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TRANSCRIPT OF THE PRIME MINISTER'S BROADCAST ON ECONOMIC POLICY - K  ^5 X- L( R1 j
FRIDAY 30 JUNE 2000 9 y" N7 x9 |2 [& j/ q
In a few week's time, Gordon Brown will announce to Parliament and the country the Government's spending plans for the next three years. - u2 P' D1 E7 N, n" g7 D* q
I can't, of course, reveal the details here.
; f4 w% p) K4 kBut I can say that this Comprehensive Spending Review, as it's known, will deliver sustained extra investment to continue modernising and improving our key public services - that is hospitals, schools, transport links and the police.
/ a7 I9 ?5 w' w6 v/ iBut we can only promise this extra investment - and be confident we can deliver it over the next three years - because of the strong state of the economy and the strength of the public finances.
2 O$ i( t$ D' T9 Y! @But the fact that we are repaying billions of pounds of our national debt now, that inflation is low, on target - the lowest at the present time in the whole of Europe - and that nearly a million more people are in work than when we came into Government. None of this has happened by chance. ' s) R. s5 t& t$ F
It's a result - at least in part - of the difficult decisions, sometimes tough decisions, we took in the early years of this Government. It's the reward in other words for the economy being run competently and for the good of all the country.
) }' a2 T, N& _% aWhen this Government came into office, we inherited an economy where annual borrowing was running at £28 billion a year, the national debt had doubled, we were paying out more just in interest payments on that debt than we spent on the whole of the UK school system. One in five families had no breadwinner and inflation was creeping back into the system.
  U' y( w& M9 a, W# [We had to act and we did act to put things right. We gave the Bank of England independence in monetary policy to help in the fight against inflation and to keep interest rates under control.
7 H! H4 k* k; V3 {0 SWe kept, as we promised, to tough spending limits for our first two years.
* F$ H6 v' Q+ m' v  Z6 v5 |( A3 yThat included keeping the last Government's fuel escalator which I know has pushed up petrol duty automatically above inflation each year.
7 b' j% Z) k2 R) GWe also tackled the waste of unemployment - and particularly the scandal of long term youth unemployment - through the New Deal. % Q9 `; K4 X4 G0 K: i+ H
We brought in the minimum wage, we brought in the new Working Families Tax Credit, the enhanced Family Credit, to help make work pay and tackle waste and fraud in the welfare system. 2 U5 [3 ^9 p7 r- k7 {0 x: ~" ^
And we've also targeted tax cuts to benefit the many and to help again ensure that those in work were rewarded with the basic rate income tax cut and the 10p starting rate of tax.
: [5 r+ j  a9 w3 ~7 ^$ EThe result is inflation is low and on target, interest rates round about half the level they reached under the last Government.
% C% a: o' N3 U' s; P, Y2 A/ N2 `And the public finances are back in good shape. And because of course we're reducing the national debt, then we can save on those interest payments. 7 X# r4 g2 ?6 t5 b& o8 t
The New Deal has helped reduce unemployment, youth unemployment by over 60% and weve extended it to the long-term unemployed and lone parents who want help back into work. Round about 250,000 jobs or more have been created in this way. ( m- u  D" L  h
Living standards are rising, more people are in work and paying tax than ever before. % s2 p- i, T# X+ U6 K& o
In short, there is a new stability in our economy which is enabling business to plan with confidence for the future. " K) D+ ?% @0 H4 W' X" f5 R
It's has also enabled us to scrap, in the last Budget, that automatic above-inflation rise in petrol duty.
$ j! ]" h' X- y, kI know petrol has gone up and it's a good deal more expensive that it was. And I know the difficulties that causes for people in rural areas and people who have to use their cars a lot of the time. It is important, however, to point out two things. First, that most of the recent rise has been because of an increase in crude oil prices the world over. The price of oil has risen from round about 18 dollars a barrel sold a short time ago to around 30 dollars a barrel now.
* \3 M, N4 B6 j# J- ^7 ]- k+ q2 \9 eAnd secondly, while people say it now costs £50 to fill up the average car with petrol in Britain, they don't point out that it also costs over £40 now in Germany and in France where of course there are motorway tolls and much higher income tax.
9 N0 q$ G4 d' k6 A5 l, t7 S' OBut yes, it is the case that the price of petrol also went up because of the action in those early years when we had to cut Government borrowing. Because if we didn't, then we were never going to get the public finances under control. The point that I'm making is this. All these things fit together. It's only because of the hard choices, the choices to give the Bank of England independence in monetary policy, to cut the deficit to put the public finances in order, to solve the problems of long term unemployment so that we get welfare bills down and have more money to spend on the things we want. It's only because of those hard choices that we now can sit down with ease to plan ahead to invest more over the next few years to improve schools, hospitals, crime, transport, the key public services. It couldn't be done without those tough decisions - not on the basis that we're planning to do it which is sustainable increases, year after year after year. % [& m3 S2 v( o* H
The first responsibility of any Government is to run the economy competently.
" ]- j% Y/ M2 U. a$ H1 Y) r6 B7 }. ]4 e# lIt is the first responsibility because it's the foundation on which everything else is built. And I promise it's a responsibility this Government will carry out. And we'll carry it out because otherwise the good things we want to spend money on, the public services we need, the facilities and help that people want, simply can't be provided. There is a new economic policy in this country today. It's a foundation of economic stability and sound public finance, and built on that are strong public services. We intend and will do both.