It’s a pleasure to be here at the EEF today, and to be addressing you, the people who’ve designed, built, and welded together the British recovery. I want to begin by thanking EEF for inviting me to speak.
You are tireless advocates for UK manufacturing. Even though no-one knows what your initials stand for, we all know what you stand for: supporting the manufacturing businesses that are crucial for the future of our economy.
The people in this room, you enrich our society by exporting, by investing, by creating jobs.
Your success is mission critical to our vision…
Of a country that pays its way…
- that is more balanced, by sector, by geography…
- here we strive to be the best place in the world to start and grow a business…
- in so doing become the most prosperous major nation upon this earth…
I am proud to be part of a government with this long-term economic plan at its heart, which strains day and night to champion your interests. We will back you, not just with rhetoric - though we will unashamedly do that. We will back you with action.
You told us you needed a more balanced economy, with more growth outside the South East.
We’ve listened and we’re creating the Northern Powerhouse, with jobs growing faster in the North East and North West than in London.
You told us you needed action on energy costs.
We’ve listened and introduced a £7 billion package of support, including compensation for energy-intensive industries to stop industry simply moving overseas.
You told us you needed more high quality, employer-led apprenticeships.
We’ve asked leading companies in aerospace, automotive, life sciences and food, to rewrite the apprentice rulebook. Already young people are starting on these new trailblazer Apprenticeships, rigorous and responsive to employers’ needs.
You told us you needed a modern industrial strategy: custom-made policy support for all industries which require government to take a long-term view.
From the new sector councils, to our Catapult innovation centres, to funding partnerships for the latest technology – in partnership, we are delivering.
And today we publish our Manufacturing Supply Chain Action Plan which sets out our next steps to strengthen supply chains further.
We believe in manufacturing, not because we see you as producers rather than predators, not because you’re a handy source of tax, but because we believe in British business.
I don’t care whether you’re a FTSE giant, a mid-cap mittelstand, or a micro-business you run off your kitchen table, whether you’re based in London or Londonderry, whether you work at a desk, a factory, or drive a white van.
What matters to me - what matters to us - is that you provide things other people want to buy. You solve other peoples’ problems.
And my first question is ‘what can we do to make it easier to help you to do business?’
In some areas this means government doing less. Less taxing, less regulating, less spending the country can’t afford.
In this parliament we’ve delivered the most competitive corporation tax in the G20, doubled the annual investment allowance, and taken 400,000 small businesses out of employer NICs altogether with our Employment Allowance.
We’ve taken £10 billion off the cost of domestic red tape and are on track to be the first Government in modern times to reduce the burden of regulation.
I want to thank the EEF in particular for your strong support for our Focus on Enforcement programme in which you tell us how we can improve the way regulations are inforced.
Our action on red tape has included cutting employment tribunals by 80 percent, freeing thousands of firms from unnecessary inspections. It’s part of a wider drive to remove unnecessary burdens.
We’ve even removed the age restrictions on the sale chocolate liqueurs.
Because we all know the sad sight of a group of teenagers, sat on a park bench, off their heads on a box of Thorntons.
Tackling regulatory burdens will also form part of our plans to reform Europe, and address uncertainty over Britain’s unhappy relationship with Europe in the next parliament, once and for all.
And we’ve kept interest rates low and our economy safe by not deviating from our deficit reduction plan. I want to thank you, very personally, for the support you gave us when siren voices insisted we abandon course. You stuck with us and we saw it turn out right.
And you know it’s not enough just to stop at that. It’s not just about government doing less.
There are some things government needs to do more of: on skills, finance, infrastructure and science.
So we are unabashedly interventionist.
Working alongside business and using the best independent research, we have identified eight great technologies where the UK has the capability to become a world leader: from robotics, to regenerative medicine.
We are backing them and we are doing so alongside private sector investment.
For years Britain had a reputation as a place where ideas were born, but where commercial deployment happened elsewhere. We are ending that, supporting great ideas all the way from the lab to the marketplace.
On finance, we’ve introduced tough new regulations for the City, to clear up the mess from the crash.
And we’ve established the British Business Bank, the first of its kind in the UK, with a mandate to unlock new forms of business finance, including new challenger banks.
The Business Bank also manages our successful Start-Up Loan programme, which has helped start 25,000 small businesses so far.
On skills we have put in place radical long-term reforms.
