David Cameron – 2006 Speech to the Institute of Directors in Northern Ireland

Below is the text of the speech made by the then Leader of the Opposition, David Cameron, to the Institute of Directors in Northern Ireland on 26th October 2006.

It’s a great pleasure for me to return to Belfast as the guest speaker at your annual lunch.

As I said in Scotland recently, every part of the United Kingdom is precious to me and the party I lead.

That applies equally, of course, to Northern Ireland.

I’ll deal with the prospects for political progress briefly.

But today I want to talk mainly about the importance of economic progress.

Part of that involves economic liberalisation and achieving competitiveness in the global marketplace.

And I’ll explain how I believe we can do that.

By promoting deregulation.

By introducing tax reform.

And, particularly in the context of Northern Ireland, by increasing the size of the private sector as a percentage of the economy as a whole.

But I’m going to argue that if economic progress is to bring social stability, economic liberalism – low taxes, deregulation, stable monetary policy – is not enough on its own. We need to add to it, with ideas for economic empowerment.

We must recognise that the rising tide of the open economy does not always lift all boats and that, for some people, the bottom rungs of the ladder to prosperity are broken and need to be fixed.

That means investment in training, skills, education and recognising the human and personal development that people need to help them out of poverty.

This, in turn, needs a new approach to politics. Government alone cannot empower people or give them the tools for success.

We need social responsibility. A new role for the voluntary sector, for social enterprise and, yes, for business.

Political progress

But first, the political situation.

Following St Andrews and as we approach the first deadline in the Governments’ timetable, it’s worth telling you my position.

My party supports devolution.

We believe that government is better when it is closer to people and when decisions are taken locally.

I’m in no doubt that a fully functioning Assembly will provide much greater degree of accountability for local decisions than can ever be the case under direct rule.

Decisions about domestic rates or academic selection should be made here, not in Whitehall or a Westminster Committee Room.

St Andrews was clearly a significant step forward towards the restoration of devolution.

I wish Tony Blair well and hope that this initiative succeeds.

But power-sharing will only work if every political party and every Minister in the Executive sticks to the same, basic democratic rules and gives full support to the police, the courts and the rule of law.

So the reality is that Sinn Fein must deliver on policing.

No more is being asked of them than that they play by the same democratic rules that are accepted by every other political party in the United Kingdom and the Republic of Ireland.

Backing the police means more than just joining the Policing Board.

It means reporting crime and co-operating with the police at all levels.

It means encouraging people from your community to join the police.

And it means passing on evidence of crime to the police – such as in the case of Robert McCartney.

Sinn Fein must be clear about these things. But I hope Unionists will be equally clear – about their response.

If Sinn Fein makes these moves – as St Andrews requires them to do – then, difficult as it undoubtedly will be for some, I believe that unionists would be absolutely right in re-establishing a power-sharing, devolved government.

That means locally elected and accountable ministers from both main traditions working together for the good of Northern Ireland.

It is a big step for Dr Paisley to sit down with Mr Adams. But in time it has to happen if devolution and power-sharing are to take place and work.

And success also means a commitment to co-operation on matters of shared interest with the Republic of Ireland and throughout these islands as a whole.

And it means presenting to the world a new, outward looking and optimistic face of Northern Ireland.

Such a political settlement would set the seal on the transformation that’s taken place in Northern Ireland over the past fifteen years.

My Party wants to make it happen – and while we are the Opposition, we are the loyal Opposition – and we will never play politics with the future of Northern Ireland.

Economic progress

Let me turn to the economy.

Enormous progress has already been made – a great deal of it down to you in the business community.

Everyone knows that, for Northern Ireland, economic success has been one of the dividends of political change.

What is less clearly understood is that economic success has, in turn, driven forward that political change.

Unemployment is lower than in most other regions of the country.

One only has to look at the city centre here in Belfast to see the amount of new investment that’s coming in – here, and also in towns and cities across Northern Ireland.

House prices are rising faster than virtually anywhere else in the United Kingdom.

And of course without the threat from terrorism people are able to go about their daily business in a way that was unthinkable just over a decade ago.

I accept that there are big problems that need tackling.

The transport infrastructure needs modernising. Investment is required to upgrade water and sewage services.

But on the whole there is reason for optimism about the progress that Northern Ireland has made.

ECONOMIC LIBERALISATION

Competitiveness in the global marketplace

In order to sustain progress, we need to recognise the harsh realities of the competitive global economy. Business can locate anywhere. So government needs to get real about competitiveness.

