Michael Howard – 2004 Speech to the North East Business Awards in Sedgefield

The speech made by Michael Howard, the then Leader of the Opposition, at the North East Business Awards held in Sedgefield on 20 May 2004.

Steve, thank you for that kind introduction.

I am very flattered to be asked to speak to you here tonight.

These business awards are among the most prestigious in the country. I want to take this opportunity to congratulate Steve Brown, The Journal and The Evening Gazette for organising such a spectacular event.

May I also take this opportunity to congratulate Durham County Cricket Club for producing the great wicket taker Steve Harmeson, Middlesbrough, for winning the Carling Cup, Sunderland for coming so close to promotion, the Newcastle Falcons for winning the Powergen cup and Newcastle United for winning a place in the UEFA cup – and as a Liverpool fan I’m bound to add that it is the UEFA cup and not the Champions League.

I am very proud to be standing here before all of you, and not just because of your sporting success.

I’m proud to be here to celebrate your business success as well.

Proud and full of admiration.

Admiration because it’s the people in this room who create the jobs in this part of the country; the people in this room who generate the wealth that pays for our public services; and the people in this room who open up the opportunities that make the North East such a vibrant place to do business.

Tonight I’m in Tony Blair’s constituency.

That’s a great honour.

The Prime Minister is coming to this hotel at the weekend and the security is already tight.

I was lucky to get in.

After he hears what I have to say, I may be even luckier to get out.

Before coming here, I read a speech Tony Blair gave at the Teesside awards in 1996, before he became Prime Minister.

He told the audience that night that what had happened in the North East in the thirteen years since he had become a Member of Parliament in 1983 was “one of the unspoken miracles of economic development, really anywhere in Europe”.

He went on to say that the North East “has been regenerated to a degree that I think, certainly, those twelve or thirteen years ago, when I first became a Member of Parliament for Sedgefield, [I] would have found it difficult to believe”.

It’s good to see that some times politicians are prepared to give credit where it’s due.

The North East faced huge problems in the 1970s and early 1980s. It had relied too much on heavy industries that had failed to remain competitive. And not enough had been done to prepare for the challenges of the global economy.

But thanks to the efforts of the people of the North East, including many of you in this room tonight, the North East did perform an economic miracle. From the domination of the local economy by coal, ship building and engineering, we now have a more diverse economy, with successful world-class companies in financial services, software development, chemicals and genetics, as well as a huge range of other businesses.

The Conservative government of the day helped significantly not only by giving direct regional assistance, but by lowering taxes, curbing the power of the trade unions and making Britain as a whole much more competitive.

That Government helped establish the framework which allowed people here to seize new opportunities. In a sense, that is the role of politicians. We have long moved on from the idea that we can pick winners or micro-manage every last dot and comma. What we do best is to set the right overall conditions and then, as far as possible, get out of the way and let you get on with it.

The North East has a dynamic economic and cultural heritage. It’s a place which has seen the birth of countless inventions from the humble matchstick to Stephenson’s Rocket. An area from where Captain Cook sailed to discover Australia and from where Newcastle’s Jonny Wilkinson flew to defeat them.

At the beginning of the twenty-first century, the North East has fresh challenges ahead. We cannot, in a global economy in the twenty-first century, afford to be complacent. And it is up to us, the politicians, to ensure that we put in place the right policies and the right framework to help you compete.

Let me, then, tonight, tell you the approach a Conservative government would take if we win the next election.

First, the economy.

Tony Blair praised the achievements of the last Conservative government here in the North East. So let me return the compliment to him – and his Chancellor Gordon Brown – for the decision to give the Bank of England independence. It was a necessary further step to provide macro-economic stability for the British economy and it has certainly proved its worth.

Nevertheless, while I do believe that is a significant achievement, I also believe that that success has to some extent concealed the damage that is being done by over-taxing and over-regulating the British economy.

Over the last few months, as part of a concerted campaign to listen to and hear the views of business, I have talked to all the major business organisations such as the British Chambers of Commerce, the Institute of Directors and the CBI, and I have talked to business groups in Birmingham, Manchester, Leeds, Bristol, Edinburgh, Glasgow and many other of the country’s major cities.

