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.