FULL SPEECH BY THE RT HON DAVID CAMERON MP TO THE CBI ANNUAL CONFERENCE 2007

We're meeting at a time of considerable economic anxiety and uncertainty.

But before I answer your questions, I want to give you an element of political certainty…

…what you can expect from a Conservative government, and what you can expect from me as Prime Minister. And I want to be absolutely frank with you today.

You can expect a big change, because that's what our country and our economy need. Government has got too big and too bossy and a big change is required. Our national infrastructure is inadequate and a big change is required.

Our education system, the climate for enterprise, tax, regulation, public spending - in all these areas we're going in the wrong direction and a big change is required…

…and I want to show you today what those changes will be and what they mean for business.

BUSINESS TODAY

Business faces huge pressures today, and government's role should be to make it easier, not harder, to do business. Easier, not harder, to set up and grow a new company, to hire new labour, to borrow and invest.

That means big changes in three areas. First, to strengthen economic stability. Second, to improve our national infrastructure. And third, to create a real climate of enterprise. Let me take each of these in turn.

ECONOMIC STABILITY

George Osborne and I are determined to create a more secure framework for the economy. Right now we are seeing the consequences of the Northern Rock disaster.

Of course there have been problems with credit around the world. As the Government is always anxious to remind us, this crisis began in America. But only in Britain have we seen people queuing to withdraw their savings.

I believe we must urgently examine the way banks are regulated in Britain, as the tripartite arrangements set up by Gordon Brown are clearly not working properly. We must also develop a sustainable system of deposit insurance.

And we need to make sure that our long-term pension plans are affordable.

More widely, our proposal for a new triple lock on stability - enhancing the MPC's independence, independent monitoring of the fiscal rules, and independent national statistics - will help to reduce the threat of turbulence.

INFRASTRUCTURE

But strengthening economic stability is just the start. We urgently need to improve our national infrastructure. Here I think it's time for some straight talking.

For years, you've heard ministers make promises from this platform - talking about a skills revolution, about a transport revolution, about a green revolution. And not much happens. Why?

Because they never deal with the underlying problems. Of course Britain needs - and British business needs - a skilled workforce. But it won't happen unless we raise standards of literacy and numeracy in our schools.

So we need big changes: to make sure every child can read by six, and to open up the supply of education to new providers who will raise standards.

Of course we need a transport system that makes it possible to move goods and people easily round the country. But it won't happen unless we accept that big infrastructure projects cost big money - and that the people who will benefit from them should help pay for them.

So we need big changes: upgrading our road network, using tolls where appropriate And now that St Pancras is open, let's look again at the huge transforming power of high-speed rail. Of course we need to secure our energy supply while meeting environmental obligations.But again, a complete lack of long-term planning has put our energy security at risk.

In ten years, no action to increase decentralised energy. Nothing to open up the grid. No action to change planning law so it's easier to open new power stations. We will remove those restrictions and enable nuclear power to make its case on a level playing field.

But a level playing field means exactly that: no taxpayer subsidies for nuclear power; no compromise on our commitment to fiscal responsibility and economic stability. And a level playing-field also means a big change on green energy, giving it a transformational boost.

Labour's shameful and short-sighted ten-year neglect of green energy - a neglect which Gordon Brown has done nothing to remedy - has left this country lagging woefully behind our competitors.

So we will shortly be publishing our plans for a green energy revolution in Britain, a vital component of creating the right national infrastructure for business success.

CLIMATE OF ENTERPRISE

Ensuring economic stability; creating the right infrastructure: these are the foundations of prosperity.

But to make the most of the opportunities of the twenty-first century, we've got to create a real climate of enterprise in our country. How does it help to put burdens on our wealth-creators while France, Germany, Australia and Spain are all busy liberalising, cutting tax and cutting regulation?

Regulation imposed by this government has cost our businesses more than £55 billion.Our economy is labouring under the longest tax code in the world, more than double the length that Labour inherited in 1997. And in his last budget as Chancellor, Gordon Brown increased small business corporation tax from 19p to 22p in the pound.

We're leading the fight against the small business tax rise, and with the help of PricewaterhouseCoopers we're developing a detailed plan to simplify the tax system and sweep away complex reliefs and allowances.

That's the way we can reduce the headline rate of corporation tax.

CAPITAL GAINS TAX

And we should be making it easier for people to start and grow businesses and to profit from it - not more difficult. That's why I'm calling on Alistair Darling to resolve the uncertainty he's created when he speaks to you later today.

He must tell us what the Capital Gains Tax system will look like in five months time.

The best thing he could do is stand up, admit he's made a mistake and abandon his ill-conceived plans.

If he attempts further changes in order to try and recover the situation they must not be sticking plaster changes to proposals that have so angered entrepreneurs and the business community. If he proposes real changes, they should be judged against two vital yardsticks.

First, do they deliver real simplification of the tax system?

Second - and most important - will they make the UK a better place to be an entrepreneur and to invest in the new businesses that create the jobs and wealth that we need for the future?

