5 Things We Can Do To Grow The Economy

I can report to you an economy that is growing, and growing well; forecast to grow 3 times faster than Germany this year. An economy that is generating jobs – generating jobs faster than almost any other G7 country; we’ve seen 1.4 million private sector jobs created over the last 3 years.

We’ve still got a long way to go, but I can report to you that there are 400,000 more businesses operating in Britain; so I think our economy is on track. We’re on our way. We’ve got a lot of work to do but we are on the right track.

I want to lead a government that is pro-business, pro?enterprise, pro-growth. I’ve listened to your agenda, and I’ve tried to respond to every part that I can. We’re seeing some good results. The UK, in the first 6 months of this year, was the biggest recipient of foreign direct investment anywhere in the world; bigger than Brazil, bigger than America, bigger than China. I think that’s an extraordinary set of figures.

So, we are making progress, but the fundamental challenge that we face, as a country and as an economy, remains the same, which is we need a fundamentally different economic model. We need a more balanced economy. We want to be not so reliant on the South East of England, not to be so reliant on finance. We want a recovery that is for all. We want a more resilient economy. And that remains the huge challenge, and I want to address the 5 things that I think will make a really big difference in terms of getting that rebalanced, stronger economy that delivers a recovery for all.

The first thing is that we have to continue with Plan A. We have to continue to reduce the deficit. Now that doesn’t just mean cuts, although we have had to cut public spending and we’re going to have to go on making difficult decisions into 2015, into 2016. But it also means something more profound, which is building a state that we can afford and making sure we do some fundamental reform of our public services.

The second thing we’ve got to get right is education. Here’s one, I think, thoroughly depressing figure for you: 64% of children on free school meals don’t get 5 good GCSEs, including English and Maths. If you don’t get 5 good GCSEs, including English and Maths, it is difficult to play a successful part in a modern industrial economy. So we’ve got to improve on this. What I want to see is a new norm, so that as people leave school they’re either taking a path doing A?levels and then to university or they are taking a path that involves a proper apprenticeship and skills training. Now, we’ve seen 1.5 million people start apprenticeships over the last 3 years, but I want to see that built on.

The third is welfare reform. To me welfare reform is very much part of our economic plan, because if you don’t reform welfare you have a danger that you have people stuck on welfare year after year and, indeed, sometimes generation after generation. So I hope you’ll give the support for the radical welfare reform plans that we have: capping welfare so that no family is better off on benefits than you would be in work. For every extra hour you work, every extra job you do, you should always be better off.

The fourth thing we’ve got to do after welfare is invest in infrastructure. I said earlier, we’ve prioritised infrastructure, so while we’ve made some difficult cuts in current spending, we’ve seen infrastructure investment grow – there is far more we need to do in the years ahead. Our plans, I believe, are really ambitious. What you’re going to see is a trebling of expenditure on our roads, a roads programme as big as the one in the 1970s; the investment in railways is now bigger than at any time since Victorian times, a massive programme of electrification and, of course, vital new routes like Crossrail, currently burrowing under London – the biggest construction project anywhere in Europe – and of course, the vital investment in HS2.

I’m passionate about this; we need to build new railway lines in our country. We haven’t built a line north of London for 120 years. Now when people challenge me about HS2 I say this: the West Coast mainline is full. Thousands of our fellow countrymen are standing everyday as they come in to Euston or they go into Birmingham. We need to build another West Coast. So the choice for us as a country is, do we build one of the old Victorian style railways or do we build one of these new intercity lines. I believe it’s absolutely right to make this investment. It’s going to unite our country, drive economic growth, make sure our economy shares growth between the North and South, it will link 8 of our 10 biggest cities.

And to people who say, ‘Well is it going to take up too much of the government’s budget?’ Between 2015 and 2020 we’re going to be spending ￡73 billion on road and railway investments. HS2 is ￡16 billion of that. We’re going to be spending 3 times as much on other projects as we are on HS2. I want to make sure we get every penny and value for money from this HS2 investment.

And the fifth is this, which is slightly more esoteric, but nonetheless important. In order to have a rebalanced economy, a more resilient economy, an economy that can succeed in the global race we’re in, we need to have a real culture change in our country in favour of enterprise, in favour of business, in favour of industry.

Now there are some things that the government can do. Obviously we can help encourage entrepreneurship. We’ve set up Start-Up Loans which are incredibly successful. The New Enterprise Allowance to encourage unemployed people to start up their businesses. We’ve introduced the EIS scheme that people tell me is now probably the most generous tax break for people starting up new businesses, anywhere in the world.

But there’s only a certain amount government can do, and this is what I want to enlist your help for. Earlier on I talked about the agenda items of yours that we had taken up; this is an agenda item of mine that I’d like you to take up. We need to get more businesses into our schools to inspire young people about enterprise, about small business, about entrepreneurship and about industry itself. And there’s an excellent organisation called Speakers for Schools, which gets speakers into schools to inspire young people.

So, those are the 5 things that I think that can make a difference; the things that will make sure we’re a successful economy in the future. And it’s not some dry business, economic agenda. In the end, I believe this is a deeply progressive agenda. If we have a state that we can’t afford and we keep running big deficits, it’s the poorest in our country who suffer. If we have an education system that is okay for an elite, but is not helping people from challenging circumstances, we let down the poorest in our country. If we don’t reform welfare we have people stuck, generation after generation, in workless households, unable to build a better life for themselves and their families. If we don’t have proper infrastructure we’ll have an economy that is great for the South, but not good enough for the other parts of our country. This is about making sure everyone in our country has the chance to play a part, to participate, to fulfil their aspirations.