering are targeted on the areas of highest unemployment.

Led by the private sector – groups like Reed in Partnership and Pertemps – or by partnerships between the private, voluntary and public sectors, they will provide innovative tailor-made support and advice for the unemployed to get back into work. These could include:

• providing individually tailored work and training places;
• innovative ways to help people get work related qualifications;
• assistance to the unemployed to start their own businesses – including training, grants for equipment and mentoring.

And they will use new methods of funding, which increase the incentive for providers to get people into jobs.

Over 60,000 employers in Britain have signed up to participate in the New Deal. In the last two years, long term youth unemployment has been cut by three quarters under the Welfare to Work programme that demands responsibility as well as gives opportunity.

The New Deal, first introduced for the under-25s, will be extended to all those over- 25 in every part of the country, building on the principles of the New Deal for 18-24s.

In addition to the self employment option I have mentioned, options will include:

• the offer of a job with a private sector employer;
• work based retraining;
• or college training.

And there are new choices for lone parents to get new skills, go to college and go to work.

From now on, lone parents will not only be able to train for jobs while receiving income support, but they will also benefit from college-based childcare places. All lone parents with children above three will receive notice of these new choices.

Second, we are doing more to match the jobs without workers to the workers without jobs, including:

• creating an Internet-based jobs and learning bank, putting information about jobs, job seekers, careers and learning opportunities on-line;
• expanding the network of touch-screen jobpoints in Job Centres and other locations – so that jobseekers can search not only all job vacancies notified to the employment service, but in addition job vacancies carried by private agencies and newspapers;
• setting up a national network of call-centres – providing a single national telephone number for employers to register vacancies and jobseekers to get information about the jobs on offer. In addition, call-centres will telephone jobseekers to put them in contact with employers who have suitable vacancies; and
• developing links with the BBC and other potential partners to harness the potential of interactive television to link employers and jobseekers.

And, as we extend opportunities to those who are out of work, we will extend the responsibility to take up the work on offer. The informal or hidden economy is now draining billions of pounds in fraudulent benefit claims and unpaid taxes.

This loss of revenues, this incidence of fraud, this waste of resources, cannot be allowed to continue and especially when there are jobs that benefit claimants could take. In the coming weeks, Lord Grabiner QC will recommend his plan of action.

I say to the unemployed who can work: we will meet our responsibility to ensure there are job opportunities and the chance to learn new skills. You must now meet your responsibility – to earn a wage.

And in the Budget, working with David Blunkett, I will outline proposals for action teams that will work in high unemployment areas to:

• identify suitable vacancies within travelling distance of pockets of high unemployment;
• match these vacancies to long term unemployed people within these areas;
• tackle any specific barriers which stop people taking these vacancies.

Over the coming weeks, we will also examine the other barriers to getting into work that people face – including transport costs in areas of high unemployment and the obstacles sometimes caused by a gap between coming off benefits and getting paid for the first time.

Third, to get more people into jobs and to overcome worries about making the transition from benefits to work, we must ensure that work pays more than benefits.

When this Government came to power, with no minimum wage in place and the tax and benefits system unreformed, many of those without work faced an unemployment trap, where work paid less than benefits, and the low-paid in work faced a poverty trap which meant that they faced marginal tax and benefit rates of 80, 90 or even over 100 per cent.

To make work pay we have introduced the national minimum wage. To reward work and encourage job creation we have introduced the new 10p starting rate of tax and cut the basic rate of income tax from April.

The biggest reform of all – the working families tax credit – means that every working family with someone working full-time is guaranteed a minimum income of 200 pounds a week, more than 10,000 pounds a year.

As well as making this significant improvement in the rewards from work, the working families tax credit helps to overcome the biggest barrier preventing a return to work for many mothers – lack of access to high-quality, affordable childcare.

While the childcare disregard in family credit provided no help to parents on the lowest incomes, the new childcare tax credit provides maximum help to lower-paid parents – up to 70 pounds of help for families with one child and up to 105 pounds for families with two or more children in qualifying childcare.

And for lone parents, the two-week benefit run-on, together with the extended payments scheme for housing benefit, means they could gain 300-400 pound on moving into work.

Fourth, we are tackling racial discrimination. We will ensure there is no place for discrimination – that opportunity is open to all.

Under the New Deal for 18-24s, partnerships must ensure equal opportunities for people of ethnic minority backgrounds.

We are asking the equality commissions, working with employers and other organisations, to put together an effective package of support and advice for businesses.

And the public sector must take a lead – by implementing the commitments in the Modernising Government White Paper to set targets for fair representation for people of ethnic minority backgrounds and by putting in place the policies to ensure these targets are met.

Leading in the knowledge economy

But to meet our ambition of enterprise and employment opportunity for all in today’s global economy – where new information technologies are transforming the way we communicate, educate, buy and sell – we must ensure that the opportunities of the new technologies are open to all.

You cannot build a knowledge-driven economy without a knowledge-driven society. Unless everyone in it has knowledge of these technologies and access to them, no economy will have the size and sophistication of markets nor the quality of skills base needed to succeed in this digital age.

So success in the Internet age depends upon an educated economy where the benefits flow not just to some but to all. And we must make sure that the opportunities of new technologies are shared in every community.

As a nation we could stand aside. We could have a society divided between information haves and information have nots. A society with a wired up superclass and an information underclass. An economy geared to the needs of some parts of Britain but not the whole of Britain.

Yet the blessings of new technology give us the means to break down the walls of division, and the barriers of isolation.

By putting the equipment, as well as the opportunity, directly into people’s hands, we can break down the barriers that prevent people realising their potential.

In schools, the extra investment this Government has made is already giving access to the Internet’s new world of knowledge to pupils in two in every three schools across Britain. By 2002 every school – rural and urban, rich and poor, north and south – all of our schools should be connected to that new world of knowledge.

But we are doing far more than simply invest in schools and colleges. We are establishing 1000 new information technology learning centres – in schools, colleges, libraries, in Internet cafes and on the high street.

And we are introducing measures to widen the use of information technology in homes, schools, business, the community – including new opportunities for people to attend free IT introductory learning courses. And making it possible for people to lease computers and software in the new century in the same way local libraries have loaned books in the last century.

Conclusion

In the new Britain we want more enterprise, more investment, better education and preparation for the future in every community. I want Britain to be a world leader in enterprise – and the opportunities and benefits of enterprise to be shared by all regions and all people.

And this is right for business. Business now needs new workers and the workers are right here in the areas left behind. There are new markets here too.

So this is the time to say to every corporate leader in our country, take a look at investing in our high unemployment areas. They offer business new choices, new recruits, and new markets. It is good for business and for growth.

I believe we can work together – Government, business leaders, and local communities – to deliver our aim of enterprise and employment opportunity open to all in every region, every town, every community in Britain.