英國首相布萊爾00系列演講之77

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Today I want to set out the challenges facing Britain, and the big choices the country faces about how best to meet those challenges.
    Everything we do has a simple aim: to make the lives of hardworking families better. To give everyone, not just the privileged few, security and peace of mind but also new opportunities to fulfil their potential.
    Britain can boast many strengths. Firm economic foundations. Some world class companies, scientists and thinkers. The language of the internet. The richness of our culture and heritage. We are radical, innovative, resilient, tolerant, fair. We are now today, the fourth largest economy in the world, a remarkable achievement for an island nation of 60 million people.
    But any analysis of the challenges facing Britain must acknowledge: though we have world class companies, we need more. That whilst there is progress in education, we have too many schools which could be doing much better. Though the vast majority of our people are decent, law-abiding people, we have a drugs crisis in our country that accounts for a third of all property crime. We see many strong communities getting stronger, but equally many communities shattered by violence, intolerance, racism, people's lack of respect for each other. Though there is rising prosperity, there remains too much poverty.
    Here in the North East, we have an economy growing and adapting well to changing circumstances, and we are seeing real improvements in crime, education and health. This is confirmed by the report being published today by the Government Office for the North East. But it also shows that we continue to face major problems of social and economic disadvantage. As a North East MP, I am determined that government policy will continue to address these problems.
    So whatever progress we have made since May 1997 - and I am proud of our record, on the fundamentals of the economy, jobs, investment and reform in our public services - I am the first to say that there is a huge amount still to do if Britain is to become the country it has the potential to be. The question is how, and who, to do it.
    We live in a parliamentary democracy. In the first period of this Government, we were operating in an unusual set of circumstances. Radical change was being driven through with barely a murmur from an Opposition flat on its back trying to come to terms with a majority of 179 against them.
    Now they are trying to get themselves noticed more. They are making policy decisions, and that is a good thing, because it allows the country to focus on the big choices that will decide our future. As they do, I believe people will see that when you judge record against record, policy against policy, instinct against instinct, we are making the right choices on the things that really matter. In politics, the question is never: can the Government do everything, but is the Government delivering what it said it would, and does the Opposition provide a better alternative?
    So the challenges:
    * to build on those solid economic foundations a more vibrant, more productive world class economy.
    * To move to full employment.
    * To deliver excellence in all our schools.
    * To rebuild the NHS as a high quality service on which everyone can rely.
    * To modernise our welfare system so that there is work for those who can, dignity for those who can't.
    * to ensure that all regions share in the nation's rising prosperity.
    * To abolish child poverty in a generation.
    * To ensure that our pensioners share in the nation's rising prosperity.
    * To rebuild our families and communities by giving leadership on crime, and give our young people a sense not just of their rights but of their responsibilities too.
    * To give leadership in the world, and develop Britain as a leading player in Europe and the world.
    So they are the challenges. And these are the choices people have to make:
    Stability or boom and bust;
    Full employment or mass unemployment;
    Investment or cuts;
    Strong communities or the belief that there is no such thing as society;
    A government on your side, or a government that leaves you to fend for yourself.
    Leadership and influence or weakness and isolation.
    In the coming months, I will be making speeches on each of these big choices. Today I want to focus on the most important choice of all: the economic choice.
    In a few day's time, Gordon Brown will be publishing the pre-Budget report. It will show that because of decisions taken, and choices made, the economy is strengthening. I want to set out the economic story of the parliament so far that got us to the good position we are in.
    Inheritance
    We inherited an economy, contrary to the mythology of our opponents, with many weaknesses. There were changes made in the 1980s that we have kept; some we've even built on. But, in May 1997, the country was heavily in debt. Inflation was returning. Business confidence had been battered by recession. Hard working families had been hurt by high interest rates, unemployment, house repossessions.
    When our opponents pretend ours was a golden economic legacy, a rosy economic outlook, I say: there was nothing golden about the security of a home becoming the worry of negative equity or the drama and pain of a home repossessed. Nothing rosy about a government paying out in interest payments on debt more than we were paying for the entirety of our schools programme, which was the reality of the situation we inherited. Nothing rosy about Britain's productivity gap with all our major international competitors, or about the 7 million adults left to fend for themselves without even the most basic literacy and numeracy skills.
