Decision Time: New Politics, New Economy, New Britain?

Jeremy Corbyn MP, Leader of the Labour Party, speech to the British Chambers of Commerce conference:

I’d like to thank John Longworth, your director general, for that introduction, and Dr Adam Marshall, who is chairing the conference.

It’s an honour to be asked to speak to you especially on the subject of a ‘New Politics, New Economy, New Britain’.

Because those are almost exactly the three main pillars of the platform I was elected to lead the Labour party on, I’m sure that’s just a coincidence.

But those three pillars are the foundations of everything we do.

The first is about a new kind of politics: that aims to democratise our public life from the ground up, giving people a real say in their communities and workplaces breaking open the closed circle of Westminster and Whitehall.

The second pillar is for a new economics: one that puts investment, productivity and sustainable growth first, instead of a self-defeating austerity aimed at shrinking the state for an economy fit for the 21st century that works for everyone, where prosperity is shared.

Our third pillar is about a new relationship with the rest of the world: one based on trade, co-operation, human rights and conflict resolution, where war is a last resort.

Today I want to set out today how that agenda can work for you and the tens of thousands of businesses you represent across the country.

To shape that new economy we need to work together. It is only through effective co-operation between government and business, state and markets, public and private, education and enterprise. That we can build an economy for the future that delivers for all.

It’s that spirit of cooperation that drives the work of local chambers of commerce across the country.

St Helen’s chamber, for example, helps to train young entrepreneurs, equipping them with skills through the St Helen’s business school, and helping to make sure local business and enterprises have the information and workforce they need to grow and prosper.

Many accredited chambers of commerce across the UK are working to bridge the gap between work and education.

And I hope to be visiting more of your local chambers, including in Greater Manchester and the North East, in the months to come.

Our shadow chancellor, John McDonnell, has started to lay out the framework of a new economics.

As John has said many times, an economy that allows people to flourish and prosper in the 21stcentury will be a very different kind of economy from that of the 1990s, let alone the economy of the 1940s or 1960s.

What’s clear is that this government is not creating the economy of the future we need. Six years ago George Osborne said austerity would wipe out the deficit and cut the debt.

That didn’t happen. Instead, recovery only got going once the chancellor took the brakes off and pumped up housing credit to get through the general election.

Osborne’s recovery is a house built on sand. But what Labour now stands for is far more than stopping the damage being done by this government.

We want to see a break with the failed economic orthodoxy that has gripped policy makers for a generation.

The idea that speculative finance would deliver for all that manufacturing could be run down and our strategic assets sold off that the 1980s catechism of deregulation, privatisation and low taxes on the well-off would produce balanced, high investment and productivity growth has been shown to be for the birds.

That model of how to run an economy is broken crashed and burned in 2008 and not just in Britain.

The results have been a lop-sided economy the rapid growth of insecure, low-paid jobs, sluggish private investment declining productivity and stagnating or falling incomes for the majority.

Labour’s alternative will put investment first. We will only borrow to invest over the business cycle.

We will put public investment in science, technology and the green industries of the future front and center stage.

Only by driving up investment will we achieve the higher productivity we need to guarantee rising living standards for all.

We want to see the reindustrialisation of Britain for the digital age driven by a national investment bank as a motor of economic modernization based on investment in infrastructure, transport, housing and technology. That provides a solid return.

I want to change the way our party makes policy.

When politicians and advisers sit round a table and devise policy, they rarely succeed in getting to grips with the real problems our country faces.

We need to involve more people in decision-making and consult far more widely outside politics.

I believe it’s essential to listen:

To the growing army of the self-employed, often struggling to make ends meet, and falling through the cracks in our social security system;

to entrepreneurs seeking to innovate and create wealth;

to business people shaping a more dynamic, responsive economy.

Only by engaging can we develop a comprehensive plan to forge a new economy and the kind of Britain we want to see.

