Speech to the 2001 Conservative Party Conference

Michael Howard, 09/10/2001

Category: Economic Policy

We meet this year against a sombre backdrop. The events of September 11 were truly terrible.

"To their credit, America and her allies, including the United Kingdom, have stood firm in the face of this new peril.

"Our thoughts and prayers are with our servicemen and women as once again they risk their lives for us and for the whole of the free world. We wish them godspeed and a safe return home.

"I am delighted that Iain has asked me to shadow Gordon Brown, and I have an excellent team to help me do so.

"John Bercow, once the Spectator's `backbencher to watch' and now deservedly elevated to the Shadow Cabinet as Chief Secretary.

"Howard Flight and Maurice Saatchi, both with a wealth of knowledge and experience in Treasury matters, and both of them people who know what it is like to build up a business from scratch. And some business!

"And David Lidington, Chris Chope, and David Northesk, who did so well in their respective fields in the last Parliament.

"And can I take this opportunity to pay tribute to William Hague, to whose character and courage we owe so much and who will continue to have a huge contribution to make to our Party and our country.

World Economy

"The events of September 11 have had many consequences. We have all been deeply moved by the individual tales of tragedy and heroism that have filled our newspapers and television screens in the last four weeks.

"There are economic consequences too.

"Any world slowdown will have consequences for the small business, no longer able to sell its goods.

"For the man or woman who has just lost their job.

For those reaching retirement who see the value of their pension nest egg fall.

"One of the most important things that we can all learn from events of this kind is humility. Those who claim that they can abolish the economic cycle forget that no government can ever know what may be just around the corner.

British Economy

"On the face of it, our economy seems to be in reasonably good shape.

"It is true that interest rates and inflation are low although the latest set of figures show that inflation is above the target set for the Bank of England.

"But beneath the surface, there are worrying signs, and they were there before.

Role of Government

"The role of government is to lay the right foundations, so the economy will be strong enough to withstand ill winds.

"In some cases Gordon Brown has made the right decisions. I give him credit for that. I always will. Let me make one thing clear. This is not an Opposition which will criticise for the sake of it. But we shall criticise when the Government lets the British people down.

Causes for Concern

"When economies have strong foundations, they are balanced enough to weather the storm.

"But in Britain in recent years, these foundations have been weakened.

"As a country we are spending more than we earn. Our share of world exports is down. And imports have exceeded exports for five years in a row for the first time since the 1870s. This cannot go on indefinitely.

"And Government spending is growing faster than the economy.

"If this trend continues, further tax rises are inevitable.

"Yes, further tax rises over and above all the stealth taxes we have already seen. The increase in Stamp Duty for people buying a home. The tax on pension funds, harming those saving for retirement. The spiteful withdrawal of tax relief on health insurance for the elderly.

"And perhaps most important of all, the ability of British business to compete at home and abroad has been undermined.

"Much of this is the result of new taxes and regulations.

"We all know about the fuel duty increases. Even Gordon Brown might by now have registered how unpopular they are. But that's just the start. Did you know that from this year, manufacturers who are already in recession will be faced with a new tax on the energy they can't avoid using? Or that IT entrepreneurs are being driven from the country by a new tax called IR35?

"Not long ago we were streets ahead of our European neighbours in terms of the tax advantages we enjoyed. Now PriceWaterhouse Coopers say that two thirds of that advantage has disappeared, as their taxes come down and our taxes go up.

"That makes a real difference to the ability of British business to win orders and create jobs.

"So do new regulations.

"New trade union rights. New European negotiating machinery. The burdensome Working Time Directive.

"In all, the independent House of Commons Library say that 3,865 new regulations were introduced last year alone, the highest figure on record. That's more than ten new regulations for every day in the year including Christmas Day and Boxing Day.

"So is it surprising that we have slipped down the World Competitiveness League from 9th, when we left office, to 19th? Even Belgium and Iceland are now above us. It's a good thing this isn't the World Cup!

"Is it surprising that manufacturing is in recession, with the Secretary of State for Trade and Industry admitting that ‘even before the 11th of September, thousands of manufacturing workers were losing their jobs'?

"And is it surprising that productivity Labour's ‘fundamental yardstick of economic performance' is rising more slowly? An Institute of Directors survey showed that owners of small businesses are now spending six hours a week just dealing with red tape. Six hours which they can't spend doing what they want to be doing winning orders and creating jobs.

"Is it any wonder that productivity is suffering?

"`The bottom line', say the British Chambers of Commerce, ‘is that the sheer quantity of red tape on business is damaging our economy, stifling enterprise, job creation and economic growth'.

