“I want to make Britain the workshop of the world once more” – Owen Smith speech in Newcastle

It’s a pleasure to be here at Campus North in Newcastle.

This region has a long and proud history.

Ellen Wilkinson, the Labour MP for Jarrow, was a leading figure in the Jarrow March in the 1930s.

Two hundred unemployed men marched from Jarrow to London to petition for the right to work.

That march helped shape attitudes to unemployment and social justice which later led to the formation of the welfare state.

It is a powerful reminder of what working people can achieve when Labour is in government to put principles into practice.

But an object lesson too of the need to listen to the voice of working people.

The vote to leave the European Union should be an opportunity for us to do just that – it was unmistakably a call for change.

And it is that which I want to talk to you about today – how we should respond to that vote for Brexit and re-shape our economy so it works for all.

Because the decision on the 23rd June was a decisive rejection of Tory austerity.

And a call to overturn the economic consensus that has dominated since the 1980s.

It began when Margaret Thatcher subordinated the needs of our manufacturing sector to the demands of the City of London, delivering an economy too reliant on financial services.

One that specialised in designing financial vehicles rather than producing actual ones.

In 1982 more than one in five employees were employed in manufacturing – now it’s less than one in ten.

This has driven the regional economic imbalance that we face today.

The City of London does well – while the country loses out.

Our public finances remain too dependent on financial services.

Earnings stagnate, while inequality rises.

As does household debt.

High-skilled and secure manufacturing jobs are replaced by insecure, low-skilled and low-paid service jobs.

It’s a system that New Labour didn’t do enough to change.

In Government, Labour did a great many things.

We invested in public services – new schools, hospitals and decent homes.

The economy grew and we created many jobs.

But we were too dependent on the growth and tax revenue from the City of London.

And we failed to change the rules of the game.

Since 2010 the Tories have accelerated the drive to an insecure, low-wage and low-skill economy.

Employment has risen but too many jobs are temporary or insecure.

Fewer manufacturing jobs, more services.

George Osborne talked of the “march of the makers”.

But it was all rhetoric and no action.

The crash in 2008 was an opportunity to change the way our economy works – but the Tories have used it as an excuse to slash the state.

They’re starving our NHS of the funding it needs.

Cutting funding for affordable homes amidst the biggest housing crisis in a generation.

And underfunding our schools.

But not content with slashing the state, the Tories are after people’s rights at work too.

The Trade Unions Act is an assault on workers and democracy.

Just when workers need more support at work – the Tories attack those who could give a helping hand.

Yet our task as an opposition is not to just list the failures of the Tories.

Though there are many.

People know their jobs are less secure.

Young people know they can’t get on the housing ladder.

Patients know that waiting lists are getting longer.

What people want to know is how it can change.

First – Europe.

It has become ever clearer that Brexit has put our economy further at risk.

The risks were dismissed, but now they are very real.

For businesses, for jobs, and for wages.

For ordinary people.

The market’s response is a reflection of their confidence in the ability of the Tories to secure a good deal for Britain.

They clearly have none.

And Neither do I.

Under the Tories, we face the prospect of our country being the sick man leaving Europe.

Jeremy has said we should get on with leaving, I profoundly disagree.

I will not allow the UK to fall coughing and spluttering out of the EU door.

I won’t give Liam Fox, Boris Johnson and David Davis a blank cheque to scrap workers’ rights and environmental protections as the price for Brexit.

That’s why, once we know what offer is on the table.

The offer for our economy.

The offer for jobs.

The offer for workers’ rights.

I am resolute that the British people must be offered an opportunity to sign-off the terms of a Tory deal on Europe.

Next is the immediate action needed to safeguard the short-term health and stability of the economy.

Last week the Bank of England set out its response to Brexit.

It took the unprecedented step of cutting the interest rate to its lowest point in 300 years.

And expanded quantitative easing.

It did so because of the precarious state of the economy following the vote to leave the EU.

We stand on the cliff edge of another recession.

Consumer and business confidence has plummeted.

Mark Carney has warned that a quarter of million people could be laid off.

The economic warnings set out during the referendum campaign – and so recklessly dismissed by the Tory Brexiteers – are coming to pass.

And it’s ordinary people, again, that are set to pay the price.

So I welcome the Bank’s decision to take swift action.

But interest cuts and expanded QE are, on their own, not enough.

Since 2009, £375bn has been pumped into our economy through the Bank’s QE programme.

But very little has filtered through to the real economy.

Eight years following the financial crash and most SMEs outside of the South East remain starved of finance.

The Bank of England was right to take swift action.

But monetary policy is at its limits – and action by the Bank is not enough.

The government must step in and pull the economy back from the cliff edge.

As Danny Blanchflower has said, the risk of doing too little is far greater than the risk of doing too much.

To complement the monetary activism of the Bank of England, the Government should also be taking action to urgently stimulate the economy.

I have committed to a British New Deal which will see a £200bn investment package to rebuild Britain over the next five years.

I believe that at least £20bn should be committed immediately on shovel-ready projects.

Rail electrification, renewable energy schemes, plans for new FE colleges.

Vital infrastructure projects that are ready to go but simply lack the necessary finance to get started.

Housing is the greatest example.

If set in train quickly enough, this could provide a fiscal stimulus big enough to ward off a downturn.

And the Government should bring forward the Autumn Statement as early as possible to allow this to happen.

But if short-term action is necessary, then long-term reform is essential.

First, we need fair taxes to deliver world beating public services.

That’s why I’ve set out my plans to tax wealth, big business and top earners to pay for the public services we need.

