This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
(Transcript of the speech, exactly as it was delivered)
Thank you for that welcome. Thank you very much, ladies and gentlemen, it is absolutely great to be here at this International Festival for Business. I’ve been associated with this right from the start and I think it’s a great idea and full credit to everyone in Liverpool and Merseyside who has been involved in bringing this together.
This is the biggest showcase of British business since 1951. It is a shop window for enterprise, for innovation, for creativity. And I’d like to go out into the exhibition hall as I have been told about some of the things that I am going to see. I am going to see GPS shoes that could walk you home. I am going to see floors that generate energy from footsteps. There is a high speed bicycle that Liverpool University claims can reach 90mph. There is a motorbike that runs on water, a golf trolley that caddies itself. There is a robotic scooter with folding wheels.
Now what I want to say today is I believe we are on our way back from the Great Recession. But there are 3 things I want to see. I want to see a full British economic revival, I want to see a rebalanced economy and I want to see a recovery that benefits every part of the country. And I want to say why I think you cannot just sit back and hope that will happen: you have to work hard to make it happen. None of these things – getting our economy moving again, rebalancing our economy, making sure every region of our country benefits – none of these things happens by accident. They happen because we put in place the right policies, the right plans and the right approach to make it happen.
First of all, this British economic revival. I believe we are now seeing this – we are now the fastest growing major economy in the west. We have more people in work than ever before in our country, more women in work than ever before in our country. The European Council was interrupted the other day when a Prime Minister from another country said before we get on to discussing who should be running the European Commission and who should be running the European Council, I want to know why Britain is growing at 3% but the Eurozone is only growing at 0.2%.
We are now forging ahead as an economy. We have a higher employment rate than America. We’ve seen a great record of job creation. Since I walked into Number 10 Downing Street, we’ve seen 1.7 million new private sector jobs. Some people said that these private sector jobs will never make up for the loss of state sector jobs as you make reductions in public spending. But in fact, there are 1.5 million more people in work overall.
We are the top destination for inward investment. The Chinese are investing in our nuclear power. Malaysia is helping to rebuild our cities. The Indians are investing in our car industry. Dubai are helping to rebuild some of our port infrastructure. We are not embarrassed about international investment into Britain; we are proud of that investment. And I think it should be one of the calling cards for Britain around the world is that we are one of the most open economies for people to invest in.
We are seeing a good trend in terms of re shoring and relocation because it pays to stay in the UK. We have got EE bringing back call centres from the Philippines, Hornby are coming back from India, Aston Martin from China. It’s the start of a trend but one that I believe we should encourage.
So whether you’re looking at employment; whether you’re looking at investment; whether you’re looking at new business creation; whether you are looking at exports which are up by 100% to China, for business creation which is at the fastest rate in our history, when you look at all of those things it’s clear that the economic revival is underway.
And as I said, the second thing is just as crucial. How can we make sure this is a rebalanced economy? Our economy became too reliant on financial services. Financial services is a great industry – don’t get me wrong – and the City of London is an enormous national asset for the United Kingdom. And when I think of financial services, I don’t just think of the jobs in London, I think of the jobs in Birmingham, in Glasgow, in Edinburgh, here in Liverpool. But financial services is not enough for an economy and we’ve been very clear in this government that we want to see Britain invent more things, design more things, manufacture more things and export more things and the signs are again that that is happening.
Made in Britain is once again a badge of pride. We are a net exporter of cars for the first time since the 1970s. Manufacturing is growing at its fastest level for 7 years. Industries like aerospace are getting proper attention from the government and are really forging ahead whether that is Airbus nearby in North Wales, or whether that’s Rolls Royce in Derby. And we’ve got engineering companies – Atkins, AMEC, just starting with the As – that I think are really leading the way in terms of construction around the world. So the rebalancing is happening. But it needs to go further, it needs to go faster.
The third point I made is a recovery for all, for every part of the United Kingdom. In the 5 years before I became Prime Minister, for every 10 jobs created in London and the South East we were creating one in the North. That is not acceptable. That is bad for business, bad for the North West. So our long term plan aims for the whole country to benefit from this recovery.