    Tough decisions
    We vowed to deal with that inheritance in a serious and systematic way. Taking any tough decisions needed for a single purpose of delivering long term prosperity for Britain's families.
    Because so little was made of it at the time, people forget that in coming to office we introduced, literally, a revolution in economic management. Our aim was to defeat the age-old British millstone of boom and bust, periods of high growth followed by recession, that had given us high interest rates, low investment and a perpetually devaluing currency, as the sole means of enhancing competitiveness.
    The revolution consisted of two steps. First, we gave the Bank of England independence, to produce stability in monetary policy. Second we introduced new fiscal, spending rules which we enshrined in statute that keep Government to tight financial discipline.
    Both steps were choices. Both opposed. Both were hard, because they meant for the first two years we were very tight on spending, despite the pressures. Both have been proved right and together they are the foundation of Britain's strengthening economy.
    By May 1997, borrowing had risen sharply and the national debt had doubled. We have cut borrowing by over ??45 billion in our first three years and cut the costs of social and economic failure. But again it required tough decisions. And as we have said many times bluntly and honestly it did require some unpopular decisions like raising fuel duties in the first couple of years.
    It was hard to look at the under-investment in Britain and not be able to address it all overnight; to look at the neglect of our public services and still say you will have to wait until we are strong enough to invest. That was probably the hardest thing of all. It meant saying to the NHS wait a bit longer. It meant saying to teachers and pupils, the money will come but please be patient. We have taken a lot of political flak for our approach. But again I believe it was right to take that approach, sort out the public finances, lay the foundations so that spending on public services is not subject to the same stop go as the economy. Recently announced increases mean education spending grows at an average real rate of 6.6% over 4 years - the highest growth rate over a four year period of 20 years. Budget 2000 announced an unprecedented increase in NHS UK funding of 6.1% a year, over twice the average rate under the last Government.
    Norman Lamont used to say long-term unemployment was a price worth paying. I say short-term unpopularity is a price worth paying if it leads to long-term prosperity for Britain's families.
    Results
    And those early decisions are paying off.
    Underlying inflation in August was the lowest it has been for over 25 years. Long term interest rates are, for the first time in my adult life, level with Germany. And they are below France, Italy, the US and Canada.
    Living standards are rising.
    The average mortgage is 6.9% not 10 or 15%, a saving for the average mortgage holder of ??160 per month.
    ??3 billion a year saved on social security benefits - as we've cut the costs of economic failure. ??4 billion a year saved as we're spending less on debt interest.
    Tough choices. Yielding real results.
    And those tough decisions have led to another result -falling structural unemployment.
    The New Deal, fought by those who opposed the windfall tax on the privatised utilities, has contributed to the halving of long term unemployment. It has been part of the reason there are one million more jobs today than in 1997.
    1 million people with a reason for getting out of bed in the morning.
    1 million families with a better standard of living.
    Millions of children with parents in work lifting them out of poverty.
    All because we are getting the fundamentals right. Because we made the right choices and stuck to them.
    And that platform of stability, the reduction in government borrowing and cutting the costs of social and economic failure mean that we are now able to make the investment needed for greater prosperity.
    Tax
    What is more, we are doing all this whilst maintaining lower taxes than any major industrialised nation in the world apart from Japan and the USA. So while petrol taxes may be higher here, the taxes overall in France, for example, are 10% of GDP higher, the equivalent of ??90 billion a year - more than enough to remove duty on petrol altogether. But I do not believe people want French income and business taxes.
    The OECD figures published overnight showed Britain has lower income, business and VAT rates than any other major European economy. Indeed, overall taxes are lower than any other comparable European country, which is one reason why we will oppose vigorously any attempt to remove the veto on harmonising tax rates across Europe at the forthcoming Nice summit.
    Taxes on personal income are lower than the EU average. Someone on ??20,000 a year would pay income tax at 22% in the UK, 39.5% in Italy, 43% in France.
