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Speech Archive

Chancellor's speech, Blackpool 2002

Gordon Brown (Labour)

Location: Blackpool

Having flown back overnight from Washington, from the annual meetings of the World Bank and the IMF, from our discussions among 184 countries on the global economy, let me tell you first of all that, working with Clare Short, our Labour government has this weekend led the movement for enhanced debt relief for the poorest countries.

And our proposal for an extra $1bn - endorsed yesterday with pledges and promises from 15 countries - will now help the world meet our objective to cancel up to $100bn of poor countries' debt.

And as one who has had the privilege of representing Britain and our party at meetings internationally, let me pay tribute to the commitment to this cause of thousands of Labour party members.

And let us as a party pay tribute to tens of thousands of trade unionists, church members and NGO campaigners who from Jubilee 2000 to Justice for Trade, have driven forward this great coalition for justice on a global scale.

It is because the world cannot permanently endure half wealthy and well-off, half impoverished and shackled by debt, that yesterday our Labour government also put forward in Washington a modern Marshall Plan for the developing world - a new compact where in return for developing countries tackling instability and corruption, the developed countries open up trade and double aid for health and education, so that together we will meet the United Nations' Millennium Goals: to halve poverty, cut infant mortality by two-thirds, and ensure that not just some but every child enjoys schooling.

Conference: ours is not only the first generation to live in a truly global economy with the technology and capability to eradicate global poverty if we choose. But we are also the first generation who, having escaped from the shadow of a fifty year long cold war, now confronts one of the legacies of the cold war and its end - the indiscriminate proliferation of weapons of mass destruction.

And just as we stand for a world free from poverty, we stand for a world free from fear.

It has fallen to this generation to meet the challenge of preventing the spread of nuclear, chemical and biological weapons.

Non-proliferation has been, for fifty years, a cause of this party, of this Labour movement. And how many times have we said each to the other that if only the international community could act as one, we could prevent the spread of nuclear, chemical and biological weapons across the world? That is why we should and must support the strong leadership Tony Blair has shown and the strongest message must go out to Saddam Hussein from the international community, that his actions cannot continue unchecked and with impunity.

In these times of insecurity and risk we must have the strength to take the right long-term decisions on the economy.

Japan, Asia, much of Latin America and Europe - 20 countries, accounting for half the world's output - have been or are in recession.

Ten years ago at this conference when I spoke to you for the first time as shadow chancellor I promised that if we, the Labour party, together had the strength to adopt a new long-term policy for stability and prudence, to be a party of competition and enterprise as well as fairness, we could restore not just the Labour party's reputation for economic competence but could achieve in our country the 1945 aim - which we reaffirm for our generation - high and stable levels of growth and employment.

And it is because we - the Labour party - did reject the old Tory short-termism; it is because we did not fall for the quick fixes, easy options and irresponsible short cuts, and it is because we put our faith in Labour values of economic responsibility - building from solid foundations, looking to the long term - that with Bank of England reform, hard decisions on inflation, tough fiscal rules, rigorous public spending controls, I can report to this conference, we today have the lowest inflation in Europe - the lowest in our country for 30 years - and the lowest long-term interest rates and mortgage rates for homeowners for 40 years.

Friends, we did not arrive here by accident but because together we have also had the strength to construct a new deal of rights and responsibilities that even as unemployment is rising elsewhere, unemployment in Britain is lower than at any time for 25 years, 1.5 million more jobs have been created, long term youth unemployment once 350,000 is now just 5,000 and for the first time in 50 years, unemployment in Britain is lower than in the euro area, lower than in Japan and lower than in America. Full employment 10 years ago just a dream, then an aspiration, then a commitment, can now - in our generation and time - become our achievement.

And it is because we set a long-term course, knew that public services cannot be financed on a sustainable basis if debt gets out of control and debt interest payments consume too big a share of national income, that we have now cut debt from 44% to 30%, the lowest of all our major competitors.

And we should be proud that it is a Labour government that has cut interest payments on debt to the lowest share of national income since world war one - since 1915. £9bn a year once spent on debt is now being invested in schools and hospitals.