So here in Liverpool we have seen the claimant count for employment go down 23% since the election. Apprenticeship starts are up by three-quarters since 2010 and we can see some really important signature investments taking place. I have just come from the Port of Liverpool where a new dock is being constructed in order to take the biggest ships in the world that now go through the widened Panama Canal. So this government can make the proud boast, as this dock is built and as the reclaimed land is being put in place, we’re actually making Liverpool bigger.
But this is a really good example of how you need active industrial policy to help rebalance the economy. Because of course today so many of the big container ships come into the southern ports – Southampton, Tilbury etc – and yet so much of that cargo and freight is destined for the North; whereas actually this new terminal in Liverpool will make sure all of that can come directly to the North of England. It is an active act of rebalancing that I believe will make a real difference.
But the real point I want to make is this, these things are not happening by accident. The British revival is not an accident. Economies don’t just automatically snap back after a difficult recession. We chose to have a clear plan – getting on top of the deficit, creating jobs, cutting taxes, focusing on schools and skills, making sure our welfare system worked properly and rewarded work.
Those things and sticking to those things have been a key part of making sure this economic revival has happened. I think the deficit particularly important because if you want an economic revival you have got to create the conditions where interest rates can remain low. So introducing that plan, sticking to that plan and continuing it through to its conclusion is absolutely vital to continue to secure the revival.
The rebalancing hasn’t happened by accident. It was a difficult choice to cut corporation tax and having to make difficult fiscal decisions, but it was the right choice because it means you can go around the world saying to businesses, ‘Come and invest in Britain, it is a good place to invest, to grow and to make profits.’
Making sure we kept our science budget: an absolutely key decision. When we’re making difficult decisions on other budgets, saying that actually Britain’s future lies in hi tech, lies in science, was a vital decision. Supporting exports: I have taken trade missions to every one of the G20 countries apart from Argentina. I’m sure I’ll make it there after the World Cup perhaps; who knows? But really prioritising exports – not just for big businesses but also getting SMEs to export – is absolutely crucial.
My point is if we want to have an economy for every part of the country, a recovery for every part of the country, the infrastructure decisions we make – like the second Mersey Bridge, like electrifying the Cross Pennine line, like HS2 –these are vital long term decisions that will help to make sure every part of the country can recover.
And it is actually worth making the point because sometimes people assume that everything is happening faster and further in the South East than the rest of the country. That is not the case. Employment is rising fastest, not in the South East but in the North East. Exports are growing fastest not from London, but actually from the West Midlands. The highest number of apprenticeship starts is not in London or the South East, it’s right here in the North West.
So we are determined to continue with the plan that delivers these 3 vital things. A full scale British revival; a rebalancing of the economy between financial services and the other vital sectors; and a recovery that is for all. And I do not buy the pessimistic view that in a modern globalised economy, the good jobs for hard working people are going to get hollowed out. I think if you invest in science and you take long term decisions, if you build the right infrastructure and you train up your workforce for the future, there is no reason that your country – your economy – can’t be a success story that is shared for all your people.
But that is the challenge. I believe today; to understand you have to be pro business, pro enterprise, pro open-market, keep the taxes down – absolutely do those things, but then you need a rolled up – a sleeves rolled up active industrial strategy to make sure you are the winner in the industries that count and in the industries of the future. That is what I’m committed to doing.
I am absolutely delighted to be here in Liverpool today. This Festival for Business is a key part of what we’re trying to do. I’d like to thank everyone who is coming, who is exhibiting; who is going to bring money and investment to this fabulous region of our country and to this, the iconic city of Liverpool. Thank you.
Prime Minister, we’ve heard about engineering skills – the need for engineering skills this morning. I just wanted to ask about the creative industries. It seems to me that they’re moving up the political agenda quite fast, not least because they’re growing more rapidly than the economy in general.
As we work towards more positive industrial strategies [inaudible] industries, can we make sure that we recognise the role of arts and cultural organisations – this is an impartial question – the role of arts and cultural organisations as vital incubators of creative talent which will [inaudible] in the future. Thank you.