Over and over again, I’ve received one message loud and clear.

The job of running a business in Britain is getting tougher – much, much tougher.

I know that this is a message you want to get through to Tony Blair. Sadly, at the end of last year, North East business leaders were excluded from Labour’s Big Conversation with the Prime Minister.

But The Journal carried your message, which is echoed by your colleagues all over the country: the Federation of Small Business wanted to tackle him on “the increasing burden of red tape on small businesses and the spiralling numbers of attacks on shopkeepers”. The CBI wanted to tackle him on “over-regulation, heavy taxation and all things which are gradually eroding our position in the market place”.

I share those concerns.

The burden of regulation on business is, in my view, approaching crisis point. It is eroding the ability of business in the North East to compete. The costs involved can mean the difference between winning an order and losing it.

Labour are now bringing in 15 new regulations every single working day – 50 per cent more than when we were in office. The British Chambers of Commerce say that regulation has so far cost £30 billion and is a “millstone” round the necks of British business.

Taxes on business are a cost on your business as well – a very big cost. The tax burden on business has grown substantially in the last seven years. It is estimated that the cumulative amount of additional tax paid by business since Labour came in amounts to some £54 billion.

And most independent commentators now predict that taxes are likely to rise again if Labour win a third election. That’s the view, among others, of the IMF, the Institute for Fiscal Studies and the ITEM Club.

We’ve done our own calculations on how much Labour’s Third Term Tax Rises would cost. To cover the black hole in the Government’s borrowing they will have to bring in tax rises equivalent to £900 a year for somebody on average earnings.

That will make our economy even less competitive. We have already slipped eleven places in the world competitiveness league, from fourth to fifteenth, since Labour came to office. We cannot afford to fall further.

There is another concern. In just over five years, the number of public sector jobs has risen by more than 500,000. Yet last year, jobs in the private sector fell – by 130,000. In manufacturing, as Larry Elliot pointed out in The Guardian this week, more than 750,000 jobs have been lost under Gordon Brown. Under Kenneth Clarke, 200,000 jobs were created in the sector.

This mismatch is unsustainable. How can we possibly continue to afford a public sector which is growing, when the private sector, which pays for it, is shrinking?

So what is the Conservative solution? It’s all very well to criticise. But what would we actually do that is different?

Let me tell you. We have a three-fold approach. We need to reduce regulation. We need to get a grip on public spending. We need to cut back on waste.

First, regulation. On day one a Conservative Government will freeze civil service recruitment, which is currently running at 511 new officials a week. That alone will mean fewer officials to dream up regulations. But that is only the start.

We will ensure that the total regulatory burden imposed by government falls each year. We will introduce sunset clauses in new regulation. And like America, we will exempt small firms from a whole raft of regulation.

A Conservative government will ensure that, over the medium term, while public spending will continue to grow, it will grow less quickly than the economy as a whole. That is the only way to avoid Labour’s Third Term Tax Rises and over time to reduce the burden of taxation.

Low tax economies are the most successful economies. They create more jobs, they attract more investment and they generate the resources to pay for the public services we all use.

Third, we will cut back on waste. We’ve appointed David James, the trouble shooter brought in by the Government to sort out the Dome, to highlight where the Government is wasting money – and how the Conservatives can cut it out. He is supported by 45 advisers from the world of business, who are giving their time and expertise to help us tackle this problem. He’s already identified £20 billion worth of waste, and he’s only looked at three Government departments so far!

If you’ve got examples of pointless red tape or extravagant Government waste, please get in touch. I’d very much like to hear from you – just write to me at the House of Commons.

Of course, not all the burdens on business I have talked about come from Britain. The single most expensive regulation for British business in the last few years has been the Working Time Directive. According to some calculations, it has cost business more than £10 billion – so far. Even the French government now acknowledges it has been a brake on their economy.

More than 40% of new regulations start in Brussels. Regulations such as the chemicals directive which could harm so many businesses in Teesside.

Be in no doubt – if Europe were to adopt the proposed European Constitution that burden will go on rising.

The Constitution, for example, incorporates the Charter of Fundamental Rights. The rights under the Charter are loosely drafted. They include the right to strike, the right to so-called social protection, and the right for workers to have information and consultation within business.