I’ll raise real-terms spending on health and social care by at least 4% in every year of the next parliament.

Second, we need to stamp out insecure and low-paid work.

We must have a strategy to improve the quality and pay of the jobs that exist in our economy now.

That’s why I’ve set out my plans to deliver world beating employment rights.

Plans to tackle exploitation, reduce insecurity, and strengthen the voice of workers.

• Ending the public sector pay freeze;
• Repealing the Trade Unions Act;
• And make good on John Smith’s promise of workers rights from day one.

Plans that will deliver greater security for the British people.

And I’ve set out plans to boost pay and enhance in-work support.

A real living wage and the reversal of Tory cuts to Universal Credit.

The biggest boost to the living standards of low-paid workers for a generation.

But we have to do more.

If we want to reduce our dependence on financial services.

Rebalance our economy.

Create new high-skilled, high-pay jobs then we must have a strategy for delivering it.

And if we are to provide an answer to those who vote leave and are crying out for change.

Then we need nothing short of a new industrial revolution.

I want to make Britain the workshop of the world once more.

That doesn’t mean taking us back.

I don’t want to re-open the coal mines.

I want to take us forward.

But that does mean learning the lessons of the past.

Government reports forecast a continued decline in manufacturing jobs.

We must not sit by and simply accept that these jobs will disappear to be replaced by more low skill and low wage jobs.

Manufacturing in Germany makes up a quarter of GDP compared to just 10 per cent in the UK for that very reason.

We accepted the decline as inevitable, they didn’t.

Taking a different approach is all the more essential with the rapid technological changes coming down the line.

New digital technology has the potential to transform our economy and society in the same way as the steam engine.

Our old collective workplaces are set to decline as new ways of working emerge.

More shared enterprises and self-employed.

If we stand by then these changes could rip through our economy and hollow out our job market.

The Bank of England has warned that automation could see 15 million jobs lost in the UK alone.

But I am more optimistic.

Partly because past warnings of the destructive potential of technological change have often been overblown.

But also because we have a choice about how we react to these changes.

To benefit from them we must have a plan to exploit the new opportunities that this new digital age will bring.

Here in Newcastle – you are a shining example of how it might be done.

A proud history of industry and manufacturing.

Once the beating heart of European ship building and engineering, where Stephenson built the Rocket.

But today, Newcastle is at the heart of one of the UK’s leading tech clusters.

Here at Campus North, you are leading the way in supporting the next generation of ambitious digital startups.

And Newcastle University is pioneering developments in global subsea technology as Newcastle seeks to become a hub for the energy industry.

Elsewhere, places like Cornwall are also benefiting as it fast becomes the ‘California of the UK’ with one of the highest growth clusters in the tech industry in the country.

But we don’t have a strategy to exploit these opportunities in the way in which we should.

That means we need an active industrial policy that supports sectors with the best chance of growth all over the country.

But that strategy must have financial support to back it up.

Because whether it is spending on R&D, science and innovation or infrastructure – public and private, Britain lags behind.

This puts UK competitiveness, productivity and high-value jobs at risk.

I have committed to delivering a British New Deal, investing £200bn over the course of the next parliament to re-build our physical and social infrastructure.

I want £40 billion of that to be spent backing the industries and jobs of the future.

To boost British exports we must focus on supporting industrial clusters which promote collaboration, competition and innovation.

This means departing from the approach of the last three decades which has allowed the market to run riot, but it is also not a return to 1970s style picking of winners.

Instead support will be given to clusters in every corner of the UK which will include a number of industries and other institutions such as universities.

We should back sectors with high productivity jobs that have the potential to boost exports.

And help drive expenditure on research & development up to the internationally recognised ambition of 3% of GDP.

As part of this the Labour movement must work with the trade unions, as it has always done, to find new ways to support working people as this new economy emerges.

We must support our existing industries such as the automotive industry but also new industries where we can develop a competitive advantage.

Digital and tech start-ups, creative industries and renewable energy.

Where is our bold mission to use the low-carbon revolution to produce high quality jobs?

To lead this new industrial revolution, as we led the last?

Tesla, the US electric car manufacturer is building a huge ‘Gigafactory’ in the US to produce batteries for electric cars.

£5bn dollars is being invested into it.

By 2018, it alone will be producing more batteries than total global production a few years ago.

Why not in Britain?

In the UK there are only eight hydrogen filling stations open to the public right now.

While in Germany they are building 400.

Britain simply can’t afford to fall behind.

This Tory government is happy for our energy industry to be in the hands of the state provided it is not our own.

Not under my leadership. Where private finance is hard to find, it is right that the state should step in.

The Government is on the road to privatizing the Green Investment Bank.

That decision is wrong for the green economy, and wrong for Britain.

Under my leadership, it would be in Government hands.

So far the bank has committed £2.7bn to the UK’s green economy generating transactions of £11bn.

A good start but nowhere near enough – to achieve our legally binding environment targets we require an investment of £330bn in the UK’s green economy by 2020.

But investment to date is less than half that.

Under my leadership, I would turbo charge that capitalizing the bank with a massive injection of £15bn over the next five years.

Under my leadership, we won’t just keep up, we’ll pull ahead.

That’s the radical economic future the Labour party will deliver for Britain under my leadership.

Strong leadership that delivers an effective opposition, not weak leadership that delivers nothing for ordinary people.

A strong Britain leading in Europe, not a sick man walking out.

A fiscal plan to support ordinary people, not one that sees them pay the price.

Secure and better paid jobs, not ever greater insecurity and low pay.

A new industrial revolution to secure the jobs of the future, not slogans that talk about the jobs of the past.

Thank you