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Chancellor's speech, Blackpool 1998

Gordon Brown (Labour)

Location: Blackpool

Friends, let me first also thank David Obajie. David, by your speech today about the work you do, you remind us of why we are all in politics, ideals which made us join the Labour Party, and why if a Labour Party did not exist, it would have to be created today to give opportunity to people in Britain. (Applause) As a party, we should take some satisfaction that David is now one of 128,000 young people throughout Britain on the New Deal. For them the New Deal has already been the difference between unemployment and now opportunity, despair and now a future, the dole and the hope of a career, the Tory Britain that was and never should return and the Labour Britain that is now being built. (Applause) I am now pleased this morning that joining us in this battle against unemployment across Europe is a new Social Democratic government in Germany. (Applause) Friends, there are now New Deal employees in almost every large company in our country, in the City in financial services, in trade unions, even in some of our most famous football clubs; New Deal employees also in the Treasury, and there is now some interest in the New Deal from the smallest companies in the country - organisations as small as even the Conservative Party. They really do need New Deal employees, for Leader, Deputy Leader, Shadow Foreign Secretary and many others. But of course, we would have to turn them down. The New Deal is about real employment with a future, not dead-end jobs. (Applause) After their conferences last week we will have to give the same answers to the Liberals and to the Nationalists, too. Now friends, this morning I want to speak about the journey that on 1 May last year we embarked upon together, about the guiding principles, about the challenges we must and will overcome, and the steps that month by month, year by year, we must take together to equip our economy for the 21st century. Ours is a journey with a purpose. It is a journey of high ideals for our country. It is a journey by which the potential of Britain is to be realised by releasing the potential of all the people of Britain.

The first stage of our journey has been to keep the first-year promises we made to start the renewal of Britain, on jobs, investment, public services and stability. Our first promise to the people of Britain was that we would make education the priority of every parent, the foundation of all our futures, and the first priority of this government. That is why to cut class sizes, rebuild crumbling schools and eliminate those life-time educational inequalities, David Blunkett will be investing in educational reform as a result of our public spending reviews an extra £19 billion, the largest ever investment in education, and only a Labour government could have done it - (Applause) - £3 billion next year, £6 billion the year after that, £10 billion the year after that. That is what we mean by "education, education, education." Now our promise to Britain was that we would also rebuild the National Health Service. Frank Dobson is ending the internal market, tackling health inequalities and undertaking the largest hospital building programme with an extra £21 billion in investment, as a result of our spending reviews, so that once again Britain will have a National Health Service where care is provided not on the basis of the wealth you have but the health care you need. That is the NHS. created by a Labour government, now being rebuilt by a Labour government, the National Health Service safe in this government's hands. (Applause) For pensioners, as a first step, there is the first ever minimum income guarantee, the minimum raised next year by £5 more a week, £7 for couples, and the eye-test charges for pensioners - which the Tories should never have introduced - wil now under a Labour government be abolished. (Applause) Our promise to Britain was that in our first year we would begin also to tackle poverty in work, to make work pay and to build a fairer Britain. That is why we have legislated for what Keir Hardie first demanded a century ago, Britain's first ever national minimum wage, and a new working families' tax credit. (Applause) Let us tell people that together, these two historic measures will guarantee for every working family and their children a minimum income of £180 a week, more than £5 an hour. In this way we also honour the memory of John Smith, who fought so hard to end exploitation and poverty pay. (Applause) As Tony Blair said yesterday, our first priority for fairer taxation is to reduce the high marginal tax rates facing the lowest paid in our country. That is why we will cut national insurance for employees from next April, and when it is prudent and right to do so, we will use a new l0p starting rate of income tax. It is to meet our commitment to reduce poverty that from April we will raise Child Benefit for every parent, for the first child by 20 per cent, the largest increase in Child Benefit in its history. (Applause) To enable parents to balance their family and work responsibilities, we are introducing for the first time - and let us pay tribute to the women's organisations throughout our party who have campaigned for it - a policy for family-friendly employment in the United Kingdom, extending parental leave, introducing four weeks' paid holidays for every employee and creating a million childcare places. A national childcare strategy is no longer the distant hope of parents, but the practical policy of this country's government. Working with Clare Short, we have now put debt relief, and the relief of poverty in the