PM speech on DTI five-year plan

17 November 2004

Technology and innovation are at the heart of the Department for Trade and Industry's (DTI) five-year plan outlined by the Prime Minister today.

The plan focuses on how the UK will develop a strong, modern knowledge based economy, which can meet the challenges posed by rapidly emerging economies and new technologies. It also outlines the need to transform the DTI to meet this new challenge.

Mr Blair said:

"My message today - and the message of the new DTI "5-year programme" - is that sustained success is within our grasp."

Read the Prime Minister's speech in full below:

[check against delivery]

Britain is working.

New figures published today show that we have the lowest unemployment in 30 years and the highest ever number of people at work.

For the first time in half a century, Britain has been growing faster, for longer, than any of the G7 industrial nations. And as a result we have become wealthier than the French, Germans and Japanese.

These figures are a tribute to business in Britain: Managers, investors and employees. By taking tough decisions, Government has been able to deliver macro-economic stability. On that foundation, business is building success.

My message today - and the message of the new DTI "5-year programme" - is that sustained success is within our grasp.

Yes, there are big challenges. The emergence of China and India as economic superpowers. A world awash with cheap labour. The need for better skills and more innovation. But, there are even bigger opportunities.

We have a resilient and adaptable economy. Our science is strong and benefiting from sustained increases in public investment. Knowledge transfer and spin outs from our universities have increased. We lead Europe in our share of value-added coming from knowledge-based and high-tech businesses. We are closing or have closed the productivity gap with some of our competitors.

The challenge is to build on these strengths.

Businesses need to be even smarter and more innovative. But they know far better than me what needs to be done.

Government for its part needs a "new" industrial policy. Not a policy of "picking winners" nor laissez-faire.

But a new industrial policy.

And that new policy is set out in the "DTI 5-year programme"

First, science and technology. UK science is world class.

We have a record we can be proud of; with 1 per cent of the world's population we carry out 5 per cent of the world's science, produce 9 per cent of all papers and have 12 per cent of all citations.

We are doubling the science budget and we have set ourselves the target, over the next 10 years, of increasing the overall level of research and development in the UK from 1.9 per cent of GDP to 2.5 per cent.

And we can see the results from that extra investment. At Harwell we are investing £325 million to build the largest scientific facility to be built in the UK for 30 years - the Diamond Synchrotron, which will be used for research into illnesses such as Parkinson's, Alzheimer's, osteoporosis and many cancers.

We are investing another £75 million per year on cancer research. And we have invested £200 million in E-Science as well as investing an additional £100 million to strengthen academic careers, including more science PhDs. These are just some examples of the strength of our science base.

Our ambition is for the UK to become the science capital of the world, to become a world leader in exploiting knowledge, to become the most open and supportive environment in the World. A place where scientists everywhere in world want to come and work. We are well on the way. But I believe we can do better. Stem cell research is just one example of a new area of science which has tremendous potential to improve quality of life and where the UK can lead the world.

A hundred years ago life expectancy was 45 years. Today it is 76 for men and 81 for women. But living longer also means that diseases that were much rarer then are much more common today. Until recently there has been little prospect of finding a cure for them. Stem Cell research changes that and has the potential to revolutionise medical advance.

I know it is an area which is controversial but properly regulated stem cell research could transform the life chances of people suffering from Parkinson's, Alzheimer's, strokes and spinal cord injuries for example. We will not stop this research. The potential benefits are huge. I do not think it is right to deny people suffering from these illnesses the hope of a cure. But we are not allowing it simply to proceed unregulated.

As a result of many years of public and parliamentary debate the UK has one of the most comprehensive schemes of stem cell regulation in the world. We have the UK Stem Cell Bank - a world first where the first two human embryonic stem cell lines were deposited earlier this year. We should have the confidence to recognise that science can be a force for good and to grasp the opportunities that it presents to us.

The Government is sending a strong signal today - which we will reinforce around the world in the coming months - that the UK is the place to carry out scientific research like this. The UK can be the world leader in stem cell research, biotechnology etc. The DTI Plan will help ensure that the UK continues to create a climate where this sort of research can flourish.

If we are to achieve this vision we must redouble our efforts to tackle Animal Rights Extremism. Britain has the most tightly controlled regime governing animal experiments in the world. To do any experiments involving animals scientists have to go through a rigorous process to gain a licence. And licences are only granted if there is no alternative.

Because we have such a tight regulatory regime and because the benefits from such research has alleviated suffering for millions of people - from HIV to Asthma animal experiments have been vital in developing new drugs and medicines - we will not tolerate the sort of violent and intimidatory activity we are seeing from Animal Rights Extremist.

That is why we produced a detailed strategy for dealing with extremists in July. We are implementing this strategy with the police and others.

And we are prepared to go further. That is why we are consulting industry on how to create a new offence to address the economic damage extremist can cause companies and their suppliers.

But investing in science and fostering excellence is only part of the task. For far too long UK scientists and engineers have come up with ideas which in the end have had to be developed abroad. We aim to change this and make "Discovered in Britain" into "Made in Britain" too. That means matching excellence in invention with success in taking ideas to the market place. And that requires strong networks linking our universities and businesses. The DTI's £400 million Technology Strategy will strengthen these networks and help business turn new ideas into commercial reality.

Second, we must equip people with the skills they need to prosper in a modern dynamic economy. We are already making good progress, especially in areas like adult basic skills and Modern Apprentices - which have increased from 75,000 people in 1997 to over 255,000 now.

But we must do more especially at the intermediate level where I know employers have real concerns. That is why we will publish, in the New Year, a Skills White Paper to take this forward.

Third, we need a regulatory regime that is as "light touch" as possible and which fosters innovation and enterprise. I know regulation is one of businesses biggest concerns. I share that concern. That is why we are committed to moving towards less, but more effective regulation. I know that business are often sceptical about government promises in this area.

The 5 Year Plan makes a concrete promise in this area: to reduce the regulatory burdens on business arising from DTI regulations by more than £1 billion. I want business to work with us to achieve this. Judge us by our results.

Fourth, a successful Britain depends on a successful EU. The EU is the world's largest single market and our biggest trading partner. A prosperous and thriving EU is vital for British businesses. It is why we are leading the drive for economic reform in Europe - something that we will take forward in our EU presidency next year.

This new industrial policy needs a new DTI - a Department that is transformed not a Department that is abolished as some are wrongly advocating.

In the 1970s DTI spent £16 billion and employed 26,00 people. It ran a raft of nationalised industries, supported lame duck firms, and tried to control prices. Frankly, under both Labour and the Conservatives the aim was to preserve and protect industries, rather than to foster innovation, competition and change.

Today the DTI is changing. By 2008 at its core will be fewer than 4,000 people. The budget has been slimmed and focussed on science and innovation. It has strengthened our competition regime and taken the politicians out of it. It's streamlined its business support products from an incomprehensible array of more than a 100 to 10. It is enhancing its capacity to act as the voice of business in Whitehall.

There is more to be done. And today's "5-year programme" sets out some of the next steps in the DTI's transformation, so in future it as much the "Department for Technology and Innovation" as it is the "Department for Trade and Industry".