    Investment
    Britain, I am in no doubt, is an under invested in country.
    I travel the country and I see our public servants doing a great job in difficult circumstances. That is not good enough for me, for them, for Britain. The circumstances in which they work have to improve.
    Here we are, 21st century Britain, do we need more doctors and nurses? We do. Do we have classrooms that are short of books, schools that are short of teachers? We do. Do we need more trains, more buses, do we need them to be safer, cleaner, more reliable? We do.
    It won't happen by chance. It will only happen if we choose to make it happen. If we choose to invest. Invest for prosperity. Invest not just to build a decent society but to further economic growth and productivity. Invest for prosperity. That is my choice for Britain. Investment. Which is why we are:
    * allocating 75% of the increases in spending on public services to our priorities - education, health, transport, housing and law and order.
    * providing a record 5.4% above inflation increase in UK education funding on average over next three years - more than three times the average growth of the last Government.
    * increasing direct payments to schools next year and every year until 2003-04 for teachers, books and other equipment to ??20,000 for a typical primary school and ??60,000 for a typical secondary school.
    * doing more to achieve full employment by making the New Deal a permanent deal and extending the ONE service to ensure benefit recipients receive better and more work-focussed service.
    * doubling public investment in transport to over ??6 billion a year to tackle congestion and improve public transport.
    * Putting in place the longest period of sustained growth for the NHS in its history with an average of 6.1% real terms growth to 2003-2004 - more than double the rate under the last Government.
    * Providing resources for a further 4,000 police recruits, bringing the total to 9,000 extra recruits over the next 3 years to cut car crime by nearly a third and burglaries by 25%.
    And because of our economic decisions the resources we have will be spent better today than before. From 1979 to 1997, rising debt interest, unemployment and social security accounted for 42% of the rise in public spending. In the coming three years, unemployment, social security and debt interest will account for only 17% of the increase in public spending during this period.
    That is a huge shift in priorities from waste and failure to the priorities of the nation: a country at work; a country confident because it can plan for the future; a country building better, stronger public services. And all money spent will be subject to rigorous public service agreements setting our the targets and the conditions on which that money is allocated.
    Not luck but judgement
    So we are putting in place slowly but surely a virtuous circle of stability and investment and as a result growing prosperity.
    It is happening not through luck or chance but by judgement.
    Our opponents have made their own different judgements this Parliament.
    Judgement one. They opposed independence for the Bank of England.
    Judgement two. They opposed our spending plans in the comprehensive spending review of 1998 calling them reckless and irresponsible.
    Judgement three. They opposed the New Deal -the special help for the long term unemployed.
    Judgement four. They forecast a recession which they said was made in Downing Street.
    Judgement five. They said in all circumstances income tax should be cut over a Parliament even if it results in cuts to public services, or higher inflation and mortgages.
    Judgement six. They said that was not their policy any more but were still pledged to spend less than the growth of the economy -which amount to ??16bn of spending cuts.
    Judgement seven. They said in July that our second spending review was unsustainable.
    Judgement Eight. They now say that in fact they will try and stick to these "unsustainable" spending plans for the first year. Which means they will need to find ??16bn of cuts over 2 years not 3; and they say that in exceptional circumstances they would take back control of interest rates from the Bank of England.
    Those are the eight key economic misjudgements of our opponents so far. Ideology and short term political advantage always put before setting out
    a long term, sustainable economic case. A reckless pursuit of short term political advantage at the expense of long-term economic credibility.
    The choice
    But now is not the time to throw away what we have begun. Now is not the time to return to boom and bust. Or to make mortgages subject to political whim again. Or to scrap the New Deal. That would not help Britain's hard-working families.
    The choice now as we approach the Pre Budget Report becomes clearer.
    Do we build on stability or knock the foundations away? Do we blow the surplus we have built, and so risk inflation and interest rate rises?
    What is urged upon us now is an identikit replica of the policy that led to the recessions of the early 90s.