poorest countries, at the top of the international agenda. We have set for the first time targets for debt reduction for the millennium. The share of overseas aid in national income, scandalously cut by the Conservatives, is once again rising, overseas aid spending to be increased by 28 per cent, the largest single rise in any departmental budget, and only a Labour government would have done it. (Applause) Now friends, if Labour had promised before the election that under the leadership of Tony Blair in our first 500 days of office we would legislate for the first ever national minimum wage, the first ever minimum family income, the first ever pensioners' minimum income guarantee, a million childcare places, the largest ever rise in Child Benefit, new rights for working people from GCHQ to childcare, and on top of that have created an extra 400,000 jobs, we would have been accused of making promises we could not deliver. But not only are we under Tony's leadership honouring our promises, we have been able to commit an extra £40 billion to health and education, banishing for ever the myth that there is no difference between Conservative and Labour government, and reaffirming for the people of Britain that Labour is the party of compassion, of competence, of principle, and of modern public services of which we can be proud. For the economy, our most basic promise of all to the people of Britain was to restore the central, long-term objective of government, the commitment to high and stable levels of employment and growth. The 1944 aims for the modern world mean employment opportunities for all in every part of the United Kingdom, our goal of full employment for the 21st century. Now that was the purpose which brought me and others into politics. It is the purpose that infuses our economic responsibilities with moral value, that everyone and not just a few should have opportunities in our country. This is the purpose of politics we learned from history, and I learned from the miners, the factory workers, the public servants in my constituency, whose shared hardship did not drag them down into selfishness, but made them even more determined that none should be left behind and that all should advance, and advance together. That is the decent instinct of people throughout our whole country. Now I know, I think we all know, the economic challenges that we in Britain have to surmount. The Japan which I visited last week and one quarter of the world are today in recession. The world's financial system is over-exposed and over-extended, it is under-supervised and under-performing, and in need of far-reaching reform. I also know, and I think we also at first hand know, that with the massive, relentless and revolutionary forces of global technological change and competition, today's innovations, indeed today's companies, can be out of fashion, out of date, out of demand, and then out of production tomorrow. As a result, employees already face the prospect of changing jobs not once in their working lives but on average eight times. When entire workforces ask us why is it that in the newest jobs, in the newest industries, often with the newest technology, these can be as vulnerable to international competition and change as the old jobs, in the old industries, it is because what drives the world economy today is ever more rapid waves of innovation and investment from which in an open global economy there is no shelter in siege economics. The way forward is only this, to equip ourselves continuously as a nation to meet these challenges of change. In this new economy, the route to prosperity is neither government attempting to stop the clock, nor the laissez faire of the Tories, the old Tory way of doing nothing, leaving people isolated, defenceless and powerless in the face of change. The route to prosperity, the only route, the Labour route, is to equip our companies and our people so that we are equal to every challenge ahead, and it is only the Labour Party that understands this new role for government in a new age. It is not government suppressing markets, and it is not government surrendering to markets. It is government helping people to equip themselves for every challenge which these global markets bring. So I tell this Conference, in this new and fast-changing world our government will not lose sight of our purpose, the 1944 goals - the same yesterday, today and tomorrow - but I tell you as I have told you every year for the last six years that I have been your Treasury spokesman, we will achieve these goals in only one way: the new Labour way. Our first task had to be to set a long-term credible framework because we had learned by the Tory mistakes that every time the British economy started to grow, it quickly overheated and ran into inflationary pressures, and it did so because our economic base in Britain was too narrow and its capacity was too weak to sustain anything other than slow growth. That is why every past growth cycle has contained in Britain the seeds of its own destruction, and it is to end the repeated cycle of boom and bust that we made the1 Bank of England independent. We gave it the membership and remit which I reaffirm, to achieve the stability that is an essential precondition of the long-term investment growth and jobs we need. It is because the causes of slow growth, unemployment and inflation are the same that there is no long-term solution to employment which does not also demand a solution to inflation. So I say to manufacturers, I have understood your immediate concerns about the pound. But you have also told me that the greatest long-term threat to your businesses and the jobs which depend upon them is the boom and