I think we’re looking at where is Britain going to be a success. Where are we going to generate jobs and wealth in the future? We’ve made a list of businesses and industries; life sciences with our university and scientific heritage; environmental sciences with all the advantages – natural advantages we’ve got, but also technological breakthroughs made here.
Obviously I talked about aerospace with the history and tradition here and the scientific endeavour. But creative industries would be absolutely up there because we have one of the great advantages which is the English language. We have the theatrical tradition. I have been known to watch a whole box set of an American drama and it seems to be an employment programme for brilliant English actors and actresses. And long may it continue.
But I think there are 2 serious points here. One is when we want to promote British industry, Britain as an investment destination, we should use the creative industries for all they’re worth. I’ll never forget taking the biggest ever business delegation to China. We had a lunch for 1,000 businesses in a huge hall in Shanghai and at the end we got Joey from War Horse – the actual horse – to come galloping into that arena.
And you know there was nothing better we could have done to really strike Chinese businessmen and women with this incredible impression of what Britain can deliver – so I absolutely should always make sure that when we’re doing trade and business missions that we include cultural institutions and creative industries.
Yes, let’s make sure that people come and make movies here by having the film tax credit. Yes, let’s make sure we attract talent by making this a welcoming and easy place to invest. But never forget that one of our strengths comes, not just from the low taxes, the openness, the English language, the large market here, all of the rest of it – one of our strengths is because of the long history and the investments we’ve made in culture.
I talked about the theatrical tradition and that is one of the reasons why I think Hollywood has such a close relationship with Britain. And so if we don’t invest in repertory theatre or all the rest of it, then we will lose what we have. So remember where your greatness comes from, when you’re thinking about the future.
We’re a Merseyside business involved in gas and power. We’ve heard today that Africa is one of the fastest growing global economies. What plans does the government have to support [inaudible]?
Right. Well, I think this is a major opportunity for Britain and one we haven’t always taken up in the past. I led a trade mission to Africa, to Nigeria and South Africa. And I want to do more of that because I think if you look at the – you know which economies are growing the fastest, you will see that some of the fastest growing are in Africa.
And I think for too long politicians, particularly, have thought of Africa as a destination for aid and a source of global difficulties and problems rather than an immense market opportunity.
So greater attention, I think the first point; I think the second point – let’s use the advantages that we have. We do have and have kept large aid programmes, particularly to sub Saharan Africa, that should give us a good relationship with these countries from which we can build better business and investment links; I think that makes a difference.
I think also we’ve got to make sure that our UKTI – you’ve been hearing from Lord Livingston – make sure that we’re orienting UKTI into the markets where we can succeed but perhaps haven’t yet succeeded; and I think that is absolutely vital. And then look at the specific businesses where there’s real opportunities. There’s obviously oil and gas opportunities – particularly in Mozambique, now discovering so much gas. But there are huge opportunities, I think, for small and medium sized businesses to get involved in these markets. And that’s really the big challenge here, is if we can go from 1 in 5 of our SMEs exporting to 1 in 4 we’d effectively wipe out our trade deficit altogether.
So I think a new focus on Africa; use the relationships that we have; and then try and identify some of the sectors where we can make a difference. Don’t just think big business, think small as well.
You brought up the question of the President of the European Commission, Prime Minister; what can you say to Angela Merkel to change her mind over the next couple of days, and what would happen if Jean Claude Juncker did succeed? What would that do to Britain’s prospects in Europe?
Well the point I will be making, which I’ve made to everybody, is that what matters is that we have people running these organisations that understand the need for change and reform in Europe. I think the programme is as important as the people and I think one of the things that Angela and I will be discussing with Mark Rutte and Fredrik Reinfeldt at this Swedish conference we’re going to is what is the work programme for the Commission and for the European Council for the next 4 years? Can we focus on completing the single market? Can we have a digital single market in Europe? Can we make sure we get an energy single market in Europe? Can we make Europe more energy resilient, particularly as we see the risks now of being over reliant on Russia?