This has been achieved not by chance but by tough choices. It is because we the Labour party together moved Britain from a country of high debt and high unemployment to a country of low debt and low unemployment, it is because we sought value for money and put behind us the old antagonisms between public and private, it is because we made the difficult decision to raise national insurance to renew our national health service, that while other countries are increasing debt and cutting spending, we can now show our prudence was for a purpose:

• Education spending will rise from £36bn in 1997 to £69bn a year by 2006

• Health spending will rise from £41bn in 1997 to £106bn a year by 2008

The biggest ever sustained increases in public investment - honouring our promises to put schools and hospitals first.

And I can tell this conference, our spending review decisions mean we are also investing record sums: Alistair Darling in transport, John Prescott in local government, Alan Milburn in social services, Geoff Hoon in defence, David Blunkett in fighting crime, Tessa Jowell in sport and the arts, and in housing - neglected under the Tories - much needed homes left unbuilt and unmodernised - investment in housing is rising from £2bn in 1997, to £6bn a year by 2006.

And it is because we are determined, through these new investments, to advance our programme of social justice and economic prosperity for all, that we will tolerate no risks with stability, there should be no inflationary pay awards, there can be no breach of our fiscal discipline, no playing politics to bypass our fiscal rules, no return to the old days of reckless borrowing unsupported by fiscal prudence.

Friends a decade into this journey we have indeed reached a unique moment in our history as a party and a country.

Let us remember that while all past Labour governments were forced to retrench, cut back, and were overwhelmed by world conditions in 1924, 1931, 1951, 1967 and 1976, it is because we painstakingly built the foundations in economic management that we are the first Labour government with the strength to be able to plan for the long term on the basis of stability not stop-go.

And we are the first Labour government as a result with the strength to be able to match our historic aims as a party with long term spending plans to meet them.

And this gives us an opportunity denied every previous generation.

We have never sought stability, employment and public investment just for their own sake but in the service of a higher cause.

For conference: great political parties exist for great public purposes.

Here in this party we know the high ideals - public service, justice and equality, internationalism - that created our movement, that brought us into politics, that call us to build a different kind of Britain.

And we do not forget where we have come from, the people we seek to serve and with whom and for whom we stand as one.

Every time an unemployed teenager, written off under the Tories, finds a job under Labour, it is a victory not just for them, it is a victory for our values. Every time a 16 year-old stays on at school because of the help we are giving, it represents not just a personal victory for them but a victory for our values. Every time a young child is lifted out of poverty, every time a parent is able to make choices that allow them to balance work and family, every time a pensioner, who once went without, secures dignity in retirement, every time our public services strengthen our communities, it is a victory not just for them, it is a victory for our values.

But as long as one unemployed person is unfairly denied a job, as long as prosperity bypasses a single community, as long as one young student is denied a place at university not because of their ability but because of their background, as long as one child or one pensioner is condemned to a life of poverty, we are not satisfied and our ideals must drive us forward.

And friends, five years in government have taught me that:

Yes we must be pragmatists .

Yes we must be realists.

Yes we must be credible.

But, when in communities right across this country I see wrongs still to be righted, injustices still to be remedied, unfairness yet to be rectified, enduring poverty that still scars our nation's soul, let me tell this conference - five years in government have not dimmed our idealism - they have made us more idealistic than ever and more determined to turn our ideals into achievements.

Now is not the time to stall or be content, but to demand more of ourselves and to dare to dream that - month by month, year by year, brick by brick - the ideals that brought us into politics can, in our generation, be made real.

Our mission is not just 1.5 million more jobs so far, but full employment for a generation, not just in one region of our country but in all regions and nations of our country.

Our mission is not just more spending on education but ensuring that no one is left out and for everyone at every age the doors of educational opportunity are open wide.

Our mission is not just 1 million children already lifted out of poverty, but an end to child poverty and a guarantee that every pensioner has dignity in retirement.

And our mission is not just better public services, but the best public services - making the NHS not just free at the point of need but of such a high standard of service that for all British people the NHS is the best insurance policy in the world.

