“Labour will value the entrepreneur as much as the nurse or teacher”
Ernst and Young, 1 More London Place
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Three weeks ago this morning, Labour was waking up with a monumental headache.
And let’s be honest, it still hasn’t cleared.
We are only just beginning to bring ourselves round and work out what happened.
The truth is too few of us saw the punch coming.
And we must all take our share of responsibility for that.
Politics is a bruising business but, as any boxer knows, there is no point going back in the ring until you have been brutally honest with yourself about why you lost.
Otherwise, you will just get knocked out again — only worse.
To be fair, it was always going to be difficult to get up off the floor in 2010 and come back to Government at the first time of asking.
And we managed to put up a fight.
We developed a powerful critique about how globalisation and the casualisation of work had changed lives and left people feeling insecure.
We had good individual policies.
But they didn’t add up to a winning ticket or a convincing whole.
And the painful fact is this: though we pride ourselves on being the party of the many, we only had answers for the few. Too few. Our appeal was too narrow.
Labour didn’t just lose votes to our traditional enemy. We lost them to UKIP in seats across England and Wales, and to the SNP in Scotland.
One way to look at this is as three separate defeats, requiring three separate remedies.
But Labour must take care not to fall into that trap.
If we’re being really honest, we have a much deeper which underlies our loss of votes to all parties.
And it requires us to act and to change if we are to avoid the same fate in 2020.
The plain truth is this: people in all places have lost an emotional connection with us; a sense of what kind of people we are; what Labour is for.
Too many have come to see the party as part of an out-of-touch establishment, a metropolitan elite, not listening to their concerns on immigration or benefits.
Too many in business looked at us and did not see a Party which they felt understood their challenges or was on their side.
And across the UK, people had lingering doubts about our economic competence.
Many were undecided right up to the wire in this Election. They were no great fans of David Cameron, his Conservatives or the Coalition.
But, in the final analysis, they saw Labour as a risk they couldn’t take.
They did not see clearly enough how we would help secure their family or their business.
The ballot box, just like the boxing ring, cruelly exposes weaknesses.
But the great thing about our country is, if you are prepared to face up to what those weaknesses are, truly to take on board what people were saying, then you can gain another hearing and bounce back quickly.
That is what Labour under my leadership will do.
I am the kind of politician who listens closely to what people say on the doorsteps and in the pub at the match.
And I have shown in my career that I am not just prepared to listen. I will take the message back and act on it too.
That is what leadership means.
It is how I will lead.
I have spent the early days of this campaign facing up to what people are saying about why they lost trust in us — on economic competence, spending and immigration.
And today I want to focus on another weakness — our relationship with business.
I am clear that no political party can win a British General Election if they convey any sense of being anti-business, wealth creation or success.
But I also want you all to know that I am not the kind of person who just comes to make speeches like this to say the right thing and tick the right boxes.
And Labour needs to do much more than that if it is win people’s trust again.
You only win if you can communicate a convincing sense of who you are and what you are all about; why you want the job; and what you will do with it.
So this is where I want to start in this my first major speech of this Leadership campaign.
And it goes back to my own beginnings.
I am the comprehensive lad who went to Cambridge and then into the Cabinet; the grandson of a Liverpool lorry-driver and a cleaner who was determined to make a break with her humble beginnings and own her own home; the son of a telephone engineer and a GP receptionist who moved heaven and earth to make sure my brothers and I would be the first in our family to go to University.
I have always done things on my own steam. I didn’t get in to Cambridge on family connections. I wasn’t parachuted into my constituency. I wasn’t made a minister because of trade union patronage.
I have always been my own man — and I will keep it that way as Leader.
But I have been helped up the ladder by so many people and I want to make sure that ladder, which is a lot more rickety than it used to be, is still there for people like me coming through now.
My background epitomises what Labour should be all about: helping everyone get on, whoever they are and wherever they come from.
And that background has given me a better understanding than most of what aspiration — the new political buzzword of our times — really means.
Politicians make a terrible mistake when they try to compartmentalise the voters, speaking only to some in certain parts of the country or those who frequent certain shops.