Let’s look at the things we need to do, the flexibilities we need to create, the competitiveness we should be pushing. Let’s look at all those things as well as understanding that Europe needs to change. My reaction to the fact that in Britain an anti-European party topped the poll, and my reaction to the fact in France the Front National came first is not to bury my head in the sand and just wish all this would go away. I think we need to make sure we’re engaging with the public about these issues and changing some of the things that Europe does and some of the things that Europe doesn’t do in order to address these issues. So that’s what the conversation will be about but it’s about progress most importantly of all.
You said that you’d like 1 in 4 British companies to export instead of 1 in 5. One of the things that would really help companies be more competitive is getting more technical and digital skills; what is your government planning to do and doing to achieve this?
I’ve said a key part of our economic programme is to make sure that we have the best schools and skills to serve our people and our future. And we have rewritten the ICT and digital agenda in our schools because I think it wasn’t fit for purpose; it was simply about training people how to use a computer rather than – actually, one of the key skills today is how to code.
And like many sort of 40 somethings who struggled with all these new technologies that have come along, I was a bit sceptical about this to start with, and I would say to my team, ‘How can you possibly teach children of 7 or 8 or 9 or 10 how to code?’ And 2 points were made to me. One is this is an area of massive job creation, every app you have on your iPhone or your tablet or whatever, is basically a piece of code, and people will need to learn how to code.
But secondly, actually when you look at what coding is, it’s a relatively simple – you’re really just trying to write a set of instructions. And you can start to teach people that, and I’ve seen it in the classroom really work. You can start to teach people that at a very early age. So I think we’ve got to improve the curriculum; we’ve got to keep investing in not just academy schools but also universities and technical colleges, which I think are going to make a big difference. We’ve got to have better conversations between universities and colleges and government on the one hand, and industry on the other, about what the results of choices are.
As we stand today, if you’re a 14 year old or indeed an 18 year old it’s quite difficult to find out, ‘If I do this course at this university, what will happen to my future earnings, what are my life chances?’ And what we need to do is create much better information so you can see as you go through school what the choices you make will have for the rest of your life. Then I think we need to have almost an annual moment, rather like a budget, we could have annual skills discussion about, ‘Where are we short? Where are we not producing enough skilled graduates?’
Because we have the situation, it links to the immigration debate, we’re still bringing into our country every year certain skills that we’re deemed to be short in, but are we actually amending our skills policy fast enough to address those skills shortages? No we’re not, and yet we could. So I think a far more joined up conversation, an annual discussion about it and making sure that we have the quality schools that are going to deliver.
I don’t want to be accused of being a sycophant but let me just say this year – I paid tribute to Lord Livingston this morning at UKTI. Can I just personally thank you for your commitment to the International Festival for Business. Without you it wouldn’t have happened so on record, I really, seriously want to thank you for your efforts and I hope it’s something that will continue for the future.
Thank you very much. Well I think part of rebalancing the economy is actually Westminster based politicians giving far more attention, and where possible powers, to our great cities. And I’ve read what you have said our city deals and about the local growth plans that we have, and I’m really pleased that we are now devolving to cities some of the powers and some of the money – I know everyone wants more and I want to see more – in order to make things happen, whether it is building roads, whether it’s dealing with pinch points, making enterprise zones work.
This is the future, and I think the encouraging thing is, after the big argument about local enterprise partnerships and regional development agencies and all the rest of it, I think there’s now a political consensus. I saw what the Labour Party said recently and there’s a political consensus that business led local enterprise partnerships, devolving power and money from Whitehall to the cities – this is the future. The debate now in Westminster is about how far and fast that can go and the helpful thing is, no one’s arguing about changing the architecture round any more, it’s just about pushing everyone faster.
And I’d like to – in the spirit of let’s all thank each other – I’d like to thank Michael Heseltine who was in my office, in the Deputy Prime Minister’s office, in Vince Cable’s office, in the Chancellor’s office – crucially – and driving this agenda, to say it really is time to devolve more power and money to the cities and to make these local enterprise partnerships work. So Michael’s done a brilliant job and has driven a lot of this agenda.