A great Britain great again because of the greatness of the opportunities and security enjoyed not just by some, but by all.

So let me set out the next steps in our economic policy.

First, employment and enterprise.

The old idea was that you got full employment from a small number of large companies.

Today, full employment needs a large number of small companies creating jobs.

Yet think of the inequalities across the country.

For every three small businesses creating jobs in the best-off areas, there is just one, creating far fewer jobs, in the poorest areas - and as every council or knows - this means reduced income for services and yet more social problems public services need to fund.

So one of the best anti-poverty pro-jobs programmes is to help more people start more small businesses, and ensure that access to capital, advice, skills - once restricted only to an elite - is opened up to men and women in every part of Britain.

So working in partnership with local authorities and regional development agencies we will designate 2,000 new enterprise areas; not the old failed enterprise zones of the 1980s where property subsidies diverted large businesses from one area to another, but 2,000 new enterprise areas that encourage home grown economic activity by cutting the cost of starting up, investing, hiring, managing the payroll, eliminating stamp duty, making it easier to start and grow a business and create new jobs.

So because enterprise is not just an engine of wealth creation but an engine of opportunity for all we must as a party modernise our attitudes to enterprise. Let our party be the pro-enterprise as well as the pro-fairness party: Labour, the party of small businesses and the self employed in Britain just as much as we have always been and are the party of employees.

So today, Patricia Hewitt is working with business to open up competition and is investing a billion pounds more in British science and innovation to build modern manufacturing strength;

Estelle Morris is rapidly expanding modern apprenticeships from 75,000 to 300,000;

John Prescott and Margaret Beckett are driving forward regional economic regeneration in urban and rural communities;

Andrew Smith is tightening up the New Deal so with new rights and responsibilities the long term unemployed will be offered jobs they must take; And he, David Blunkett and I are expanding work permits into our country from 45,000 to 175,000 - recognising the economic and social benefits of managed legal immigration showing that we are a tolerant, internationalist people.

Labour values which make us also determined to be at the centre of Europe and which lead us to support:

Economic reform in Europe so British business and British consumers can benefit from a European market

Reform of the common agricultural policy so that we can end the evils of agricultural protectionism

A social chapter so that the single market has a social dimension for employees

And the principle of the single currency that could cut transaction costs lower interest rates and expand our trade

And it is the same enduring Labour values that led us to set the five economic tests on the euro; tests which demonstrate the central importance of economics to our decision: tests on how we can secure high and sustained levels of investment and growth, advance towards full employment and to a prosperity that is not only shared but sustained.

If the five tests are met, we will recommend joining the euro, and the final decision will be put to the British people in a referendum.

And I give this commitment: nothing that is proposed will put our pro-European, pro-growth, pro-investment, pro-employment, values at risk.

Conference, while the Tories want to cut investment in education, as in every major public service, we know that in the modern economy we cannot afford to waste the potential of a single child.

So as Estelle Morris has announced, investment per school pupil will rise from just £2,500 a year under the Tories to by 2006, twice as much - £5,000 a year.

10,000 more teachers, 50,000 more classroom assistants, 20,000 schools rebuilt. Not just for every four year old but for every three year old, the right to nursery education.

And the reason I, along with Estelle, have long been concerned about too many teenagers leaving school early, too few going on to university and college, is that I remember my friends at school with me. They worked hard, They did well, but when school ended, few of them could them could go to university. It was a scandal of wasted potential. And I remember as a university lecturer when just 20% of school leavers could find a place in university. It was a scandal of wasted potential then and it is a scandal of wasted potential now.

For when today 80% of the sons and daughters of professional classes rightly enjoy higher education, yet only 14% of the sons and daughters of unskilled workers do, it is both right for our economy and for social justice to widen opportunity, so that not just a minority but a majority of young people have, for the first time, the chance of university, and no one should be denied education for lack of income. And it is time to champion that modern Britain where what matters is not your birth and your background, but your ability and potential.

That is why to improve school staying on rates, Estelle and I have set aside public money to expand for lower income families student grants - educational maintenance allowances, worth up to £1500 a year.