"These problems developed during a time of world-wide growth. They were there before September 11th.

"The strong foundations of our economy were being eroded. Step by step. Tax by tax. Regulation by regulation.

"That is why we are now less well placed to weather any world economic slowdown.

The Future

"Of course the events of the last four years are history.

"What is important for every family and business in Britain is that the Government gets things right over the next four.

"And they must start now.

"They could start by taking action to remedy some of the harm they've done to our ability to compete.

"Unless we improve the ability of British business to win orders and create jobs we shall never be able to improve the quality of life of the British people.

"And that is our one overriding objective. To make people's lives better. That is how we will be judged. The task before us is to put in place practical policies that will show the people of our country that we can make their lives better.

"And never have such policies been more badly needed.

Public Services

"In the last few years we have seen a sharp decline in our public services.

"Let me give you one or two examples.

"If there is something wrong with your heart you need to see a cardiologist as soon as possible. The target date is that you should see one within 13 weeks.

"In my part of the world, in East Kent, in March 1997 just at the end of our period in government there were 40 people with a heart problem waiting more than 13 weeks to see a cardiologist. I'm not proud of that. It's 40 too many.

"But in March 2001, after four years of Labour Government, how many people do you think there were in East Kent waiting more than 13 weeks to see a cardiologist? Not 40. Not 140. Not even 240. In March 2001 there were 269 people waiting more than 13 weeks to see their specialist.

"Many of them will never get to see their cardiologist. They will die first. I'm talking about my constituents, my neighbours, my friends. But this is not a problem that is unique to East Kent. It is just as bad in other parts of the country.

"It makes me very angry.

"It makes me very angry that people die from cancer in this country when they would not die if they lived in France or Germany. Is it any wonder that the French Minister of Health last week described our health service as ‘medieval'.

"It makes me angry that many of our schoolchildren do worse than those elsewhere.

"It makes me angry too when this cynical Government uses this world crisis to give cover for decisions it wants to sneak out, like the disgraceful decision to confiscate Railtrack. According to today's Independent capital markets are being forced to learn the hard way that it doesn't pay to trust the Government. Join the club!

"We can do better than this. We must do better than this.

"We won't under Labour. They can't do it. And we saw the reasons why at their Conference last week.

"When push comes to shove, they do a deal with their trade union paymasters as Stephen Byers did last week. When push comes to shove, their old, gut prejudice against the private sector gets in the way.

"We do not suffer from these disadvantages. We are able to harness every resource to this supreme task of improving the health and education of our country. We will show clearly, credibly and convincingly how we will make people's lives better.

Tony Blair's speech

"Last week Tony Blair addressed his Conference in Brighton.

"Parts of his speech were very fine. His words touched many a chord his condemnation of terrorism, his passionate emphasis on the values of justice, freedom and democracy, his attack on anti-Americanism.

"But there was a good deal in his speech with which I did not agree.

"When Tony Blair emphasised the need to enable people from underprivileged backgrounds to fulfil their potential, he was right to do so. But he was utterly wrong to give the impression that only he and his Party have this goal.

"He was right to praise an American system which enabled Colin Powell, for example, to rise to such heights of office. But he conveniently forgot to say that Mr Powell is Secretary of State in a Republican administration castigated and derided by many of Mr. Blair's friends as extremely right wing.

"I am the son of an immigrant. I was educated at a local grammar school, later abolished by Labour. I became Home Secretary in a Conservative Government.

"The first Jewish Prime Minister of our country was a Conservative. The first woman Prime Minister was a Conservative. I very much hope that the first Asian and black Prime Ministers of our country will be Conservatives too.

"The fact is that every mainstream political party wants to enable everyone, regardless of background, to fulfil their potential. We differ only on the means to achieve that shared objective. It is utterly wrong to suggest that only the Labour Party are interested in this goal, or that only they believe in social justice.

Conclusion

"As we look to the next four years, let no-one underestimate the importance of the contribution our Party can make.

"When our health service is less effective in improving people's health than those of many other countries, it will be up to us to show there is a better way.

"When teachers leave in droves, and school standards too are below those of many of our neighbours, it will be up to us to show there is a better way.

"When police numbers are down, and crime has gone up for the first time since 1993, it will be up to us to show there is a better way.

"When the tax burden on the poorest fifth of households in our country eats up 41p of every pound they earn, it will be up to us to show there is a better way

"Iain Duncan Smith will lead us along that way.

"I believe he will prove himself one of the great leaders of our Party and, in due course, of our country.

"He deserves the unstinting support of each and every one of us.

"Our task now is to show how we can make people's lives better.

"Let's get down to work."