Speeches recovered from the Conservative party’s online archive More…

Portillo: UK Economy Losing Control under Labour

The UK Economy

"This is not the government you voted for. Under Labour the British economy is losing ground. This government is swimming against the international tide of lower regulations and lower taxes.

"People in Britain know that they are paying more in tax. New independent figures from Price Waterhouse Coopers show that the amount of tax people pay is rising so rapidly under Labour that we have nearly caught up with mainland Europe rates. It also shows that the gap between our tax burden and the tax burden in the highly successful American economy has now risen to 8½ per cent of national income. That is a huge weight for British businesses to bear and the prospects are for higher taxes to come. Britain is moving in the wrong direction.

"Under Gordon Brown, economic growth has averaged 2.4 per cent. Over the previous fifteen years it averaged 2.7 per cent. Our current performance also compares poorly with our major competitors - since 1997 US growth has been 4.6 per cent on average and even euroland has averaged 2.8 per cent. Thirteen OECD member states have lower levels of unemployment than we do.

"Our share of world exports has fallen from 5.1% in 1997 to 4.5% in 2000 and our labour productivity last year grew at 1.1 per cent, less than half as quickly as the US. Gordon Brown came into power pledging to raise British productivity. He continues to say that is the fundamental yardstick of our nation's economic success. However, after three and a half years in office rather than raising productivity, new figures reveal that Gordon Brown has virtually halved UK productivity growth.

"It is increasingly clear that this government isn't pro-enterprise or pro-business after all. Despite the rhetoric, the new UK economy is suffering from the old Labour disease - too much government.

"The government has piled on new regulations without a thought for the impact on the competitiveness of business. In 1999 more regulations were introduced than at any time since the War. Labour has raised the bulk of new taxes from business. Its botched announcement of a radical withdrawal of double taxation relief sent a message to the world that the government was not to be trusted and that Britain was not a place to invest.

"This is not the government you voted for. It was elected on the basis that it would not increase burdens on business. For a while it pretended that it hadn't. Now it's given up on that and vilifies those who urge that we should cut taxes as our competitors are doing.

"Global competition is forcing our competitors to reduce the taxes paid by their businesses. Around the world countries are turning to a mixed economy to finance their public services.

"Britain, almost alone, swims against the tide, raising taxes and increasing the reach of the state. Labour's policies are a direct threat to future growth, jobs and prosperity."

Fuel Taxes:

"Gordon Brown, talks about long-termism but tomorrow's pre-budget report will be more of a post-budget response, as the Chancellor attempts to unpick some of the mistakes he has made in the past.

"The Chancellor should be planning a programme of tax reductions to give money back to the overtaxed and make the UK economy more competitive.

"By slapping many of his taxes on to marriages, mortgages, pensioners and motorists, he has hit the very people he said he would help.

"The government may think that the petrol crisis is about special interest groups who can be bought off. But I want a solution that helps all the people, not just some of the people.

"For millions of people the car is a necessity not a luxury. The mother who has to take the children to school because they are not on a bus route. The call-centre shift worker. The retired couple who can no longer walk to the shops. Real people. Real problems.

"For these people, a promise not to raise petrol duty in the next Budget is no answer. A tax freeze would merely lock-in the high levels of fuel tax which caused the petrol crisis in the first place. It would leave the British people out in the cold. Fuel tax levels are too high and should be cut.

Keyboard shortcuts

j previous speech k next speech