When we came into government, so-called ‘programme-led’ apprenticeships meant that some apprentices were not required to spend any time in the workplace at all.
We’ve changed the rules so that every apprenticeship must be a paid job, in a real workplace, lasting at least 12 months, and with high quality off-the-job training.
Some predicted that tackling quality in this way would lead to a fall in the quantity of apprentices.
In fact, the number of people doing an apprenticeship has doubled since the election. We have already seen the two millionth Apprentice in this parliament.
I’m proud of this rejuvenation of an ancient concept - in the next parliament we have committed to three million high quality, employer-led Apprentices.
This pro-youth, pro-opportunity agenda is working. Youth unemployment is falling at record rates.
Apprenticeships are a partnership between government and business for the betterment of both the economy and society. In that sense they are a metaphor for our wider approach.
Because you are the ultimate source of society’s prosperity, any sensible Government has an obligation to support you to succeed. After all, business, done right is a force for good in society. But businesses in turn have obligations to the free enterprise society of which they are a part.
Markets are free and competitive only in a strong framework - of law and reasonable behaviour.
It’s a reciprocal arrangement, something for something.
Here’s the way I see this deal:
- we’ll keep taxes low, but we expect them to be paid in full
- we’ll keep Whitehall off your back, but we expect you to pay your suppliers on time
- when the economy’s in a slump we’ll understand if you can’t manage a pay-rise, but when it’s growing that’s exactly what we want to see
I have huge faith in that partnership because of what it has achieved so far:
- three quarters of a million new businesses, since 2010
- 1.8 million more people in work
- 2 million apprenticeships
- the fastest growth in the G7
- world number one for research citations
- record numbers going to university
- record numbers from the poorest backgrounds going to university
- record numbers of women, young people, older people and people from ethnic minorities all starting their own business
- business investment up
- exports to China up
- wages rising
- energy bills falling
- the deficit halved
Yes there is more to do. But. That is what is at risk if we were to abandon our long-term economic plan.
And I want to talk very frankly for a second about that risk.I thought about whether to do so in this speech.
It would be better if I didn’t have to. But I come from a small business background. I know from personal experience what it’s like when the economy goes wrong and it affects your business and your family.
And now, I’m privileged to be in a position to try to stop it happening to others.
We will to stand up for small business on late payment. We’ve already legislated to require large companies to publish their payment terms. This transparency will allow us to highlight the best, and also admonish the worst sort of behaviour. It will help us make prompt payment a boardroom subject, as it needs to be.
We must change UK payment culture. Unacceptable payment terms must stop. Why should long payment terms be deemed acceptable business practice here when they are not in many of our major competitors, like Germany?
From this week, all public sector contracts must by law pay on 30 days, and the 30 day terms must be cascaded down the supply chain.
Today I can announce we will go further.
I don’t want to legislate to interfere with a contract law that is used throughout the world. But I am not prepared to take further legislation off the table if payment culture doesn’t improve.
We are rewriting the Prompt Payment Code.
Now it will say that 30 day payment terms are to be the norm of acceptable behaviour in the UK, with 60 days as the maximum in all but exceptional circumstances. This revised Code will have teeth, with a new enforcement body which will be able to eject companies that fail to live up to the new standards, and potentially with the power to levy fines.
I have written to major firms to explain that new transparency measures will make a company’s payment terms a reputational issue. Now I expect all major UK companies to sign up to the tougher new Prompt Payment Code and tackle this problem once and for all.
For ultimately, a contract law people can trust, where agreements signed up to are reasonable, and are then followed, is good for businesses large and small.
We expect the very best of British business because of working with you and believing in you, that is what I see.
Over these past five years we’ve come a long way. Our country is heading in the right direction, thanks to that partnership with you.
Together we will lay the roads and rail our country needs to grow, we will equip our young people with the skills they need to succeed, and we will rebalance the economy so that it is divided not by wealth but by economic specialism.
And while the right policies are important, just as important is a government which understands that business is the ultimate source of our wealth, security and freedom as a nation. That without the entrepreneurial drive to solve other peoples’ problems, and be rewarded for doing so, without the constant transfer of ideas from drawing board, to assembly line, to catalogue and shop window, nothing else is possible.
We understand, and we know that with right support from us, you can make Britain the most prosperous major economy in the world. And in reaching that goal we will always be by your side.