Aspiration is not the preserve of those who shop at John Lewis. It is universal; felt just as keenly by Asda and Aldi shoppers, perhaps even more so.
But the difference is this: the odds on people actually achieving their aspirations varies greatly.
Some still have the odds stacked against them.
This is, when it all comes down to it, why I became a politician and why I am standing before you now applying for this job.
It is because of that sense of injustice which I felt, when I finally arrived at Cambridge, in my first job in publishing, and in Westminster — when I looked around me and realised that, when you’re trying to make your way in the world, connections and background too often count for more than talent and hard graft.
So, in this contest, when people ask: ‘What will the Labour Party you lead be for?’
My answer will be simple: to help everyone get on.
Every person, every family, every business — whoever they are, wherever they come from.
That is what my Labour Party will exist to do: help people get on.
I have never believed in levelling down, denigrating success or the politics of envy.
Nor have I ever believed that people should be handed everything on a plate.
But I believe passionately in everyone having a fair chance in life.
It worries me that, in some people’s eyes, Labour has become associated with giving people who don’t want to help themselves an easy ride.
We must change that perception before we can win again.
The Labour Party I lead will be once again truly the ‘Party of work’ — where, if people are prepared to put in the hard graft, their accent or background must never hold them back.
Where all young people who get the grades will have real prospects at the end of school.
Most people want broadly the same things in life: to get a good education; to own their own home; to get a decent and stable job; maybe to start a business; to set their kids up as best they can; and to pass on to them what they have worked for.
But the reality is that these simple things are becoming more distant dreams for millions, and they worry their children will find they have disappeared altogether.
So, throughout this leadership campaign, I will set out my ideas for how we make these basic human aspirations an achievable reality for all.
This is the cause which I ask people to join.
It is a cause which I believe is bigger than me, bigger than my Party.
It is a cause which I believe can win support across communities, businesses, and people right across Britain.
And it is a cause which can change our country for the better — because it gives everyone a sense of hope for the future.
That is how Labour wins again: with simple, resonant, convincing policies that speak to everyone’s aspirations and are part of a bigger cause to change Britain.
And it’s that emphasis on everyone that sets us apart.
The philosophy of others is about a lucky few escaping their backgrounds; that for every winner there must be a loser.
I believe we are all stronger when everyone has hope and no-one is left behind.
That is how we make our society stronger, less divided, and is how we rebuild the broad coalition of voters that put us into power in 1997.
And it explains why this contest for the Leadership of the Labour Party is relevant to all of you and to businesses throughout the UK.
We have just come through a General Election which has left us more divided as a nation and more uncertain about our future.
The plates are shifting beneath us.
Do any of us really know where the UK will be in 10 years time?
We will still live in the same country of four nations? And will that country be a leading member of the European Union?
This is why I passionately and profoundly believe that the Labour Party, for all our weaknesses, still matters to you all; and why I believe British business urgently needs us now to regain our strength, confidence and our voice.
We are the only Party with reach into all parts of the UK.
When our main opponents are playing with the fire of nationalism for their own interests, we are the political force best-placed to hold people and the country together.
And when those opponents are sending mixed signals to our European trading partners, we are your best bet to secure your businesses prosperity and place in the market.
Make no mistake — these are dangerous political times.
This country is staring straight at some of the biggest political challenges in its history.
If we are strong when we face them, then your voice in that debate will be stronger too.
That is why Labour matters to you, and to this country.
But I know we will only regain its strength if we reach out, listen to you and rebuild a broader coalition of support.
I put myself forward to lead my Party because I believe I am the man to do that.
I will be a Leader people can relate to, who can speak to people in all our regions and nations, who can bring them together.
For too long, my own party has been pulled this way and that by different agendas.
I can move beyond all that because my politics comes from the heart of Labour, not factions within it.
I will draw a line under the stale old debate that says after an Election defeat the answer is to jump left or to jump right.
Because the public simply don’t see life that way.
