Ed Balls MP, Labour’s Shadow Chancellor, in a speech to the British Chambers of Commerce Annual Conference, said:
Thank you Adam for that introduction.
And to your Director-General, John Longworth, and you the members of the British Chambers of Commerce for having me back again to address your annual conference.
I hope and confidently expect that you will hear from us not partisanship and sloganeering, but a constructive debate about what needs to be done to secure Britain’s economic future.
Some of you here today will be signed-up Labour supporters, and some signed-up Conservative supporters. But in my experience, the large majority of business leaders care less about party affiliation, and more about the future success of their business and our country – and want to work with the Government of the day to get the right long-term environment for creating wealth and good jobs and long-term investment.
And that is what I want to talk about today.
We are living in difficult and risky and rather dangerous times.
And we need to have a straight conversation about the risks we face and about what needs to be done.
This is set to be the first time since the 1920s when working people are worse off at the end of a Parliament than they were at the beginning – the biggest fall in wages in a parliament since 1874. Working people are now £1,600 a year worse off since 2010.
The reality is that globalisation and technological change, is hollowing out the number of traditional middle income jobs and squeezing living standards for working people in Britain and across the developed world.
And at a time when, even as our economy recovers, most people are not seeing the benefit in their wages and living standards, this is no time for complacency.
Last year at this conference, we were six months from the Scottish referendum.
We confidently expected to win that vote and reject breaking up our 300 year union and safeguard the jobs and investment which depend on it.
And we did.
But six months on, with the Scottish Nationalist Party still banging the drum for separation, it would be deeply foolish to say today that the future of our union is secure.
And with the Eurozone still stuck in a deflationary quagmire, the UK Independence party still strong in the polls, anti-European sentiment still widespread, the future of Britain’s membership of the European Union feels equally insecure today.
There is a common theme here: when times are hard and living standards are under great pressure, it is always easier to look for someone to blame.
And none of us here today is immune, when the polls show that politicians, business leaders and journalists are all competing for reasons to be unpopular.
I have to say, simply telling people they’ve never had it so good will only make working people feel that politicians are out of touch with the reality of their lives.
So how should we respond?
First, we have to be robust and reject the luddite view of those who think Britain can just cut ourselves adrift from the EU and the global economy and go it alone – just as we should have no truck with those who say we don’t need a tough and credible strategy to reduce the deficit.
In my view, Britain has always succeeded and can only succeed in the future as an open trading nation, backing wealth creation and winning investment and attracting companies and talent from around the world.
The growth sectors in which we are hugely strong – from pharmaceuticals and advanced manufacturing to media and creativity, education and financial and professional services – are all global industries which depend on our access to international markets to succeed.
That is why Ed Miliband and I are clear that to walk away from Europe – our biggest trading market – would be a disaster for Britain.
But it would be really foolish to assume that public support for that vision of an open, trading Britain in the EU is strong or secure.
This is why I agree with John that Britain must lead the debate for reform in the EU.
Banging the table for change and for the EU to work better for Britain.
But not flirting with exit and putting party interest above the national economic interest.
So while I agree with your Director-General on the need for reform and about the damage the current uncertainty is doing to investment, I fear that every comment by senior Cabinet Ministers saying they would be happy or relaxed to see us walk out.
And every hint that a referendum could happen as early as next year – before any meaningful reform agenda could be achieved – only adds to the uncertainty and risk for British businesses.
Because I fear that Britain walking out of the EU is the biggest risk to our economy in the next decade.
EU exit risks British jobs, trade and investment and the future prosperity of the UK.
That is the message I hear from businesses across the country week in week out.
But if we are to secure Britain’s standing as an open trading nation, we need to do better at delivering strong and balanced growth with rising productivity and living standards.
It is good news that, unlike the Eurozone, the UK economy is growing.
But it is deeply disappointing that our productivity and business investment and particularly our export performance has been so poor in this recovery.
And, as we concluded in the Inclusive Prosperity Commission that I chaired with former US Treasury Secretary Larry Summers, it just doesn’t work for government to stand back and wait for productivity to rise or wealth to trickle down.
I believe in the power of markets and incentives to create wealth and good jobs.
But I know too that markets don’t, by themselves, deliver the long-term investment in ideas, skills and infrastructure that modern economies need.
Which is why Ed Miliband and Chuka and I are determined to work with you to improve the environment for business investment and productivity through an economic policy that tackles our weaknesses, backs our strengths and delivers more good jobs.
Because when working people and British businesses succeed, Britain succeeds too.
