Thank you for inviting me here today to speak at your inaugural Director of the Year Awards; it is a huge privilege to be among the leaders of so many of the top businesses in Wales on such an important occasion.
Events such as this are an excellent opportunity to showcase success, and to celebrate innovation, enterprise and business leadership.
Everyone who has been nominated for an award should be justly proud, because it is you, the people in this room and people like you who will lead the economic recovery in Wales. Congratulations to you all.
You don’t need me to tell you me that the last few years have of course been difficult for business. Simply to survive has, for some, been a considerable achievement, but we must now look to the future, to grow the economy; and I believe that the decisions we are taking as a government are laying firm foundations for growth and investment.
The Budget two weeks ago set out our plan to create the best conditions for businesses such as yours to grow. We listened carefully to business when drafting the Budget and the Growth Plan; and I am particularly pleased that organisations such as the Institute of Directors support what we are doing.
And I welcome the comments made by Miles Templeman in his response to the Budget.
As Miles rightly said, it was “a Budget aimed at changing perceptions and boosting business confidence about long-term economic prospects in the UK”. I hope that is a view shared by you all.
Last 12 months
We are now approaching our first anniversary in government.
During that time, we have had to make some difficult decisions; decisions that were unavoidable in the light of the economic position we inherited from the previous government.
We simply could not continue their spending pattern, which was both unsustainable and – frankly -reckless.
The ratings agencies and the markets knew that and without the measures the Chancellor put in place in the emergency Budget to address the deficit, the United Kingdom could have gone the way of Ireland, Greece and Portugal.
So it was vital that we acted quickly to rebalance the economy.
And the consequence was that we secured the UK’s AAA credit rating. There was a time when that gold standard of confidence was very much at risk but, through the Chancellor’s actions, we avoided the disastrous consequences of its loss.
But taking that early, decisive action to address the deficit was the first and most important step towards ultimate recovery and growth.
Those who oppose our plan need to offer their own alternative; if all they have is a blank sheet of paper, they are, bluntly, in no position to criticise.
But now is the time to move on from rescue to reform, and on to recovery.
The key to recovery will be growth; and this government will strive to be the most pro-growth government in living memory.
Over the next few months we will drive forward a programme with one relentless focus: to grow the economy and secure the recovery.
We will be on the side of enterprising businesses and enterprising people in each and every part of the country, not just the south-east.
There will be no ‘forgotten areas’ of the nation when it comes to growth.
Abroad, we will make it the business of the British Government and its Embassies to talk Britain up – to encourage trade and investment so more jobs are created at home. Our message to the world is clear: Britain – Wales included – is open for business.
It is vital that we push on and encourage growth. And our Budget provides significant opportunities for private sector businesses to stand up now and commit to growth; to commit to creating jobs and to commit to help lead the economic recovery.
To be the country’s wealth creators, as they always have been.
In Wales, more than any other part of the UK, the challenges are great. Let me be frank. Welsh economic performance over the last few years has been extremely disappointing. Everyone in this room knows that. And that is something we in the Wales Office are determined to address, working with the Welsh Assembly Government and our colleagues across Whitehall.
And that, indeed, is something we are already doing. You should know that the Secretary of State has already held meetings of Westminster and Welsh Assembly ministers aimed specifically at seeking new ways of attracting investment and trade opportunities for Wales.
And we have listened to businesses right across the country – including many organisations represented in this room – to learn what they want from government. The results of those consultations informed last month’s Budget and the Plan for Growth, which represent the next steps in rebalancing our economy in the direction of sustained, private sector growth.
Gone are the days when government optimistically thought that growth could be achieved entirely through public spending. That was the fallacy that was in large part responsible for many of our current problems. It is overwhelmingly clear that we must look to a better, more sustainable economic model.
To create the right environment for businesses, we must reduce the two biggest burdens on most companies – taxation and regulation.
Last June, we announced our intention progressively to reduce the main rate of corporation tax.
And in last month’s Budget we went further, dropping it by 2% this year, rather than 1%.
We will follow this with three further annual 1% reductions, which will provide a much-needed boost to business confidence. By 2014, the UK will have one of the most competitive corporation tax regimes in the G20.
Through reduced taxation, we are recognising the crucial need to encourage and reward entrepreneurship.
We have extended the 10% entrepreneurs’ rate relief from the first £2 million to the first £5 million of gains over a lifetime.
And we have also set up the new Enterprise Allowance, which will support 1,800 unemployed people in Wales to start their own business.