    A surplus is taxpayers' money, goes the argument, so give it all back. The first bit of that is obviously true. All money raised comes form hard working families and businesses and every government has a duty to spend it wisely. That is why - as the OECD's new figures demonstrates once again, we have worked hard to ensure that Britain has the lowest overall tax burden of any major EU country. But having worked so hard to remove the deficit we inherited and get debt back under control to now blow the surplus and make no provision for the future would repeat the mistakes of the late Eighties and early Nineties. And although families remember the pain it is obvious that some commentators and politicians have forgotten the policies that gave rise to that pain.
    The misuse of a budget surplus. The belief that inflation was licked. Cutting interest rates as the country was moving towards a boom in 1987. Cutting taxes at the height of the boom , stoking up demand in the mistaken belief there had been an "economic miracle". Putting tax cuts ahead of investment in the public services with adverse long term consequences. Spending what we have not yet earned. Big mistakes made by the last government who, now in Opposition, want to repeat them.
    A heavy price was paid for those mistakes. For business, for families, for employment, for higher taxes, for public services.
    The tax cuts of the late 80s proved unsustainable: it all ended with 22 tax rises in the recession that followed. Macro instability meant businesses not investing in new equipment, skills, research and development. It meant government cuts in investment in education, health and transport.
    And as a result, because the productive capacity of the economy was never expanded, regions, businesses, entrepreneurs were never given the support needed to build up the long term growth of the economy.
    The facts speak for themselves: In 1988/89 the previous government ran a fiscal surplus of 1.4% of GDP. By 92/93 that had turned into a deficit of 7.8% of GDP, a massive turnaround of almost 10% of GDP in 4 years.
    So it is right to build in a margin of uncertainty into our plans. Economic stability is a war of attrition. It is a constant fight over many years. One cycle without recession does not mean the next economic cycle will be the same. One or two years of steady growth does not mean the next years will be unless they are worked at, unless stability is locked it for the long term.
    Short term consumption should never be given priority over long term economic strength. I want people to feel better off not just in five days time but in five years time.
    Our job is to balance the competing interests. Investing in public services. Help for pensioners. The concerns of motorists. The needs of homeowners. Most of all the long term strength of the economy.
    We are listening to all those groups. Not just those who shout the loudest but those who have the best case.
    In each person in the country the dilemmas, the choices that face the government are played out in microcosm. For millions of us are both motorists, and homeowners. We want cheaper fuel but we want cheaper mortgages too. Millions of us also have elderly parents or grandparents. We want lower petrol duty for ourselves. But we want bigger pensions for them.
    But millions of us know that in the end a boom and bust economics does the most harm to our way of life and that no government should take a risk with people's jobs or living standards.
    There is a lot more work to be done. We do not proclaim economic miracles. But we do say we have made a start. Now we have to take the next steps forward and not return to the mistakes of the past. We need to raise growth, to raise living standards further, and to begin to close the productivity gap with our international competitors. Most of all to spread the fruits of economic progress to all parts of the country, and all people within Britain.
    We need to remove obstacles to enterprise and entrepreneurship in all parts of the country; to increase competition; to address the scandal of adult illiteracy and raise educational standards for all. Above all we need to continue to reverse decades of under-investment - in both the private sector and the public.
    These are deep-rooted problems - long term challenges that cannot be solved in a year or two.
    But one thing we will never do is take risks with the economy.
    Economic stability matters because boom and bust tears apart the building blocks of family life a secure home, a secure job, a regular income - the ability to provide for your children.
    Today Britain faces the clearest possible choice of direction.
    Stability and high levels ever of employment, or a return to boom and bust and 3 million unemployed.
    Investment in our public services or ??16bn of cuts.
    Helping for the poorest families or cuts to the new deal, to the working families tax credit and even to free television licenses for the over-75s as our opponents now propose.
    What we are putting in place is that certainty, low inflation year after year. Low mortgages. Sustained jobs in all parts of Britain. Businesses able to plan ahead and so grow and thrive.
    Nothing we do will put that at risk.
    Next Wednesday when the Chancellor stands up to deliver his Pre-Budget statement long term economic stability will come first, second and third because British families will come first, second and third.