So this is what we mean by a modern industrial policy:
Strategic support for large and small businesses innovating in advanced supply-chains, as Lord Sainsbury and Jaguar’s Mike Wright have championed.
An independent national infrastructure commission – as recommended by Sir John Armitt – which will end the dither and delay on major infrastructure investment decisions.
And after years of kicking this into the long grass, we will make a swift decision to expand airport capacity in the south-east, while taking into account environmental concerns, when the Davies report is complete.
Support for exporters that is world class and business-led and works for small and medium-sized businesses too – and I know many of you will already have engaged with our review of export support that Graham Cole, the Chairman of AgustaWestland UK, is leading for us.
A proper British Investment Bank with the resources and ambition to improve access to finance for small and medium-sized businesses –something which many of you in this room have championed and worked with us on over the last few years and which we will set out more details on later this week.
More free childcare to help working parents balance work and family life and action to get our young people back to work.
A skills policy that delivers for business – boosting apprenticeships and putting vocational learning on a par with academic qualifications so you get the confident, numerate and skilled people you need.
And a tax policy system which support growth and investment.
I have supported the cuts in the main corporation tax rate which we began back in 1997. And we will keep Britain as the country with the most competitive corporation tax rate in the G7.
But when so many of you have told us that you are under pressure because of high and rising business rates, we do not think a further cut in the corporation tax rate is the first priority this April. So we will instead use that money to cut and then freeze business rates for 1.5 million small business properties.
And because our desire to support an entrepreneurial Britain is at the core of our vision for the economy, I want a Labour Treasury to do more to support innovation, and growing businesses – and I am pleased to announce that Simon Franks, a leading British entrepreneur and founder of Redbus Group and LoveFilm, is conducting a review for us of how we can best support early stage and high growth businesses which we will publish in the coming months
But where markets are not working well – as in banking or energy – we will back the market reviews being undertaken by the independent Competition and Markets Authority to see how we can get more competition and choice and a fairer deal for businesses and consumers alike.
We will cut the deficit every year, get the current budget into surplus and the national debt falling as soon as possible in the next parliament.
We will have to make difficult decisions and spending cuts – and like every successful business we are examining every pound spent from the bottom-up through our Zero-Based Review to root out waste and inefficiencies.
But we will not balance the books by relying solely on even bigger spending cuts in the next parliament than we have seen in this Parliament – the biggest cuts in public services of any advanced economy in the next five years according to the Institute for Fiscal Studies.
Which brings me to my third point.
As I said earlier, if we are to win the argument that Britain can succeed in an open global economy, we have to show that our economy can deliver rising prosperity for everyone who works hard and plays by the rules.
And that is not what people think is happening in our country at the moment.
I want an open and competitive tax system that rewards work and supports entrepreneurs and long-term investment and wealth creation.
But that also means that individuals and companies alike should pay their fair share, and where the international rules are not fit for purpose we have to change them and close loopholes here in the UK too.
And when tax and benefit changes since 2010 have cost the average household is over £1,200 a year we have to show that those with the broadest shoulders are bearing a greater burden to get the deficit down.
I don’t expect people with houses worth over £2 million to celebrate paying an extra £250 a month to help us secure the future of our National Health Service. But when high-value properties are so relatively under taxed and when our NHS is under such pressure, it is an important part of a tough but balanced plan.
And I didn’t want to have to cap child benefit at one per cent and remove the winter allowance from the richest five per cent of pensioners or keep the top rate of income tax at 50 per cent while we balance the books in the next parliament.
But in my judgement these things are necessary if we are to show that an open and dynamic economy and balanced deficit reduction can both be good for business and work fairly for all.
So this is my message today.
This is no time for complacency.
I don’t think for a moment that Britain’s future in the EU or as a good place to do business is secure.
But I promise you that, if we are elected, the next Labour government will work with you to ensure that it is.
And to do so, we have to show that our economy can deliver rising prosperity for everyone who works hard and plays by the rules.
A Britain open to the global economy and leading on reform in Europe, not threatening to walk away.
A Britain investing in a high-productivity economy, not ducking reform and hoping business-as-usual will do the trick.
And a Britain where we see off populist pressures for reaction and isolation by showing that we can deliver prosperity and rising living standards not just for some but for all our citizens.
Pro-business, but not business as usual.
Promoting competition, not turning a blind eye to bad practice.
Supporting wealth creation, but making sure everyone pays their fair share.
That is the task – whoever wins the General Election.
The stakes are higher than they have ever been.
And you must make sure we rise to the challenge.