That is why John McDonnell is touring the country with a range of speakers discussing what the economy should look like in 2020, and why he and our shadow business secretary Angela Eagle are drawing on the ideas of advisers such as the Nobel Prize winner Joseph Stiglitz to help shape our policies for the future.

We want to see a genuinely mixed economy of public and social enterprise along with long-term private business commitment that will provide the decent pay, jobs, housing, schools, health and social care of the future.

An economy based on a new settlement with the corporate sector that, yes, involves both rights and responsibilities.

Labour will always seek to distribute the rewards of growth more fairly. But, to deliver that growth demands real change in the way the economy is run.

Change that puts the interests of the public, the workforce and the wider economy ahead of short-term shareholder interest.

Only an economy that is run for wealth creators – the technicians, entrepreneurs, designers, shopfloor workers, and the self-employed – and puts in them in the driving seat… is going to deliver prosperity for all.

Wealth creation is a collective process between workers, public investment and services, and creative individuals and businesses.

It cannot be based on a race to the bottom in pay and job insecurity, or the subsidy of low wages with in-work benefits. That’s why we’re in favour of a real living wage and stronger trade unions.

That will not only benefit employees, but help prevent good employers being undercut. As the evidence shows, collective bargaining boosts productivity as well as protecting workers.

George Osborne and Sajid Javid think the solution to the problems businesses and workers face is to cut back government.

But it wasn’t government that was the problem in 2008, when the banking sector drove the economy to the point of collapse.

The political consensus at that time was to opt for ‘light touch regulation’ of finance – and sit back and collect the tax revenues.

But you cannot base a decent social policy on an unsustainable economic policy.

And we cannot outsource economic policy to the City of London. That has not served our economy well, and it has not served business well.

The way that banks in Britain have treated small and medium-sized enterprises in particular has been a textbook failure.

The banking sector has to be reformed. Finance must support the economy and not be an extractive industry that treats consumers, entrepreneurs and businesses as cash cows.

We need a new ecology of finance. That means encouraging credit unions and small business support.

We need a national investment bank at the heart of economic policy to target investment on key public and economic priorities, not just for quick returns.

And we need to reform the major banks so that they serve the wider economy, not just themselves. That includes; using the public stakes in banks such as RBS to drive lending and investment and rebuild supply chains.

For some politicians, the state is only a burden, to be reduced or removed.

But we see a crucial role for the strategic state to create the conditions for people and businesses to thrive and deliver prosperity that is stable and shared.

Look at some of the problems facing Britain today:

The NHS is in crisis – there are record deficits in NHS trusts, and they come from two key mistakes by government.

First, there is the legacy of PFI debt – an inefficient way of delivering necessary investment.

The last Labour government lacked the confidence to make the argument to borrow to invest, and so it did what banks thought they could get away with before the crash, an off-the-books accountancy wheeze.

In both cases, putting debt off the books did not work it came right back onto the books and helped trigger crisis.

Secondly, we have not trained enough nurses and doctors – and the problem is becoming more acute.

It means the NHS is spending £4 billion on agency staff to fill gaps.

It also means we are reliant on importing nurses and doctors from abroad.

The Government argues migration must be reduced, but then fails to fund training leaving us reliant on migrant labour to fill skills gaps.

But the education and skills training gap goes far wider.

Across the country, this is the one issue local business people most often raise with me.

Yet this government has cut college funding and slashed the adult education budget.

On the one hand; there are university graduates unable to find a graduate-level job. While large numbers of unemployed workers are unable to acquire the skills they need to work.

And on the other; businesses in all regions are struggling to recruit workers with the right skills.

As the BCC’s own Businesses and Education survey found 88 per cent of businesses think school leavers are unprepared for the workplace.

That’s why I have been campaigning for lifelong learning; for a national education service to support workers throughout their lives in re-training and re-skilling.

We will be consulting with the education sector and employers about how we can renew skills throughout our lives.

And I want you to participate in that process.