If the Chancellor fails to abandon or radically alter his approach we will fight his tax hike on Britain's entrepreneurs every step of the way, both inside and outside Parliament

SHARING THE PROCEEDS OF GROWTH

Of course, it's easy for politicians to talk about cutting this or that individual tax. Gordon Brown has cut corporation tax by five pence in the pound - but we've got the highest tax burden in our peacetime history.

Yes, some taxes can go up to help others go down. We're committed to that principle so we can use tax to help families and cut pollution. But what really matters is reducing the share of the national income taken by the state - to ensure that over time the economy grows faster than the government.

As Prime Minister I want the organisations that you all run, to grow more quickly than the organisation I'm running. Only then can we get the costs I impose on you down.

BIG GOVERNMENT AND THE BUREAUCRATIC AGE

That means big changes in our very system of government. We're living with a 20th century model of government for a 21st century economy.

We've got decentralised, footloose, global companies.

We've got an informed, activist, grown-up population.

We've got amazing technology, enabling co-operation on a truly liberal basis - bottom-up and self-regulated. But we've got a government that tries to use that technology not to empower and liberate, but to control.

Big, cumbersome, centralised bureaucracies, trying to control a world that has moved on.

I believe that the days of big government are numbered.

The bureaucratic age is coming to an end. People just won't stand for it anymore. And the sooner ministers realise it the better. Look at how things are now.

The result of modern bureaucracy is chronic, unforgivable waste - waste which feeds directly into higher tax bills for families and businesses.

The Department for Work and Pensions misplaced two and half billion pounds last year - most of it not through fraud, but through error.

£500 million was spent on the National Literacy Strategy - with no impact on reading levels. Nearly £900 million was spent on fighting truancy - with no impact on truancy.

The NHS has been through a series of massive upheavals in the last ten years - apparently the cost of all that was £3 billion and the result is a system no better at doing its job.

In fact thanks to the way the Government has poured money into the NHS without reforming it, £19 billion has gone on increased costs - no new equipment or medicine or staff: just higher bills for the same things.

Big government and the bureaucratic age are institutionally wasteful.

But it's worse than that: what really gets me is the deliberate extravagance committed by the people at the top of the government machine. The administrators and managers and quangocrats who administer public money on our behalf.

Apparently managers of the exams watchdog, the Qualifications and Curriculum Authority spent more than £1.6 million of taxpayers money in just six months - on hotels and conference centres for themselves.

Officials at the Home Office spend £800,000 a year on taxis - charged straight to you and me.

The MoD has committed £2.3 billion to a new headquarters for itself - while our troops in Iraq and Afghanistan are going without the kit they need, and their families are living in substandard housing.

All these stories tell me one thing. Big centralised bureaucracies are incompetent and they can't be trusted.

What we have learnt over the last few days is that when it comes to regulation and legislation there's one law for government - and another one for everyone else.

These people, they set up these quangos, they pass these laws, they introduce these regulations, they insist on this bit of scrutiny, that bit of compliance - and whether it's their own government debts or their own party machine they just don't obey it.

There is a time in the life of every government when they've been in power for so long that complacency tips over into arrogance, and arrogance even becomes indifference to the law. They've passed that point and change, real change, is needed now in Britain

They're casual about spending our money. Don't tell me we can't do better. Well let me make it clear: a big change is on the way.

We will be a Government for the post-bureaucratic age - careful with public money, competent in public administration, conscious of the limitations of government.

CORPORATE RESPONSIBILITY

But there's one last thing I want to say about costs and the relationship between business and government.

As Prime Minister, I will need something from you as well.

If we share a vision of a world in which business has the freedom to succeed in a low-tax, low-regulation economy, sustained over the long-term, we politicians need your help. We need your help in reducing the demand for government spending, and the demand for regulation. That means your help in cutting the costs of social and environmental failure. We can't do it on our own.

We need your help in tackling the big issues confronting our society: from crime to climate change; from poverty to pollution; from obesity to biodiversity; from family breakdown to forest depletion.

That's why I'm so delighted to see your excellent report on climate change yesterday. We are all in this together, and if we work together, understand our responsibilities and embrace the opportunities of the modern world, there is no limit to what we can achieve.

I have a clear vision of Britain: where people have more opportunity and power over their lives.

A Britain where families are stronger and society is more responsible. And a Britain which is safer and greener.I'm also clear about the role of the state in achieving those objectives.

In place of the bureaucratic over-reach which sees the state trying to control everything in sight, while not running anything right, we see a state that is properly focused on delivering its responsibilities, while trusting individuals, families, businesses and communities to get on with their lives.

In place of the bureaucratic age which sees wisdom, power and moral authority invested in the state and its growing army of agencies and quangos we see a new post-bureaucratic age where the information revolution and our new world of freedom makes it possible to put real power in people's hands.

That is my vision for the future, a future fit for the twenty-first century, a future of change, optimism and hope.

ENDS

27 November, 2007