Orders of the Day — Budget Resolutions and Economic Situation

Part of the debate – in the House of Commons at 5:30 pm on 10th March 1999.

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Photo of Stephen Byers Stephen Byers Secretary of State, Department of Trade and Industry 5:30 pm, 10th March 1999

I have taken a number of interventions; I will give way in a few minutes, when I have made some progress.

The International Monetary Fund report published on Monday shows the extent to which impartial observers think that the economy is doing well. The IMF gave the economy a glowing bill of health and its report praised the United Kingdom's impressive economic performance in recent years and the Government's skilful management of the economy.

The IMF said that the private sector fundamentals were strong and that any slowdown in the economy would be short-lived. It gave credit to the new monetary policy framework for leading to timely and judicious changes in interest rates and welcomed the Government's basic welfare-to-work thrust as improving the work of the labour market. When the IMF had analysed the Government's approach to the economy, it strongly endorsed the attitudes that we have adopted.

As the Chancellor said yesterday, we understand that there will be difficulties, with a quarter of the world in recession and world growth being cut by half. We have to overcome those short-term difficulties and we believe that the steps that we have taken, which will be carried through by the Budget, will ensure that we can steer a course of stability. Conservative Members know that full well and that the economy is now in a strong position. We need to build on that strength. In particular, that means that we must seize the opportunities provided by the knowledge-driven economy of the future. If we fail to do that, we will be left behind as a country and as a people.

Success in tomorrow's fast-moving world depends critically on how well we exploit our most valuable and distinctive assets—the knowledge and the talent of the British people. The first industrial revolution was based on investment in capital and machinery. The revolution that we are going through requires investment in human capital—in skills, in learning and in education. That commitment comes from the Government.

Here is a message for all industry: knowledge is increasingly important not just for new industries; it will affect old, traditional industries just as much. They must embrace the knowledge-driven economy. Some are doing so, but all the traditional sectors need to do so if they are to prosper.

Last December's White Paper on the knowledge-driven economy set out a model for industrial policy for the next century. First, we must invest in British capabilities—in particular, our world-class science and engineering base and our skills. Secondly, we must act as a catalyst to collaboration between businesses and between businesses and our important science base. Finally, we must promote greater competition—principally, by empowering consumers, but through regulation where necessary. That is why I said to the House earlier that we will fully implement the 75 commitments in the White Paper. An implementation plan, which will show clearly how we intend to deliver on those commitments, has been published today.

A more fundamental challenge faces us all and goes beyond government: how can we end the poverty of ambition in Britain, which has held us back for too long? In government, in business, in universities, in schools and throughout society, we must foster a new spirit. We must be prepared to seize opportunities to turn new ideas into successful products and services and be committed to constant innovation and improved performance. Yesterday's Budget was an important step on the road, introducing measures that will encourage the new spirit of enterprise.