Apprenticeships have a crucial role to play and we must do more invest in vocational education and training.

But some apprenticeships are clearly too low quality and look rather more like attempts to avoid paying the minimum wage;

Secondly, the Government’s apprenticeship levy, hasn’t been properly thought through. The policy risks being simply, an additional tax on businesses, so that the Government can meet its arbitrary target.

Apprenticeships should be about quality training for employees, to acquire the skills they need to help businesses grow and become more productive.

Then there is the problem of infrastructure. Think about the creaking, underfunded infrastructure our country relies on.

In a recent survey the CBI found that two-thirds of businesses are concerned about the slow pace of infrastructure delivery.

The Centre for Economics and Business ranks the UK thirteenth on the value of its infrastructure, behind every other G7 country bar Canada.

Enterprise and innovation cannot flourish when our roads and railways, ports and airports are lagging behind our competitors.

But infrastructure means the digital economy as well.

Our digital and communications market, as Ofcom recognised last week, is simply not working.

Chile, Estonia and Iceland all have a higher percentage of premises connected to fibre-optic broadband.

Businesses simply cannot expand, particularly in rural areas, without improvements to our digital economy.

The evidence is clear that only the public sector and public investment can guarantee the super-fast broadband network in every part of Britain the essential low-cost connections people and businesses need in a 21st century economy.

As it is, government foot-dragging and ideological dithering is holding digital Britain back.

Finally, we lag alarmingly behind the rest of Europe on renewable energy.

The transition to a carbon-free economy is essential because of the climate crisis but it’s also a massive opportunity for investment and growth.

Yet Britain sits on the sidelines with some of the lowest production and use of renewables in the G7.

It requires a strategic government to lead.

If the state retreats and shirks its responsibility to provide the conditions for growth, rebalancing the economy will remain a pipedream.

The Chancellor has already slashed public investment in infrastructure by over £20bn in real terms since the last year of the Labour government.

And it is scheduled to fall by nearly £5bn more by 2018-19.

Borrowing to invest in infrastructure makes economic sense.

It helps businesses to grow and, as the OECD argues, will pay for itself.

And as the OECD recommends, Labour will commit to spending at least 3.5 per cent of our GDP in infrastructure investment while the Tories will spend less than half that.

We should be laying the foundations for a modern economy now.

That applies not only within states but between states too; climate change, the refugee crisis, raising standards for workers and consumers and dealing with the minority of companies that seek to avoid their taxes

These are all issues that can only be resolved by working with our partners in Europe, not ditching them.

This is why we are campaigning to remain in the EU because we believe, like 60 per cent of businesses the BCC surveyed, that the EU is the best framework for trade and cooperation in the 21st century.

But our failure to invest and our determination to sell off assets have left us with a current account balance that is forecast to be the worst of all the G7 countries this year.

Britain should not be selling off our nation’s assets to pay our way in the world. You can’t survive for long paying the rent by flogging the furniture.

Britain needs to be exporting high-tech, innovative products to the world not standing by and watching our exports stagnate or shrink.

We cannot be satisfied that our growth is currently driven by low-interest rates, record low oil prices, property and debt. Those factors cannot be sustained indefinitely.

All these economic problems are connected. Lack of access to finance constrains export growth.  A failure to invest in our digital economy stifles productivity growth. A dearth of skills holds back innovation.

In the twenty-first century the role of Government is to understand these connections and make policy to fit.

You may not like everything we say or do. But when it comes to the big decisions on the economy, infrastructure, skills and investment, we are natural allies. Labour is committed to what is needed for business to expand and succeed.

We expect business to put more back into the economy but we will do more to give the economy a stronger future.

And if we’re going to shape a New Britain, it can only be done through cooperation; between public and private, state and market, government and entrepreneurs and workforce and employers.

It is that spirit and practice of cooperation, which drives the great work of local chambers of commerce throughout Britain.

Thank you