We need a Government that asks some straight forward questions.

Are we making it easier, or harder, to set up a business?

Are we making it easier, or harder, to employ people? Is the overall burden of tax, public spending and borrowing going up or down?

Politicians need to understand the realities of life for the entrepreneur and wealth creator.

Does it take an employer more time, or less time, to fill in their tax return?

Is an employer spending more time, or less time, dealing with red tape?

Are the costs of complying with legislation and regulation going up, or down?

These are the real tests of an open economy. Those are the questions my government would ask. At the moment Labour cannot give positive answers to those questions.

Unfortunately, under the current Government the United Kingdom has slipped from fourth to tenth in the world economic competitiveness league.

With regulation up, tax up, interference up, the foot of government is pressing down on the windpipe of British business. We’ve got to take that foot off.

Deregulation

One way to do that is to make the economy competitive is to reduce the burdens that business faces.

The CBI estimates that £50 billion of new regulations have been introduced since 1997.

We need to tackle regulation at source. We need to look at the vast expansion of litigation under no win / no fee. We need to stop the gold plating of directives. And we need to go further, not having dozens of goals from an EU negotiation – but just one: to get out of the Social Chapter.

Tax reform

Let me say something about tax.

Under the current Chancellor, business has been, quite simply, over-taxed. We used to have some of the lowest rates of business tax; now we have some of the highest.

In the modern world, firms are competing not just within Northern Ireland…

Or in an island of Ireland or UK context…

But in a global market where the challenge from countries like China and India grows more formidable by the day.

And in the modern world, it’s the lower-tax economies that will be the most competitive.

You know better than me that we only have to look south, to the Republic of Ireland, to see the truth of that.

Northern Ireland shares a land border with a country that currently enjoys a much lower rate of corporation tax than we do in the United Kingdom.

People here are aware of this – and are calling for taxation measures to help.

There’s widespread support for the idea that Northern Ireland should have a separate rate of corporation tax to the rest of the UK.

And there’s the Northern Ireland Manufacturing Group’s campaign on industrial de-rating.

Across the country, there are lots of calls for tax cuts.

I hear them. I understand them.

Last week, the Conservative Party’s Tax Commission published its report.

The members of that Commission, led by Michael Forsyth, are men and women with a wealth of experience of industry, trade, finance and social policy.

They are also independent minded.

They have done what I asked and presented my Party with a menu of options for tax reform that deserve serious consideration.

Tax breaks specific to Northern Ireland would have to be thought through in the context of overall Exchequer support for this part of the UK and the precedent that might be set for other parts of the United Kingdom.

I will look seriously and with an open mind at any well-argued, carefully modelled case that business here puts forward.

But we are clear about the framework of our tax policy.

Sound money means that we shall always put stability ahead of tax cuts.

So we will not be promising up-front, unfunded tax reductions at the next election.

But we will share the proceeds of growth, so over time we will be able to reduce taxes.

We will also rebalance our tax system.

Green taxes on pollution will rise to pay for reductions in family taxes.

The Tax Reform Commission’s report sets out some options for doing that.

But tax reform isn’t just about reducing or rebalancing taxes.

It’s also about making tax much more simple and transparent.

Tax law in the UK has developed in a piecemeal fashion over a long period of time without any systematic or overall review.

Tolley’s Tax Handbook of the British Tax Code was 4,555 pages in 1997.

Nine years later it has doubled to over 9,800 pages.

That’s 10 times longer than Tolstoy’s War and Peace. And I’ll tell you something else…it’s much less of a good read.

A survey of British businesses carried out for the Tax Reform Commission found that more than three quarters of businesses thought the tax system had become more complex in the last five years.

And the number saying the tax system had become less complex?

Two per cent. They must be either incredibly clever or incredibly stupid.

Rising complexity is at the root of the increasingly antagonistic relationship between government and business over tax avoidance.

A simpler tax system would stop the endless game of cat and mouse.

Complex taxes are harming our competitiveness and driving away investment.

We believe that when it comes to business tax, by removing exemptions and broadening the base on which tax is charged, we could simplify the system and reduce headline rates.

That will be our goal.

Growing the private sector

Within Northern Ireland, the private sector is performing well.

Northern Irish companies are doing fantastic business the world over – Mivan, Lagan, Norbrook and FG Wilson to name a few.