The change they are looking for is someone to call time on politics as usual and take it out of the Westminster bubble.
This is the change that I think Labour needs and, if you agree, then I am your man.
My appeal is to everyone who sees things the same to join me in being a force for change in Labour, so we can once again be the force for change in our country.
I know that I cannot build that broad coalition to help sustain our country in these troubled and fragmented times without the support of business.
And that is why I am here today.
We will not make progress until Labour is listening to business again and seen to be on their side.
I know many people who run their own business, and indeed those who work for them, feel Labour was not for them.
My wife has run her own business, having spent all her career in the private sector.
When she set up on her own a few years ago, I saw how much pressure it placed on her and she lived every setback and every triumph.
People who run their own businesses invest so much in what they do. Most feel a huge sense of responsibility to the people they employ, the communities in which they work, and take on a huge amount of worry about all of those things.
They know that small changes to public policy can have a big impact on all this. So they watch quite carefully what people like me have to say.
When did they last hear a Labour politician say thank you for what they do — for employing our constituents and investing in our communities?
Nowhere near enough is the answer and that is why many conclude that we don’t see things from their point of view and are not on their side.
And this is where I want to signal an important change.
I think part of the way Labour got it wrong on business in the last Parliament was that we simply didn’t say enough that we value what you do — creating jobs and wealth.
We didn’t celebrate the spirit of enterprise.
Far too rarely over the last few years has Labour spoken up in praise of the everyday heroes of our society.
The small businessman or woman.
The sole trader.
The innovator, the inventor, the entrepreneur.
The businesses that feed us, cloth us, keep our houses warm, get us to work, entertain us.
The small businesses that become big businesses.
The people with the creative spark to think of a new idea and the get-up-and-go to make it work.
Who often have to fight against the odds to succeed, but put in the hours, the sweat and the hard graft to do it.
The people who take risks, have sleepless nights.
So I want this message to go out loud and clear today: in the Labour Party I lead, they will be as much our heroes as the nurse or the teacher.
Labour must always champion wealth creation, and show we understand that, if we want world-class public services, and if we want high-skill, high-wage jobs, then we must wholeheartedly support the businesses that create the revenue to pay for them.
Of course, we have to do more than talk the talk.
We have to back it up in our actions.
Not enough business-people were convinced that we would secure sound public finances or run the economy in a way that could create the jobs of the future.
No-one denies that we were right to highlight growing inequality, or the fact that too many people are living lives on low wages with insecure employment. These issues are important to the business community too.
But too few people believed that we had a comprehensive plan to narrow that inequality — through creating a modern, dynamic and innovative economy.
Because that is the only long-term way we can help everyone get on and fulfil their aspirations.
It wasn’t that we didn’t have some good policies for business; we did.
Like a British Investment Bank to boost lending; or a commitment to cut business rates; or plans to give business more control over skills and training.
But we didn’t knit our policies together into a convincing story of renewal and regeneration and, while many were individually good for consumers, collectively they gave the impression that they were bad for business.
So now we need to ask for your help in developing a route-map to our progressive goals in a way that can command much broader support across the business community.
Crucial to that is our approach to the deficit.
The defining question of the last days of the Election and the aftermath was this: did Labour spend too much before the crash?
Ironically, the Tories didn’t use to think that we did — they backed Labour’s spending plans right up until 2008.
They even described the spending settlement I negotiated across government as Chief Secretary to the Treasury in 2007 as “tough”.
And the truth is that Labour did fix the roof when the sun was shining — the leaky roofs of the crumbling schools and hospitals we inherited.
That investment did not cause Lehman Brothers to collapse.
But, with hindsight, we didn’t get everything right and, at the Election, we didn’t do enough to acknowledge the doubts people had about our management of the public finances.
If we are to win back trust, we have to start by admitting that we should have been reducing the deficit more quickly in the years before the crash — and that this would have left us better able to resist its effects when it came.
We did not — indeed could not — abolish boom and bust.
And so prudence, as a watchword and a way of running the public finances, should have been better adhered to in those middle years of the last decade.
