Michael Howard – 2005 Speech to the CBI

Below is the text of the speech made by Michael Howard, the then Leader of the Opposition, to the CBI Conference on 1st March 2005.

As a politician, it’s easy enough for me to travel round Britain, talking about all the things I want to do for our country.

I can talk till I’m blue in the face. But without you, I can’t do anything.

I can’t deliver my priorities for government: lower taxes, more police, cleaner hospitals, controlled immigration and school discipline – unless we have a strong and competitive economy.

And a strong and competitive economy is not built by government; it’s built by people – the British people.

What you achieve for Britain creates the opportunity for everything that any politician may ever want to do. You generate the prosperity that enables people to look to the future with optimism. You create the jobs we all depend on. Without you – no safety net for the least fortunate, no care for the sick, no pensions in old age.

It is your hard work and your skill that makes Britain what she is today – a country with a proud past and an exciting future.

So I want to praise the profit-makers, because too often in our country, profit is used as a dirty word. There is a dangerous ignorance in Britain today about the role of business in society. It is astonishing how little the connection between your profits and our public services is understood.

This year, Corporation Tax alone is forecast to raise almost £33 billion – enough to pay for half our education. Yet a common response to the world-beating performance of our greatest companies is a sneering retort about “excess profits”, when its those very profits that pay for the quality of life we all demand.

I’m crystal clear about government’s role in all this. It’s to create the conditions for your success – to set the framework in which business can best thrive.

You live and compete in the global economy. Marginal advantages in prices, delivery dates or quality decide which firms win the orders and create the jobs. That’s why it’s so important government sets the right framework. And I do not believe that ever higher taxes, ever higher public spending and ever higher regulation constitute the right framework.

Gordon Brown’s always going on about the need to make the European economy more like America’s. The great irony, of course, is that he’s actually making Britain’s economy more and more like those of continental Europe. For British business, Europe is a market, not an economic model.

We are all paying the price as Labour turns the British model into the European one. Britain is the slowest growing of the English-speaking economies. And our income per head is now – for the first time – lower than Ireland’s.

The truth is Britain’s heading in the wrong direction and we need to change track.

First, we need fiscal discipline to provide the macroeconomic stability on which sustained growth depends.

Second, we need to reform the microeconomic framework so that competitiveness and productivity rise not fall.

And third, we need to take urgent action to raise standards in our schools – because tomorrow’s economic performance is dependent on the quality of today’s education.

A Conservative Government will get a grip on spending. Britain cannot carry on spending more than she is earning without higher taxes or higher interest rates. Government must once again start to live within its means.

There are two Britains today. Private sector Britain, where people are working harder just to stand still, struggling just to make ends meet. And bureaucratic Britain, where money is no object, you spend what you like and employ who you like. For every job the private sector lost last year, the public sector took on almost two jobs.

Rarely in the history of politics has a government spent so much, taxed so much and achieved so little: children still unable to read or write when they leave school; waiting times longer not shorter; crime up not down – and all of this in the world’s fourth richest country. We’ve all come to realise there’s no such thing as a free lunch. But with Mr Blair you pay for lunch … and it never comes!

You know a country is living on borrowed time when government is the fastest growing industry in town. So we appointed an independent team of business experts to undertake a detailed, line by line review of government expenditure.

In January it presented its conclusions. Its recommendations mean we can cut waste and bureaucracy, strengthen the frontline, pay off debt and lower taxes.

Under a Conservative Government 168 quangos will disappear; 235,000 bureaucratic posts will go; there’ll be no more Regional Assemblies; the Supreme Court will go; there will be no Small Business Service; the New Deal will be scrapped.

These decisions are tough – but they are the right decisions because by cutting waste and by doing less a Conservative Government will be able to invest more in our priorities and lower taxes.

I am a Conservative because I believe that families and business are better at spending or investing their own money than politicians. People work hard for their cash and they deserve to keep more of it. And as we all know low tax economies are the most successful economies. They generate more wealth and create more jobs. That is why a Conservative Government will cut taxes.

Next, microeconomic reform. You all know the problem. British business is over regulated. It’s eroding your margins. And it’s damaging your ability to compete.