And we will provide mentoring and financial support to ensure that new entrepreneurs are not deterred by barriers such as lack of finance or know-how.
Over the last 10 years, regulations imposed on business have become increasingly burdensome.
The current cost of regulation to business is around £88 billion and, whilst some regulation is of course necessary, over-regulation is holding our economy back.
On Budget day, we announced a package of regulation reduction that will save businesses £350 million a year.
This follows the introduction of the “one-in, one-out” rule for new regulations and sunset clauses for existing ones.
And today Vince Cable launched our public review of business regulations. Over the next two years we will be reviewing the impact of regulation sector by sector– starting today with the retail sector.
The challenge for Wales
The Budget is also great news for Wales.
The tax cuts and regulation reductions will benefit businesses as much here as in any other part of the country.
And as a result of the Budget, 10,000 fewer of the lowest paid workers in Wales will pay income tax; since we came to power, some 52,000 people in Wales have been taken out of income tax altogether.
Many more of the policies in the Budget and the Plan for Growth will apply equally across the UK but, in Wales, many key levers including business rates, apprenticeships and wider economic development are devolved.
The current economic climate is wholly different from anything experienced since the Assembly was established in 1999.
This presents a huge challenge for the new Welsh Assembly Government that will take office in May.
I hope that they will rise to that challenge and address the concerns of businesses in the way we have.
And to assist them, the Chancellor has given WAG a bigger share of the pot – an additional £65 million to spend in what was a fiscally neutral Budget. The challenge for the politicians in Cardiff Bay is the choice that this presents to them.
On the one hand, WAG Ministers could persist with their complaint that we are “cutting too far and too fast” and then use the extra £65 million to spend on projects that do not benefit business.
On the other, they could step up to the plate and use the extra support to help Welsh businesses and work with us in Westminster to match the commitments we have announced in the Budget.
To encourage investment, we are setting up 21 New Enterprise Zones across England that will provide businesses with superfast broadband, lower taxes, lower levels of regulation and light touch planning regimes. Business rates collected in the Zones will be retained locally and used for local purposes.
Enterprise Zones will be massive drivers of regeneration and growth in England. There will be Zones as close to the Welsh border as Merseyside and Bristol and there is no reason why there should not be Zones in Wales also, if the Welsh Assembly Government chooses to take advantage of the opportunities that we are offering them.
It is up to them; but if they were to allow Zones to forge ahead in England but not in Wales, how could they say that Wales is open for business?
And where do they expect dynamic new businesses will be established? In a low-tax, low-regulation England, or a high-tax, high-regulation Wales?
So I hope businesses will join me in calling for a more business-friendly environment in Wales and urge the Welsh Assembly Government to work with Westminster and join the rest of the country in seizing the enormous opportunities offered by Enterprise Zones.
A skilled workforce
It is not only businesses, though, that will play a role in the economic recovery – without highly skilled and qualified workers, Welsh firms will struggle to move forward.
Universities, too, have an important part to play.
Highly trained graduates are vital to companies that want to progress and to grow, and Wales is fortunate to have so many excellent internationally recognised Higher Education Institutions, such as Cardiff Business School. They provide not only first class academic courses but also excellent opportunities for students to gain real-world experience of working.
And Higher Education is also an important positive contributor to our balance of payments.
So my congratulations and thanks to Cardiff Business School and the rest of the Welsh HE sector for all they are doing to help speed the recovery.
But government, of course, has the principal role to play in leading the skills agenda. We want to give young people who have never worked an opportunity to develop new skills; skills that will help them to secure permanent jobs in the future.
We have committed to a work experience programme that will give an estimated 5,900 young people in Wales a chance to do this.
We already have employers such as Hilton Hotels, DeVere and Carillion signed up, to help start tackling one of the biggest barriers facing young unemployed people.
I would urge as many of the companies represented here as possible to consider signing up for this programme; by providing young people with the opportunity to gain skill, you will be helping to strengthen Wales’s economic future.
And my final message to you today is this: I want you to know that we are a government that is listening to you, the representatives of British business.
Over 1,000 meetings with businesses across the country contributed to the Plan for Growth and we do not intend stop there.
We want you to grow; we want you to succeed; we want you to continue to make the invaluable contribution you have always made to increasing the wealth of this country.
So keep talking to us. Don’t stop telling us what more you think we can do to help your businesses succeed. Because that is what every single minister in this government wants and is focussed upon.
Once again, thank you so much for providing me with the opportunity to speak here today.