Speech

PM to bring G8 to Northern Ireland

Transcript of David Cameron's speech and Q&A at the NACCO Materials handling factory, Northern Ireland.

Prime Minister

In our country we need to make more things; we need to sell more things; we need to manufacture more.  We are in, what I call, a global race and I want Britain, I want the United Kingdom to be one of the success stories in that global race and that requires businesses like yours to go on competing and succeeding.

And there’s another reason I wanted to stand here today, in this factory, is that I want to make an important announcement about a big investment, I hope, that is coming to Northern Ireland.  And that is this: next year Britain will be the chairman of the G8 group of countries, eight of the most important and powerful and strongest nations in the world: America, Russia, France, Italy, Germany, Japan, Canada. 

And as Chairman of the G8, I get to decide where to hold the big G8 conference next year, on 17th and 18th June.  And I’ve decided the right place to hold it, is right here in Northern Ireland.  And we will be holding the G8 at Lough Erne in County Fermanagh.  I think this will be a brilliant advertisement for Northern Ireland.  I want the world to see just what a fantastic place Northern Ireland is. 

A great place for business, a great place for investment, a place with an incredibly educated and trained workforce, ready to work for international businesses and I also, of course, want to show the world what a beautiful place Northern Ireland is and Lough Erne, where I was this morning, is one of the most beautiful places in the entire United Kingdom.  I hope I won’t have any trouble keeping President Obama off the golf course, because it’s a pretty amazing golf course, but I think it will be a great moment for Northern Ireland and I’m really pleased to make that announcement today. 

The other thing I wanted to do today is to answer your questions, and I’ll do that in a moment.  But let me just say a word about what I hope we’ll achieve through this G8 meeting next year because, as I said, we are in this global race, we’ve got to do everything to try and kick-start the engines of the world economy to make sure that we get the growth and the jobs we need here in the United Kingdom.  And there are three things in particular I want the G8 to focus on, which are good for the world, but also good for us right here in the United Kingdom.

The first is trade.  One of the biggest threats we have to the world economy is that we start putting up protectionist barriers.  This happened the last time there was a world recession of the scale we’ve had back in the thirties and it was disastrous for the world economy.  And you see today in our world, pressures for protectionism and pressures for trade barriers.  The United Kingdom and, in fact, Northern Ireland specifically has always benefited from an open trading system in our world.  The machines you make here sell all over Europe but also in the Gulf and Africa and further afield as well.  So one of the priorities of the G8 will be to keep the arteries of the world trade economy open to fight protectionism, to fight trade barriers, to make sure those markets are open for our goods, our services and our people.

The second thing I want us to focus on which is becoming, I think, a growing problem in our world is the fact that some businesses and some individuals hide their taxes away and don’t pay them fairly - and there are too many tax havens, too many places where people and businesses manage to avoid paying taxes. 

Now, I’m all for low taxes, I want low tax rates, including low tax rates right here in Northern Ireland - that’s one of the ways we are going to attract investment.  But it’s not right if you have businesses instead of paying some taxes somewhere are paying no taxes anywhere.  And the G8 - when the world’s most powerful and important countries come together - I think can help to crack that problem. 

The third thing I want us to look at is an issue about making our world and making businesses in our world and making governments in our world much more transparent, much more open.  Now there’s a very high-minded objective to this but there’s also a slightly more down-to-earth and national interest objective to this. 

There is a high-minded interest because when you look around the world you can see some of the poorest countries that find they have mineral wealth - they have oil or they have coal or they have gas - and it turns out to be a complete curse rather than a blessing because the money from that material wealth is taken from the people, not shared by the government, and a more transparent way of dealing with this can make sure these resources are a blessing for those countries and not a curse.

But there is a slightly less noble motive in all of this which is that in Britain, in the United Kingdom, we have some of the toughest rules about transparency, about openness, about the way we do business, about not bribing, about not being corrupt.  And we have those rules, and actually, frankly, it’s in our interest if those rules are applied all over the world.

So those are some of the things we’ll be talking about at the G8 here in Northern Ireland. Obviously, we’ll be talking about how we deal with the crisis in Syria, how we try and bring peace to the Middle East, and all those other issues.  But I think it’s a great moment for Northern Ireland that those world leaders, that the eyes of the world, the eyes of the media, will be on this great part of the United Kingdom, and all that Northern Ireland has to offer in terms of jobs, business and investment.

So that was all I wanted to say by way of introduction.  Please feel free to ask any question you like.  I’ll try my best to answer it, within reason.  But who wants to go first, please hands in the air.  Gentleman here.  There’s a microphone coming for you sir.