So too it is time in higher education to hear what students and parents everywhere are saying. As we examine the problems of student loans and fees and look at experience in Scotland and Wales, Estelle and I want to apply to higher education the same test: that all - and not just those who can afford it - have the chance to make the most of their talents.

It is time, in short, to champion a modern Britain where what matters is not where you come from but what contribution you can make.

Opportunity for all through high standards in education; opportunity for all through modernising the welfare state.

Conference, when the working families tax credit was introduced we ran as a party a nation-wide take-up campaign so that instead of 800,000 on family credit, there are today 1.3 million families better-off by an average of £40 a week.

And from next April, nearly six million families in Britain will be entitled to receive the new child tax credit, and the poorest families who used to receive for the first child just £28 a week will receive £54 a week.

I ask you to help us again publicise in every area not only the new child tax credit but also the new working tax credit that, building on the national minimum wage, guarantees a one-income family a minimum income of £183 a week.

So with these new tax credits - helping all families, but helping those who need it most - we are building a modern welfare state for our time and our generation.

That is why our reforms are raising maternity pay and extending maternity leave, introducing for the first time paternity pay, doubling funding for childcare, helping mothers have the choice to stay at home when their children are young, parents to work part time as well as full time, and to balance work and family life more successfully.

Andrew Smith publishes in the autumn his plans for better provision for the pensioners of tomorrow, and we will for today's pensioners introduce from next year: the pension credit worth up to £14 a week, raised in line not with prices but with earnings, rewarding not penalising pensioners for their savings; the minimum income guaranteed at £100 a week, rising this parliament in line not with prices but with earnings, and I can tell conference and Age Concern who asked us this morning; with these measures our aim is to end pensioner poverty in our country.

For our elderly and indeed all who depend on the NHS, in the budget I told the country plainly and directly that it was right to raise taxes - to increase national insurance by 1% - to pay for the biggest expansion in NHS funding and reform since the NHS was established more than half a century ago.

10,000 more doctors, 20,000 more nurses, 40 more hospitals.

We have raised taxes because the case for the NHS is not weaker but stronger than in 1948, stronger because today's treatments and drugs are so much more expensive that without an NHS one family suffering one illness could face bills of £20,000, £50,000 or even £100,000 or more.

And because none of us can ever know in advance whether you or someone in your family will need that expensive care, the best policy is not a private insurance policy that by definition relies on ifs, buts and small print and only covers some of the people some of the time.

The best policy is an insurance policy that covers all of the people all of the time: and that is the unique vision of the British NHS free at the point of need offering such a high standard of care that it can become for British people the best insurance policy in the world.

The NHS is a great British ideal. And in the budget we as a government agreed reforms to renew the NHS as a great British institution, with new incentives, five-year budgets, better staff conditions, action to turn around failure, rewards for high performers through foundation hospitals fully part of the NHS: local freedoms empowering public servants - men and women who believe in the ethic of public service - to make a difference for patients all across Britain.

Because we recognise that just as public services fail the public where there is underinvestment, under capacity and bad workplace conditions, so too we can fail the public if service is poor, local innovation is stifled, if user is posed against producer and the ethic of public service is undermined.

And we must always remind ourselves that hospitals exist for the patient, just as schools exist for the pupil and public services exist for the public who are served.

Conference, when we came to power half our hospitals wards were wards built in the days of charity hospitals, and hundreds of our school classrooms were crumbling, built before the Boer War. Since 1997 we have started or completed 100 new hospitals - 40 finished, 60 on the way - and 550 schools, as we double public investment from £22bn to £44bn - the biggest programme of peacetime public investment in Britain's history - and not private money replacing public investment as under the Tories, but private money additional to public investment, helping us to provide in constituencies that desperately need them schools and hospitals that I have to tell you but for PFI we simply could not have started so many so quickly in so many communities.

And of course, as John Prescott explained, it is right that as a party we continue to discuss the detailed issues.