It will be up to the European Court exactly what these rights mean in practice. And if past experience is anything to go by, they will lead to yet more burdens on business – burdens British politicians would be powerless to stop.

The European Union has achieved a great deal. Together we have created a single market of 450 million people. We have brought into the European family eight countries that just two decades ago lived under the yoke of Soviet oppression.

But that should not blind us to the fact that the EU is failing to face up to the realities of the twenty first century.

If the Constitution is passed, it will mean business as usual for Europe – greater centralisation, more regulation and less flexibility. It is the exact opposite of what Europe really needs. Far from solving problems it will create yet more.

Conservatives have an alternative vision for Europe – a positive vision. It’s one we’re promoting in the run up to the European elections on June 10th, and I am delighted that two of our candidates for the North East, Jeremy Middleton and Martin Callanan, who is already serving you as an MEP, are here with us tonight.

Just like Newcastle United and Middlesbrough, I am delighted to be in Europe.

Just like Newcastle and Boro, the Conservatives want Britain to do the best we can in Europe. We want Europe’s member states to have room to breathe. If some countries want to integrate more closely then that is fine – as long as they do not force countries who do not want to, to follow them. Our policy is simple. Live and let live. That is a modern and mature approach – one which will allow Europe to succeed in the twenty first century.

Just as we don’t think a European Constitution is the answer to Europe’s problems, we don’t think a North East Assembly is the solution to the region’s difficulties.

Some of the leading voices for North East business, such as the CBI’s Steve Rankin and the Chamber of Commerce’s George Cowcher, are somewhat sceptical as well, and that The Journal to date remains to be completely convinced.

They are right to be sceptical. When any Government comes calling with an idea for a new political quango, you should run a mile. You should certainly treat their cost estimates like that of the proverbial builder’s. Whatever they say it will cost, double it, treble it, quadruple it. That’s what’s happened with every other Assembly introduced by Labour.

The fact is that a North East Assembly would have no additional money and no new powers. It would be an expensive talking shop for 25 politicians. And it would remove decision-making further away from the people who matter.

Council tax has already risen enormously here in the North East. In Sedgefield, you have the highest council tax in the country. In fact, Tony Blair pays a higher council tax on his Band D property in Labour-controlled Sedgefield than he does on his Band H property – 10 Downing Street – in Conservative-controlled Westminster.

You are paying enough in the North East for local government. You don’t need to pay even more for a North East Assembly.

Many of you, like me, may have spent time in America. A love of enterprise is at the centre of American society and I admire many aspects of American life.

In America, they talk about the American Dream. They talk about the ability of someone born in a log cabin to make it to the White House. As it happens, in America this is the exception, not the rule.

In Britain it actually does happen. There are countless examples of people from humble beginnings who make it to the top: who live the British Dream.

In Darlington, a self-taught engine-wright named George Stephenson came to call on an energetic quaker financier called Edward Pease one day in 1821 and persuaded him to use locomotives, not horses, on the Stockton to Darlington railway. The rest is history, and Stephenson went from a poor cottage in Wylam with a clay floor and no plaster to achieve great wealth and fame.

More recently of course, Sir John Hall made himself a fortune and used it to help his team back into the top flight of English football.

I have no doubt that there are many in this room on their way to great achievements of their own.

So we should talk about the British Dream. We should embrace it. We should celebrate it. I want everyone to live the British Dream.

The North East is full of talented and creative people. We could and should be doing so much better.

We need a government that does less, but does it better.

That provides a framework in which people can do the best for themselves and their families.

That allows them to keep more of the money they work so hard to earn.

And that does not constantly interfere and regulate and get in the way.

That is the challenge we set ourselves.

It is a challenge I shall strive to meet.

And I shall never lose sight of the hugely important part you play in helping us to achieve these goals, by ensuring that our economy thrives.

You are absolutely vital.

No government I lead will ever forget that.

So tonight I look forward to seeing some fantastic companies winning awards and to seeing the presentations that celebrate your achievements.

Tonight is your night, and I am very grateful that you have asked me to be with you on this great occasion.

Thank you.