Question

First of all, I feel it would be remiss in myself not to express my disappointment that the G8 isn’t coming to Lurgan.  As you know, you may well be aware that in these current times, we’re under a bit of pressure economically.  Firms like ourselves, we’re under a lot of pressure to meet targets, to be more productive, and what is particularly relevant at this minute in time is effectiveness, and our drive to be more effective.  

Prime Minister

Well the first part of your question, the first part of your question - I think I’m not going to please everyone today clearly.  We’re all - as I said at the beginning, we are in a global race.  It’s a very tough economic time.  You have done extraordinarily well here since 1981; the investment that’s gone in, the production that you’ve done.  I think the way this business behaved over the difficulties of 2008, 2009, where, you know, you wanted to keep jobs, you wanted to keep production going, so you took pay cuts, you went down to a shorter working week.  The flexibility shown by the workforce to help this business survive and then thrive as the better times start to come, I think is a huge testament to all of you.

Now, what can we do, what can government do, to try and help businesses like yours win in this global race?  Well frankly, lots of things.  First of all, we’ve got to get out there and help you sell to the world.  And one thing I have done as Prime Minister is lead trade missions to every single one of the G20 countries like Russia, India, China, Saudi Arabia.  I’ve taken businesses, and I’m happy to take your business, to any of these countries to show how good we are at manufacturing, at technology, at business, here in the UK.  I have to correct myself.  There is one G20 country I haven’t taken a trade mission to, and that’s Argentina.  And if that’s alright by you, I’ll hold off that one for a little bit longer.

We need to keep tax rates down, and I know there is a big debate about whether we can have a lower rate of corporation tax here in Northern Ireland.  We’re looking at that issue closely.  We need to make sure we’re training with new skills, that we put more into apprenticeships; and I know that the Northern Irish government is working very hard there, as we are in the rest of the United Kingdom. 

So there’s more we can do to make sure we win in this global race.  But I think it’s vitally important, when particularly we look at the economy in Northern Ireland, we need to rebalance.  Right across our country, the state got too big and the private sector got too small.  And that’s particularly true here in Northern Ireland. 

So we need to expand the private sector.  That means big companies like yours, where we help with the training, we help with the exports.  But we also need a big revolution in terms of encouraging new businesses to start.  And the good news on that front is last year was the best year for new business creation in our country for decades.  But we need that to go further and faster.  More small businesses are part of the engine of our economy, and we need them to grow.

Question

David, we pay a tax out of our wages.  Why should we pay a VAT whenever we go to buy items?

Prime Minister

That’s a very good question.  We pay tax out of our wages, why do we have to pay VAT as well when we go and buy things?  I’m afraid the reason is that we need to raise a certain level of taxes to pay for the NHS, to pay for education, to pay for defence.  And if you put all the tax on income or all the tax on expenditure, I think you’d have too big a burden on one group of people.  So like other countries, we take tax in terms of income, we take tax in terms of Value Added Tax.

What this government did was decide that we didn’t want to keep pushing up taxes on income.  That’s why, to help fill in the big black hole of our budget deficit, we did put up VAT.  We thought that was better, frankly, than putting it on National Insurance contributions, which is what the last government did, or putting it on income tax, because we don’t want to price people out of jobs.  And it’s always difficult putting up taxes, but frankly, you need a balance between income taxes and Value Added Taxes.

The truth is though, the only way you keep taxes down in the long run is by controlling spending.  And you can have politicians who sort of tell you endlessly they can do everything: they can cut your taxes, increase your spending.  In the end, that’s just not true.  The money has to come from somewhere.  When we came in, the budget deficit was around 10% of our national income.  That was actually bigger than Greece, bigger than Spain, bigger than these countries you see in terrible trouble on the continent. 

And so we’ve had to take tough decisions: some spending reductions, some tax increases.  But in the end, if we keep spending under control, as the economy grows, then we will be able to help people by giving them back some of the money that they have earned.  And that’s what I want to do.  Frankly, that is what government should do.  Government should be on the side of people who work hard, who save, who want to do the best for themselves and their families.  That’s who we should be rewarding in our politics, and too much in the past, it hasn’t been that way.

Question

My question for you today David is for us to control the cost of our operations here in Northern Ireland, we try and stay on top of things.   Business  rates, we would need them at around 30%, or certainly no greater than 30%, going forward.  What is your intent for 2014, 2015 and beyond.