But I agree with those who say that the Northern Ireland economy needs re-balancing.

Currently around two-thirds of it is dependent, directly or indirectly, on the public sector.

That compares with about one third in the south-east of England.

It makes the local economy particularly susceptible to a slowdown in the current growth in public expenditure.

Only last month the First Trust Bank’s quarterly survey of the Northern Ireland economy concluded that ‘overall economic growth is likely to slacken in 2007’ and warned:

‘Businesses that are dependent upon the state sector should recognise that public expenditure growth in the years ahead will be slower than in the past’.

That is not healthy.

So there is a widespread consensus – that includes the Government – on the need to reduce the role of the state and the public sector, and to boost the private sector in delivering growth and prosperity.

My aim is clear – to make the United Kingdom the best place to set up and do business.

And, within the UK, to ensure that Northern Ireland is a full participant in this dynamic enterprise culture.

ECONOMIC EMPOWERMENT

Of course, economic prosperity benefits everyone but we should be honest in acknowledging that some people are not in a position to take advantage of it.

That is why any policy of economic liberalisation must be accompanied by economic empowerment for those left behind.

There is growing prosperity here, but also some of the most disadvantaged parts of the United Kingdom, suffering all the problems associated with social exclusion.

I saw some of these at first hand when I visited the Shankill area last December.

A place where very few people have even a single GCSE… where the opportunities for getting on and getting up are incredibly limited.

While grammar schools in Northern Ireland produce the best exam results in the United Kingdom, there are still far too many children leaving school with few, or no, qualifications.

Of course I oppose the Government’s attempts to change the status of schools without the approval of people locally. But we must also do more to encourage those in the most disadvantaged areas to see education as an opportunity, not an irrelevance.

Reading is crucial, too.

If you can’t read, it’s hard to play anything more than a walk on part in the economy.

In Northern Ireland, just under a quarter of 11 year olds failed to achieve level 4 or better at Key Stage 2 English.

Put simply, that means they don’t have command of the basics.

Getting children to read competently when they leave primary school is the greatest single contribution we could make to transforming their opportunities in later life.

Today, there are almost 20,000 young people in Northern Ireland who are not in work or in full time education.

We can’t afford to write them off or leave it to the paramilitaries to give them some sense of purpose in their lives.

So economic empowerment means fixing the broken rungs at the bottom of the ladder from poverty to wealth.

There are 113,000 people in Northern Ireland on incapacity benefits, many of whom have the ability and the will to work – at least part-time – if the system only supported and encouraged them to do so.

Human capital is the most important resource of the open economy.

I see it as a key task of modern government to find ways of helping excluded groups back into the mainstream of our society.

And more often than not it will not be the Government that has the answers – it will be social enterprises, voluntary groups, community organisations and, yes, business that has the answers.

So yes we need to roll back the state in terms of rebalancing the economy, between the state sector and the private sector.

But we also need to roll forward society in terms of all recognising our responsibility to help the disadvantaged and build a strong society.

That is what I mean by social responsibility – recognising that government alone cannot tackle these problems.

We should be looking at a new deal with the voluntary sector – longer term contracts and funding to deal with the toughest challenges.

We should look at new ways to help those stuck in deprivation – perhaps easing the rules that say you lose benefit if you do more than 16 hours voluntary work. For many that is the path back to work – so why block it?

And just as Enterprise Zones helped in the 1980s with a broken economy, why not create Social Action Zones, cutting burdens from business and charities that help crack deprivation in some of our poorest neighbourhoods.

When I was growing up, when I first began working in politics, Northern Ireland only ever seemed to be associated with bad news.

Today, Northern Ireland is changing – and for the better.

There’s still some distance to travel and some issues to be resolved.

But hopefully we’re getting there.

I want to see Northern Ireland as a peaceful, stable and prosperous part of the country.

I want to see a shared future for people of all traditions, based on reconciliation, democracy and the rule of law.

And I look forward to working with you over the coming years to help make that a reality.

I want politics in Northern Ireland to be about the real things – schools, hospitals, tax, not about timetables, deadlines and institutional arrangements.

And I want the Conservative Party to be a part of that new politics.

We’re moving in a new direction.

Leading the debate. Pulling ahead of a tired Government. Developing policies for the future.

In doing so, one thing is certain.

My Party’s commitment to Northern Ireland, and to all its people, will be whole hearted and unshakeable.