But I have to point out that there are already independent reviews by the national audit office into every major PFI project, with 25 already published; that for contractors that used to build the hospital and walk away, often leaving shoddy work, the purpose of PFI is to bind them in to value for money, so that they - and not the public - bear the costs of flaws failures overruns and delays, but most important of all because I know all of us gathered here care passionately about public services, I say to you directly - having promised to the people of this country - kept waiting for schools and hospitals for 18 years under the Tories - that we would build schools and hospitals.

Having promised at the election that we would put schools and hospitals first, we must keep our promise to the people: it is our duty to deliver. When the plans are drawn up, the building workers are there, and the money provided, the public will not tolerate delays.

It is, friends, a question of trust and with promises to keep and fiscal discipline to maintain it is my duty to say to the British people that we will hold to our long term course for building schools and hospitals so that every community has the high standard of public service they need and deserve

And whatever our disagreements on the details of PFI let us remember that PFI is private money being used to build hospitals to deliver a public service - and there is a world of difference between using private money to rebuild the NHS for the long term interests of the many - and the agenda of our opponents designed to undermine the NHS in the short term private interests of the few.

Conference, because we the party who created the health service, believe in the health service we will hold to our long term course in resisting Tory privatisation.

Be under no doubt that as the Tories meet in Bournemouth next week that Mr Fox, their health spokesman, now talks openly about plans to break up the NHS.

Just as in the 1940s, when Labour defeated the Conservatives and created the NHS, this public service - a free health service free at the point of use, based on need not ability to pay - is again the great dividing line, the great issue of principle between ourselves and the Tories.

And so having asked people to pay more taxes to fund better health care in the public sector, it is and will, in the years to come, be our duty, in every constituency and workplace, to expose and oppose the waste divisiveness and inequity of the Tory party turning our NHS hospitals into privatised companies with new charges vouchers and thus two tier health care.

This is a fundamental issue for our society in this generation.

And we will make it the central issue in every election until the Tories once again are forced to admit they are wrong, that health care is a basic human right not a privilege to be paid for.

And what we say and do about the NHS is not just about the future of our public services, but about the character of our country. It is an affirmation that duty, obligation, service, and not just markets and self-interest, are at the very heart of our idea of society - at the heart of what it means to be a citizen of Britain.

I have seen the irreplaceable skills of doctors and nurses.

I have seen the staff of the NHS who show not just skill and expertise but love, care and friendship.

I know home helps and carers, who can transform despair into hope.

I know teachers with the extraordinary power to make a lasting imprint on a young child's life.

All of us know such people by name.

For them, public service is a calling not just a career, far more about service than about self-interest. If we ever lose that ethic of public service, then we lose a part of what is unique about Britain that could never be replaced.

So we must have the confidence and leadership not just to renew our public services, but to renew the idea of Britain as more than the sum of private ambitions or a collection of isolated individuals, but a community of citizens who each owe obligations one to another.

So let us as a party look ahead to building a progressive consensus for full employment, education and enterprise open to all, ending child and pensioner poverty, the best public services.

And just as many of us will look back, as I do, and recall that so many of the opportunities we have enjoyed - the best schooling, the best of health care when ill, for many of us the chance of university - owe their origins not just to the achievements but to the scale of the ambitions of the 1945 government, whose determination not just to change policies but to change life chances, transformed our shared sense of what it meant to be a citizen of Britain.

And just as so many of that great generation look back and say with pride - I was there when the welfare state was created, I was there on the first day of the NHS, so too let us act now with boldness and resolve so that when the dust has settled, the history books are written, the debates, the arguments, the personalities are long forgotten, when people ask of us, what did we do - how did we use the potential of government - to advance economic prosperity and the good society.

We can look back with pride and say each to the other:

I was there when, together, we reached full employment

I was there when, together, we rebuilt our health service

I was there when, together, we abolished child poverty and opened the doors of education to all

I was there when, together, we ensured every pensioner dignity in retirement.

And then each of us will be able to say:

This is our country

We built it together

A great British society

By our values and our vision we made it better.

Yes - great political parties exist for great public purposes.

Now let us fulfil our mandate and our mission.

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