But let me be clear: in saying this, I am not conceding the record of the last Labour Government.
Far from being profligate, we had reduced the debt in the ten years leading up to the crisis and by historic standards the deficit was small.
But it was still too high and the banks were not sufficiently regulated, here or abroad.
So the starting point for a future Labour Government will be to establish a sound financial footing from the outset.
If the current Government again fails to balance the books, the next Government under my leadership will make it an immediate priority.
Because we can’t go into the next election, as we did into the last, with business and the public unclear on how Labour will balance the books, or when we will do so.
It is only by addressing the current account deficit and debt that we will be heard again by business, and the wider country, on the other issues crucial to our success as an economy.
But our plan is not a Tory plan — because public spending cuts cannot bear all the brunt of deficit reduction.
Instead, Rachel will lead the development of a detailed plan for growth, for infrastructure, for business investment, for the new economy and for the jobs of the future.
And the delivery of that plan that will be the single highest priority of the next Labour Government.
That is because our future prosperity depends upon it.
The lesson of the last decade is this: with our dependence on growth and tax revenue from too few industries, in too small a part of the UK; with high private sector debt; with big banks who had taken big risks and individuals without the savings to fall back on; and without other parts of the economy able to pick up the slack; Britain was too exposed when the global crisis came.
That is the part of the story of the crisis that needs to be better understood and addressed — and it is the part that is being ignored and in danger of being repeated.
Now the Tories have talked a good game on this over the last few years.
Not every job they’ve created has been a zero-hours contract and some of their measures have stimulated growth.
So where they do get things right, let’s be big enough to say so.
But they have singularly failed to make good their promise of a ‘March of the Makers’.
Productivity has fallen on their watch.
Investment by business has been stagnant.
Lending to businesses has plummeted.
Some of that is down to mistakes by the Coalition, such as cutting capital allowances for plant and machinery in their first Budget and axing the Regional Developments Agencies.
But these individual errors stem from a bigger failure to establish a coherent and consistent plan for Britain’s industry.
That is what we will develop in partnership with business.
A plan that shows how Britain can pay its way not just today but in twenty years time.
A plan that means, when people in Leigh ask me what jobs their sons and daughters will be doing in 30 years time, we can them give real answers.
A plan for public and private investment in R&D, in new technologies and in emerging sectors; to increase the availability of finance, so the dynamism of our start-up culture can flourish into a mid-sized company backbone for the British economy; to support those strategically important industries — that are so vital for building on our manufacturing base outside London.
And a plan that sends an unequivocal message about Britain the best country in the world to start a new business.
Whenever I meet new businesses in Leigh, young people who are just starting up, they often tell me how business rates are a massive barrier to their survival in the early days.
And when I meet people who have built their businesses up into larger concerns, they say that the tax system provides an incentive for a quick sale, rather than growth and developing the business further.
We have got to put these things right, stop short-termism and get our business culture right.
So I will soon be announcing details of an expert panel who will advise Rachel and I on whether we can rebalance our tax system, taking taxes off companies in the early days and off those companies with plans for growth, sending the loudest of signals to young people that starting a business is something that everyone can aspire to do.
That message needs to be hard-wired into schools and the curriculum too as part of a plan to make sure every young person has something to aim for at the end of school.
How many young people leave school today thinking that starting a business is something that they could do?
In fact, too many leave school without much hope at all.
By judging schools on just 5 GCSEs, we risk neglecting the life chances of children who want to pursue a vocational route.
Later in this campaign, I will set out my plans for schools help all children get on and meet the needs of today’s economy.
All young people should have something to aim for at 18: university or an apprenticeship.
And to lift the ambitions of those young people who want to pursue a vocational route, and the status and prestige of their choices, I will set out my plan for a UCAS-style system for apprenticeship and extension of the student finance system to them so they can be supported to move to sought-after apprenticeships just as university students are.
This is what I mean by Labour helping everyone to get on.
But providing high-quality apprenticeships in all parts of the country will only happen if we have a better approach to infrastructure; an approach that supports sustainable growth, drives productivity and helps build economic strength beyond London as well as in London.