Prime Minister

Well, I think this is a very big issue in business because it’s one of your greatest levels  of cost.  In terms of Great Britain - I’m not entirely certain for Northern Ireland - we’ve taken the power not to have a revaluation, because I think a revaluation, although of course some people’s rates go down and other people’s go up, it can be immensely disruptive.  So I think the most important thing we can try and give you now is a sense of certainty that some of these key costs are not going to change for you.  And I think that’s probably the best that we can do right now.

Question

Has the government any plans for rolling out fast-speed broadband for every part of Northern Ireland and not just parts of it?

Prime Minister

I’ll hand over to Arlene maybe on this one, but, no you’re absolutely right.  Look, if you want to be a winner in the global race, right, you’ve got to have access to this technology.  It’s a bit like, you know, 50 years ago, saying, ‘Well we’d like this village to have a successful manufacturing business, but there’s no road to it’. 

You know, if you want to run a publishing business, if you want to run any business that’s got anything to do with digital, you’ve got to have high-speed broadband.  So this is really vital for our country.  We’re putting a lot of money into it.  It is taking time because, you know, you’ve got large rural areas in Northern Ireland where it’s going to take time and technology to get that high-speed broadband to you.  But our plans are that everybody gets - over 95% should get 25mb by 2015.  Arlene, do you want to join in with me there?

Arlene Foster

Well I can do yes.  Thank you very much.  The good news is that just today I read that Ofcom have said that Northern Ireland is the very best in the UK for broadband coverage.  And I’m very pleased about that, obviously.  And the problem, Prime Minister, for us in Northern Ireland is that so many people have such good broadband coverage that the few that don’t have the good broadband then obviously feel left out.  And I think the job for us in Stormont and indeed in conjunction with the Department of Culture, Media and Sport in Westminster, is to try and plug those gaps.  And that’s certainly what we’re looking at doing at present.

Prime Minister

Thank you.   There’s one other point which is worth making. I read an extraordinary figure the other day about the number of people in parts of Northern Ireland who don’t use the internet at all.  And this is important because as well as making broadband available, you’ve got to encourage people to use it.  And actually, you won’t make broadband available unless the companies rolling it out think there are users at the other end of the line.

So I think government needs to think not just about the roll-out process, we need to think about how to encourage people to go online, to use digital services.  And government, in the end, will be quite a big driver of this. You know, as we reform welfare, for instance, much more should be done online.  Now, we have to help people who find that hard to do, but if we do that, we’d actually find there is a bigger audience for online services as they get rolled out, and the two will reinforce themselves.

Question

It’s a two-part question.  The first part is, what plans has  your government got to create growth and also to create jobs in the public and private sector?  And the second part of the question is, I think it’s imperative for you to look at the youth of our company, because I think we need a stimulus because we’re in danger of creating a lost generation.

Prime Minister

Thanks very much.  Well first of all, plans for jobs and growth.  Line one of the growth plan, is we have to deal with our deficit, we have to deal with our debts, we have to show the world that we can pay our way in the world.  If you don’t do that, then you lose the absolute key to growth, which is low interest rates. 

Now, our interest rates are amongst the lowest in Europe; they’re the lowest that they’ve been: that helps business,  that helps households.  If people didn’t have confidence that we had a plan to pay for our debts and a plan to get our deficit down, we could see our interest rates go up, as they are in places like Italy and Spain: you know, 4%, 5%, 6%.  That would be hugely damaging.  So line one has got to be having a plan to get on top of our debts and our deficit.

Then what we need to do is, basically, every single thing that encourages businesses to employ people, to grow, to invest, to sell.  So I can’t right now think of a thing that business is asking for that we’re not trying to provide.  They’ve said reform the planning system, make it easier to build: we’ve done that.  They’ve said cut corporation tax, so it’s better to invest here in the United Kingdom: we’ve done that.  They’ve said help us put more money into apprenticeships: we’re doing that, so we train the staff of the future.  They’ve said lead export missions all over the world: we’re doing that.   Build more houses: we’re making it easier for people to build again, because that’s a key engine of growth in our economy.

But where I absolutely agree with you is that if we don’t succeed in this, there is a danger that we’ll leave young people who are desperate to work, who want to get on in life, and we won’t give them those opportunities.  And all the evidence is that if you leave school and you don’t get a job, the longer you don’t get a job for, the more it damages your prospects not just in the short term, but for the rest of your life. 

Now, of course it is difficult and it is regrettable that the unemployment rate in Northern Ireland has crept up, although it’s still below the rate for the rest of the United Kingdom.  But if we look across the whole of our country, although we’ve had a tough time these last two and a half years, we’ve actually created 1 million extra jobs in the private sector. 