Fewer regulators and fewer bureaucrats will mean fewer regulations. We’ll introduce sunset clauses into regulations – so they don’t live on for ever but wither on the vine. And we’ll impose regulatory budgets on every government department which we will lower year on year. That way we’ll cut the regulatory burden you all face.

This morning I set out Conservative proposals for work permits. Migration in both directions is part of any dynamic, competitive economy.

But immigration has to be controlled. Scale matters because while immigration adds to the economy it also adds to our population. This has consequences for public services and community relations. Immigration has trebled in the last eight years. As the Government’s own Community Cohesion Panel has said “the ‘pace of change’ is simply too great at present.”

So, a Conservative Government will set an annual limit to immigration in the light of our economic needs, our moral obligation to refugees and our ability to absorb newcomers. We will introduce an Australian-style points system for work permits – so we give priority to people with the skills Britain really needs.

But I want to make one thing clear today. Britain has reached a turning point. We need to limit and reduce immigration to our country – including work related immigration – so that we can maintain good community relations and effectively manage our public services.

EU enlargement has massively expanded the pool of labour – both skilled and unskilled available to British employers. And our points system will ensure that immigration from outside the EU is limited and prioritised.

Everything a Conservative Government does will be a means to one goal – and that goal is opportunity. I want everyone to have the opportunity to make a success of their life.

I came from an ordinary family with no special privileges. But my State school education taught me that there’s no barrier to success – it is possible to give everyone, whatever their background, real opportunity.

We were all taught the basics. Our teachers encouraged ambition, excellence and hard work. It was the best start any child could have in life.

But too many children in Britain today don’t get that start. Lack of discipline is a real and growing problem in our schools. Many children still leave school unable to read, write or add up properly, while a pass grade for a Maths GCSE is now just over 15 per cent.

This isn’t just a personal tragedy for the children concerned – it’s a national tragedy.

If children don’t learn respect for authority in class, they’re less likely to respect others when they grow up. If youngsters aren’t taught to read or write properly at school, they’ll find it tougher to get a job. And if British companies can’t recruit employees with the right skills, they’ll find it much harder to compete.

We need to change direction. We need to restore discipline in school. That is why a Conservative Government will give head teachers control over their schools – they’ll have the final say on expulsions. Mr Blair’s policy of inclusion at all costs is wrong. I will not allow a disruptive minority to ruin the education of the majority.

I want to live in a society where every child is taught the basics. There is overwhelming evidence to show that traditional teaching methods – phonics, times table, arithmetic – are the best way to teach children to read, write and add-up.

Parents understand that – and a Conservative Government will give them the power to choose schools that use traditional teaching methods. As you know better than most, choice and competition drive up standards in every field of human endeavour.

Schools should challenge and stretch the brightest – rewarding excellence and ambition. The “all must have prizes” mentality has undermined education standards.

A Conservative Government will get rid of the targets that fuel grade inflation. We will keep external examinations at 16. And A Levels will remain the gold standard that universities and employers need them to be. “A” grades will only be awarded to a fixed percentage of pupils each year. And students won’t be able to retake modules again and again.

Of course not all children are academic. And so we should value youngsters with a technical or practical qualification just as much as students with a degree.

That’s why we’ve been working with the CBI to develop plans for a high quality vocational education system. Then everyone will know that a youngster who has chosen a vocational route and come out of it with flying colours is skilled and proficient.

A Conservative Government will establish a network of super colleges – paid for by abolishing the Learning and Skills Council. And we will let 14 and 15 year olds start down the vocational path at school, by attending specialist courses at FE colleges.

Governments don’t have all the answers. But if they govern with the right values they can make a real difference. Trusting free enterprise; rewarding hard work; encouraging ambition; admiring excellence in whatever field. These are the right values.

After I left university I spent a year in America. I admire many aspects of American life – particularly their enthusiasm for success. In America, they talk about the American Dream – 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. As many of you in this room demonstrate, there are countless examples of people from humble beginnings who make it to the top in Britain: people who live the British Dream.

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

That’s why we need a government that values discipline in schools and excellence in education. A government that lets people keep more of the money they earn by cutting taxes. And a government that champions British business and sets our great companies, and our entrepreneurs free to do what they do best: win orders, generate wealth and create jobs.

That’s what a Conservative Government will deliver. That’s why I believe Britain needs a Conservative Government. And that’s why I will pull out all the stops for a Conservative victory at the next election.