[Inaudible] creative industries for a moment, and we’ve really had [inaudible] a flourishing right now; in film and video games and television and theatre. So first of all everyone is great partners in the industry, so thank you for that, in the spirit of thanking everybody. And I just want to ask specifically, if you’re looking at the future, what’s your view on what your government can continue to do to push that success, and with respect to skills and training as well, which has been a priority.
Well I think we’ve got to look at first of all at what Warner Bros are doing in Britain. I think I’m right that actually all the film studios that we have across the United Kingdom are full to bursting point, not just because of the tax credit but also I think that this is seen as a good place to invest and has good talent, and that’s great to see. Obviously as a Thrones fan it’s particularly good to see Game of Thrones made in Northern Ireland and we’re all awaiting the arrival of season 4 – or the box set as Clive James was putting it the other day.
So what can we do to help this? Well, keep the stable investment environment, keep the tax credit in a way that it is working well, but I think the challenge for us is skills. I think that if we’re going to be this home not just of US talent but also home grown talent, as was being said earlier, we’ve got to make sure that we are turning out the technicians through our colleges and universities.
And it comes back to my skills argument: we’ve got some great universities when it comes to the audio visual sector – places like Bournemouth. We’ve rewritten the curriculum done by someone who actually works in the post production industry, Alex Hope. I think there’s more – we could enlarge our skills base so that the facilities are even better run when people want to come and invest here. And I think there’s a big opportunity if we get all those things right. Plus, I suppose, we have to go on watching a bit of television and going to the cinema while we’re at it.
Prime Minister, you mentioned the RDAs and the LEPs and the consensus has moved on from that now. However, the amount of money the LEPs get is a fraction of that that was given to the RDAs. Also last week it was reported that transport spending in London and the South East was double that of the English regions, so it’s a fair question to ask, when are we going to get a fair slice of the pie?
Alright, let me take the second bit first, on transport spending. Obviously the current figures are very altered by the fact that Crossrail is the largest construction project taking place anywhere in Europe; so that obviously has an impact on the figures. If you look ahead and you can see the government’s plans for the whole of the next 5 years, you can see a massive transport infrastructure investment plan: the biggest investment in the railways since Victorian times, the biggest investment in our roads system since the 1970s.
Obviously HS2, which is of great benefit not just to the West Midlands and North West but also Yorkshire and the North East – that is a very big part of the government’s investment plans going forward. But the point I would make – because sometimes people think that HS2 is going to take up too much of the pie – we’ll actually be spending 3 times more on other road and rail schemes in the next parliament as we will be spending on HS2.
And I think if you look at the electrification of the Trans Pennine Railway, obviously a big benefit to the North West; if you look at the electrification of the Midlands Mainline, which goes all the way up to Sheffield, if you look the [inaudible] at all the things that are being done in terms of improving rail services in the North of England I think you’ll see a very big package going in.
You’ve also of course got the second Mersey crossing, so I think on any basis you can see that the North of England is getting a very fair crack of the whip in terms of future road and rail investment.
On the issues of RDA / LEP spending, I’d just make this point – look, of course we had to make some spending reductions and the RDAs did spend quite a lot of money on themselves rather than on projects, and I think the efficiency of the LEPs is that they are relatively lean; they are business led; they are not bureaucratic; and they are now bidding for and spending money that goes directly into infrastructure, into skills, into development. And I’ve given you some examples of that today.
All of this isn’t possible unless you have a functioning economy with a properly controlled fiscal situation. We couldn’t make long term decisions about infrastructure spending unless we’ve got the books under control, and this government has got the books under control which is why we can make these long term commitments, many of which will benefit Liverpool and the North West.
Can I thank you again for coming today; thank you for your welcome. I congratulate everyone who’s involved, I think we’re going to see some of the stands right now, but thank you very much, and come and invest in the UK, in the North West, in Liverpool. I know people don’t always come here for the weather, but I can promise you if you come and invest in Britain, you’ve got one of the most business friendly governments anywhere in Europe. You’ve got a growing economy, you’ve got a well functioning labour market, you’ve got low rates of taxation, you’ve got brilliant skilled people, you’ve got some of the best universities in the world, and obviously a team who’s going to amaze us all in the World Cup. What more could you possibly want? Thank you very much.