So while jobs in the public sector have come down, and inevitably they had do - whoever was Prime Minister right now would have to make some spending reductions because of that deficit I was talking about.  Although jobs in the public sector have come down, jobs in the private sector have grown by more than enough to offset that, and actually to end up with a million net new jobs in the private sector.  So that’s why we’ve seen some falls overall in unemployment, and there are more people in work in our country and more women in work in our country than there have ever been in our history.

So we’ve got much more to do.  We’ve really got to help particularly those young people.  That’s what our Work Programme and Youth Contract and welfare reform is all about.  We’ve got to stop making it an option for young people to make the choice of living on welfare rather than working. 

You know, you look around Europe and you think, ‘Right, which are the countries with low rates of youth unemployment?’  And you see it: 50% in Spain, that’s one of the worst.  You look at Holland: around 8%.  Why is it that the Dutch manage to have such low rates of youth unemployment?  Well one of the reasons is, it’s really not an option to be unemployed and young in Holland. 

You’re either in school, in training, in workplace training; but we don’t give people an option of sort of saying, ‘Well actually, I’ll claim jobseeker’s allowance, I’ll live off housing benefit, I’ll go down a path that is really about a life on welfare rather than a life in work’.  They don’t really provide that option in Holland.  They keep people at school, they keep people in training, they find them work placements and make sure that their life is one of work rather than one of welfare.  And I think we need to look very carefully at what they do and think, ‘How can we create that right here in the United Kingdom?’

Question

It’s a privilege that a company like this gives us students a year-out placement like this.  It’s a good stepping stone.  And just on that, probably more to my heart is the agricultural industry.  I believe it’s the biggest private industry here in Northern Ireland and especially with the difficult conditions we’re having at the minute with our weather and food prices, etc., what is your government doing to help our agricultural sector?

Prime Minister

Well, I think our agricultural sector actually has quite a big opportunity in the world today, which is that we see a growing world population; we see countries like India and China creating vast middle classes, hundreds of millions of people being lifted out of poverty, who are joining the middle class; so there is a huge demand to feed the world.  And those countries that actually have efficient agricultural sectors, that have the right sort of climate - and we certainly have that in terms of a little bit of rainfall here and quite a lot of green grass - we should be, actually, seeing a strong and healthy agricultural sector. 

I think there are some things we’ve got to get right.  I think we’ve got to cut a lot of the regulation and bureaucracy that we’ve wrapped our farmers in.  I think we need to promote our own very, very, well‑produced food here in the United Kingdom.  I think, you know, in the end, farmers in Northern Ireland, farmers in Great Britain, will benefit if we all advertise and promote the fact that our food, our meat, is now the cleanest and the healthiest grown almost anywhere on the planet and we should back it.  I think that will help our home market.  We need to invest in new technology and make sure we keep ahead.  But I think if we do those things, there’s no reason why we can’t have a healthy agricultural industry and one that becomes, over time, less reliant on subsidy. 

Obviously, on Thursday I’m going to be spending some quality time in Brussels with my colleagues in the European Union, looking at the budget.   Right now in the European Union, 40% of the budget is spent on agriculture.  That obviously is not sustainable in the long term.  That number has got to come down and I think it’s important we try to encourage our farmers to think about how we’re going to subsidise those things that we all want done, to make sure we have a beautiful environment and a sustainable countryside; but we should be trying to take subsidy away, right across Europe, from direct subsidy into production. 

We’ve pretty much done that here in the UK; we want others to do that around Europe.  That’ll give us a level playing field, and then if we invest in the technology, keep off the bureaucracy, there’s no reason why we can’t be part of the answer for feeding the world.

Question

The development of the workforce is important to us. What is your government going to do to help support that in the future?

Prime Minister

Right.  Well, it’s a big, big question.  I think the key here is recognising that there’s no future for Britain, and for the United Kingdom, for Northern Ireland, if we try and compete at the level of low‑paid, low‑skill jobs.  We’re never going to be able to beat not just the Chinese but, you know, the Vietnamese, at that sort of game.  So, we’ve got to recognise that our - our biggest advantage is the talent and brilliance of our people, and invest in them. 

Now, what that means is actually we want to move the school leaving age, effectively the participation age, up to 18.  I think that makes sense, to keep people either at school or in apprenticeships or in training.  It also means we’ve got to make sure our universities are of a high quality.  And I know there’s this big debate about tuition fees and student fees; frankly, if we want our universities to be the best, if we want, you know, Queen’s in Belfast to compete with any university in the world, which it can, we have got to recognise those universities need money.  And in the end, the money can only come from two places: the taxpayer, some of whom don’t go to university; or the student.  And I think it’s right that we do have student fees and we do put that money into quality universities. 