bust instability we are determined to avoid. Now that is why we have taken tough action ror the long term, and it is pursuit also of these long-term goals he rejection of short-termism and stop-go, that has led us to take the difficult decisions on spending, to cut the deficit by £20 Million, 2.5 per cent of national income. I say to this Conference it is only because we corrected the Conservative errors, and we tackled both the deficit and inflation, that people understand that in a world of instability today Britain is steering a course of stability. (Applause) I tell this Conference, there is no solution, or even comfort, in son options. No magic wand solutions. There is no quick-fix alternative to meeting these long-term challenges to achieve the goals we share. Let us just remember the history. It was short-termism, abandoning long-term goals, at a time of world instability in the early 1970s, which brought us the Barber boom and the start of the inflationary spiral. It was the short-termist climate of the day in 1974 which led Labour to postpone the difficult decisions in its first two years of government. It was short-termism most of all, the betrayal of the country's long-term needs, which, in spite of all the talk about long-term resolution, led Margaret Thatcher and Nigel Lawson ten years ago to inflate the economy, cut taxes, go for short-term growth, and brought us to the 15 per cent interest rates, the million lost manufacturing jobs and the boom-bust recession they caused in 1990. For the sake of the families and businesses of Britain, whom the Tories betrayed, we are never returning to such short-termist policies again. (Applause) So my message to our Conference is this. It is in pursuit of our long-term goals of growth and employment that we will resist the 'inflate your way to growth' short-termism, the 'disinvest rather than invest' short-termism, the 'spend now, pay later' short-termism, and the 'take what you can get and sacrifice the future' short-termism. Let all of us who criticise short-termism in the boardroom also resist the most short-sighted short-termism: for 18 years to demand long-term solutions to fundamental economic weaknesses and then, in less than 18 months, at the first sign of difficulty, to grasp at the old quick fixes and the soft options which have failed us in the past. I say Labour's economic competence, our iron resolution, our prudence for a purpose, is hard-earned and it is hard-won, and we will not sacrifice it for today's standing ovations, tomorrow's headlines, next week's easy slogans, or next month's false solutions. (Applause) So it is because of our commitment to long-term stability, for growth and jobs, even more essential today at a time of world instability, that from this government there will be no U-turns, no left turns, no right turns, no return to Tory boom and bust. (Applause) Instead, friends, our task together is to make Britain equipped for and more than equal to every eventuality ahead, to be able to rise to every challenge the global economy will throw up. So let me now spell out the next stages of the journey. At a time when the balance of risk in the world economy is shifting, a Britain facing up to the challenges must work with other countries, and we must now implement a reform agenda for global stability and growth. A Britain which sees that our national economic interest lies in a Europe that is a zone of stability and growth will reject the isolationism of the Conservative Party. We will refuse to rule out constructive engagement, particularly on the single currency, on the basis of some Tory ideological dogma. Let us work together also, globally, on the priority reforms: in order to tackle these destabilising international capital flows, proper financial supervision and control worldwide: in order to ensure openness and responsibility in monetary, fiscal and corporate governance and behaviour, enforceable codes of conduct which every country, rich and poor, should sign and uphold; in order to ensure global co-ordination, an IMF and a World Bank which are better equipped, modern and accountable, and there should be no resort to protectionism, which harms the poorest countries most. Because for us an injustice anywhere is a threat to justice everywhere, the Labour government will propose at the IMF meeting in Washington a new and pioneering global code of conduct for social policies, to ensure that our obligations to the unemployed and the vulnerable are met in every part of the world. (Applause) Twenty years ago, at a time of British economic instability, a Labour Chancellor travelling to the IMF was pulled back here to Blackpool to defend his policies before a divided Conference. But tomorrow, with Britain steering a course of stability in an uncertain and unstable world, I will be able to travel as Labour Chancellor to put to the IMF, with your support, the case for policies for growth, stability and fairness. (Applause) And what we will pursue abroad, we will now also practice at home. So let us face some facts. The new Britain cannot be created or sustained with productivity levels 40 per cent below those in America and 20 per cent below those in France and Germany. So over the next year, in partnership with everyone in industry, we will examine and in the years ahead tear down every barrier to high productivity and prosperity for our country. We will reverse restrictive practices and replace them with a Britain that is open to competition, efficiency and innovation. We will challenge old patterns of complacency which stand in our way, and we will take on every indefensible vested interest, so that once the walls of privilege are broken down, the potential of