For too long successive governments have ducked and delayed the vital decisions we need to take for the long-term.
In the last Parliament, Labour committed to establishing an independent National Infrastructure Commission in order to stop long-term decisions being kicked into the long grass — and this kind of approach surely remains the right one.
A critical but politically difficult decision affecting UK PLC in this Parliament is over aviation capacity.
More airport capacity is vital to Britain’s economic success.
It connects our businesses directly to the growing economies around the world, and it ensures that the UK remains in the top flight of places to do business.
Aviation demand will increase significantly in the decades to come, with major South East airports set to reach full capacity.
If we are to maintain the UK’s status as Europe’s most important aviation hub — then we need action — and most of all, a decision.
When Sir Howard Davies publishes his report next month — after years of painstaking analysis and debate — on where new airport capacity should be, we should act.
Of course, it is essential that we meet our obligations on climate change, minimise local and environmental impacts and show how the benefits of expansion be felt in every corner of the country.
But, as long as those things can be done, we must grasp the nettle and get on with the job.
There can be no more kicking this into the long-grass. This is what gets politicians a bad name with business. A quick and final decision needs to be taken for Britain’s long-term future.
Let’s take that decision and make it work for the whole of the UK, so that Manchester, Liverpool, Leeds, Glasgow and Aberdeen benefit.
I want to finish with another area where clarity, courage and leadership will be essential.
The biggest decision facing our country right now is over our relationship with the European Union.
There are enormous economic and strategic benefits of being in the EU.
But it also says something about the kind of country we want to be — an outward-looking, confident Britain.
And yet we are slowly becoming more divided, more inward-looking, more isolated from our European partners.
There is a real danger that, over the next five years, the business of government will be dominated by the same damaging divisions on the EU that plagued John Major’s government after 1992 — leaving the Conservatives unable to represent the national interest.
Already there are a number of Cabinet ministers openly talking of voting to leave — a nod and a wink to Party Eurosceptics but also a damaging signal that will not have gone unnoticed by our European partners.
The longer questions hang over Britain’s future in the EU, the more business investment that will be delayed and the greater the trouble it spells for our economy.
Labour has offered support for the new EU referendum legislation and that it should pass without any great delay or difficulty.
In return, I call on David Cameron to remove the uncertainty and set a date of Autumn 2016 for the vote.
Taking the debate without delay is clearly in the best interests of British business, as the Governor of the Bank of England has said, and it will give focus and urgency to the renegotiation discussions.
The government should capitalise now on the unprecedented level of support for reform across the EU.
Instead of always blaming the EU — let’s make it work for us. Let’s lead this debate, and not let the personal agendas of some in the Conservative Party get us bogged down in a “them vs us” argument with our European partners.
Otherwise we risk two and a half years of business uncertainty and two years of government infighting over Europe, distracting from the real challenges facing our country.
I will vote to stay in a reformed EU — but I am no advocate of the status quo.
We need to see real reform of the way the immigration rules to address the real concerns we heard on doorsteps at the Election.
Labour under my leadership will continue to support free movement. But freedom to work is not the same as freedom to claim.
So I will hold Mr Cameron to account to deliver a package of reform that meets public concern.
Because, if he fails to deliver, he risks allowing Britain to sleepwalk to the EU exit door. And we know there are many in his Party who won’t hesitate to shove us through.
I won’t let the Conservative Party put their own interests before the country.
I am proudly pro-European and, on this crucial issue for business, I am ready to provide the leadership that you need.
I hope you get the sense from what I have said today that I am a man on a mission, with a clear sense of what I want to achieve.
I want to give the business and the country a Labour Party that people can relate to and believe in.
That talks their language, that celebrates the spirit of enterprise, that helps all people to get on.
A strong Labour voice that will help hold us together, maintain our place in Europe and guide the country through the uncertain times in which we now live.
If what I have said makes sense to you, then please consider getting behind my campaign.
Because politics is changing fast and business has no time to lose.
Thank you very much for listening.