So, I’ve got a vision where people don’t leave school at 16 ; they stay on or they go into workplace training.  Universities are of a high quality because we’re putting the money in and we’re not frightened to say to students, ‘It’s worth your while to pay later in your life for a quality education’.  And then I think we need to expand vocational and technical education and try and end this idea that you can either go to university or you leave school and you get a job.  What we should be recognising is that apprenticeships and going to work can be a good route into university as well.

If you think of one of the most famous companies in our entire country, Rolls‑Royce, who, you know ,  make the engines of the Boeings and the Airbuses that power the aeroplanes of the world; half the board of Rolls‑Royce were apprentices.  And if you look at Rolls‑Royce today, they are investing massively in apprenticeships; but many of those apprentices later go on to university while they’re - while they’re working.  So, I think the concept of earning and learning as a different pathway to the school‑university pathway, is something we need to boost massively in our country. 

So, that’s what we should be aiming for: quality, continuous improvement and education through life, and recognising that’s how we’re going to compete and succeed in the modern world; we won’t do it by just undercutting and having low‑skilled, low‑paid jobs. 

Question

My question is: what incentive is there for large companies to source supply of product within the UK?

Prime Minister

What incentives are there?  Well, this comes back, I’m afraid, to the very first thing I said, about openness and trade.  We can’t have a system where we put up tariff walls and we say, ‘You have to source your product from within this country rather than from somewhere else’.  If we did that, other countries would do that.  And actually, if you look at the brilliance of UK manufacturing - and we’re still one of the top ten manufacturers in the world - the brilliance is that we’re fantastic at sourcing and purchasing from the best, the brightest from all over the world, and we shouldn’t give up on that. 

But I think what we can do is, as a government, I don’t think we’ve always been very smart at nurturing our suppliers and our customers.  You know, if I think about this company or, for instance, the auto industry that is doing extremely well in the United Kingdom - you know, all of them: Jaguar, Land Rover, Honda, Nissan, Toyota, Mini - near where I live, in Oxford - they’re all investing massively in the UK and they’re bringing their supply chain onshore. 

And they’re doing that because that’s good for them and they are working with their suppliers; they’re telling their suppliers what they’re going to need, when they’re going to need it, what their next lot of plan s  are.  So, I don’t think you get the supply chain onshore by putting up the barriers.  I think you get it by being a sensible customer.

Now, what can the government do about that?  Well, we’re not always a very predictable customer and I think, when it comes to - whether it’s commissioning nuclear power stations or whether it’s commissioning new trains, or whatever it is that governments buy, we need to be a bit smarter, a bit more thoughtful, like businesses like yours are; warn our customers and suppliers further in advance about what our needs are going to be.  Work with them, talk to them, have a partnership with them.  Now, that’s not protectionist; that’s not against the rules of the European Union, it’s not against the rules of the World Trade Organisation; it’s just good business practice. 

So, I think we need to bring some of the business thinking that you guys have into the way government sources and purchases.  That way, I suspect we’ll get a bigger manufacturing base, more things made in the United Kingdom; but we’ll do it while still being a country that says, ‘Let’s have an open trading system. Let’s not put up trade barriers.  Let’s fight to get rid of the trade barriers that are still stopping us selling stuff to other parts of the world.’.  Because, as I said, when it comes to this thing about the G8, it’s really important that we’re the ones arguing for an open economy, because it’s benefited us so much over the years and will do again in the future.

Can I thank you again for making me so welcome?  It’s been great to be here, great to see some of your products, some of the things that you do, and to try and answer your questions.  And also, great to be here on this day of good news for Northern Ireland: the world leaders are going to be here next year, debating the issues that are vital for the future of our world, vital for the future of Northern Ireland; and seeing this brilliant, beautiful part of the United Kingdom and seeing it’s open for business, it’s great for investment, it’s got fantastic trained, skilled workers, ready to take on the world. 

And isn’t it great - by the way - that we’ve sat and we’ve had a question and answer session: we haven’t talked about peace process, we haven’t talked about politics, we haven’t talked about any of those things.  Which shows that, actually, the real Northern Ireland is a Northern Ireland of people who work hard, who want to get on, who want to build things for their families, who want to build strong communities; and it’s a pleasure being able to be here and say that today.  Thank you very much.

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