all our people will be allowed to flourish. That new Britain, as everybody now knows, taking up this challenge of change starts in the classroom and in the lecture room, as well as in the boardroom. Our agenda for higher productivity demands that we invest, from the nursery school through to life-long learning. So in our public spending reviews our priorities were nursery places not nursery vouchers, more teachers, more classrooms, computers in every classroom linked to the internet, a new educational maintenance allowance to encourage pupils to stay on at school and college, half a million more college and university students, a new University for Industry, so that by equipping our people with the tools and the technology of the 21st century everyone in Britain can face the future with more confidence. The new Britain, taking up the challenge of change, will also be a 'work your way up' Britain. For those entering the workforce, who have no jobs, there will be 250,000 opportunities on the New Deal. For those who lose their jobs and have to change jobs, there will be Rapid Response Assistance. For those who want to work their way up, there will be a new £1,700 up-front training grant, to match workers without skills to the jobs without workers. For those who want to start small businesses and employ people, there will be investment incentives and the lowest small business tax rate in history. Here we are, forging the new Britain: a common obligation to work, a shared opportunity to advance, the future now in the hands of the many, not just the few. The new Britain, taking up this challenge of change, will be a dynamic economy, because it will be opened up to new ideas, new technologies and new competition. We will back our scientists and our entrepreneurs. I can say that under the leadership of Margaret Beckett and now Peter Mandelson, this government will be investing an extra £1 billion in science and the commercialisation of science, to ensure that what is invented in Britain will be manufactured in Britain, too. (Applause) To back our businesses, John Prescott is creating a modern infrastructure in transport and in technology - an extra £3 billion this year in public-private partnership, and the doubling of public investment in our country. We are pursuing a new competition policy, to tackle monopolies and cartels, and any vested interests which hold back the innovation we need and so force consumers to pay over the odds. So the new Britain will have a wholly new attitude to business and wealth-creation. It will be a new democracy of ambition and enterprise, which encourages our scientists to cross new frontiers, our inventors to summon up the future, our business leaders to lead in the new world economy, with every member of the workforce given the opportunity to rise to the challenge, to raise productivity and to reach their full potential. The enterprise which every one of us has within us, the exercise of which in the 1980s the Tories wanted to be the preserve of only the few, will in the 1990s and beyond become opportunity in the hands of the many. When people ask us why Labour supports at one and the same time a pro-enterprise, pro-competition policy, and a pro-equality policy as well, as if they were contradictory, let us explain to them that in a modern economy economic success depends upon the enterprise of people, economic justice depends upon fairness to people, and both depend upon opportunity for all. So I want a Britain that is an island of opportunity, a Britain that is not divided by narrow separatism, but united by shared values (Applause) a Britain of economic progress, justice and international solidarity. These are the values on which we will campaign, we will fight and we will win, in local, Scottish, Welsh ,and European elections next year. (Applause) So let us campaign for a Britain where what matters is not where you were born, but how everyone can use the potential they were born with, a Britain where the issue is not where you come from or what school you went to, but the dreams you have and the effort you make, a Britain where everyone can work th way up free of privilege, elitism and class, so that instead of a society at whose apex still stands 1,000 hereditary peers, we build a new Britain energised by the hopes and talents of all it 58 million people. (Applause) This is the next stage of our long journey of high ideals, that we realise the potential of Britain b; realising the potential of all the people of Britain. Let us say wi confidence to the people of Britain: on every step of this journey this government will be on your side. Now this is the ideal that motivated Tony Blair and me when we first became Members of Parliament 15 years ago and we met and shared a small office in the House of Commons. It is the ideal that inspired him and our whole party in our generation to write into our constitution that wealth, power and opportunity should be in the hands of the many and not just the few. These goals are what I know I am here to play a part in achieving. These are my political ambitions, not the ambitions c office, but in the office I hold, to help fulfil our shared ambitions for our country. It is a Britain where every one of its citizens car genuinely say: "This is our country. This is what we contribute, our talent, our work, our pride, our support for others. This is our country. We are helping to make Britain the place it should be, and we will leave it a stronger, fairer, more equal country for the next generation." This is new Labour, Labour's conscience, Labour's cause, Labour's mission. Together, this can be our achievement. (Applause)

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