Speech to the British Retail Consortium

Speech delivered on Wed 9th Nov 2005

Like a patient whose liver has finally packed in after years of overindulgence, Europe's failure to change its ways has left it in a critical condition.

Its constitution is badly wounded,

Its budget in stalemate,

and its economy in the doldrums.

Liberals diagnose this condition as "not yet terminal".

But the cure will be a bitter pill for Europe to swallow.

Despite knowing this, some in European politics have proved unwilling to go cold turkey.

Like our patient, they want to carry on as before, thinking - one more drink can't possibly hurt, can it?

Let me be blunt.

When inefficient Social Models represent over two thirds of total EU GDP - and over 90% in the Eurozone - more of the same simply won't work.

Business knows what politicians find hard to admit. If the European Union is to prosper in a global world it must combine reform of expensive social models with a new determination to build a single market for goods, services, capital and labour.

It is this single market, underpinned by more investment in research, innovation and education that will deliver the wealth to pay for our social policy.

Liberals know it and the BRC knows it.

For some time, you have been fighting the excessive regulation and protectionism which has stifled the European economy, led to deadlock in International Trade Talks, Bra Wars with China, and a budget clash of Titanic proportions.

And it doesn't help Europe.inc that - thanks to media distortions - the public thinks we spend more time banning straight bananas and smoky bacon crisps than creating a climate that is good for business.

Especially when the EU has notable successes to its credit like simplifying customs paper work for business; and harmonising food and product labelling.

But tonight I am thankful to report, like a headmaster to the parents of an unruly child, that Europe is finally mending its ways.

Presidents Blair and Barroso have put boosting Europe's competitiveness at the top of their list of priorities.

The Commission's proposals, backed by the Informal Summit at Hampton Court, intend to make labour markets less restrictive, promote best-practice in research, development, and innovation; and stimulate the growth of alternative energy sources.

Together they will help build a Europe which harbours innovative, world class universities and can create the world-class products that will sustain retailers such as yourselves into the future.

And not before time.

Look at the moribund state of the Lisbon Agenda, at this half way point to the 2010 target date of creating a dynamic and competitive knowledge-based society.

Look at the 20 million unemployed Europeans who rightly hold their governments responsible for not creating the climate for growth and job creation.

Look at the state of much of Europe's manufacturing base and the enormous growth of the Chinese and Indian economies that make it ever more difficult to compete on price.

Up until now, the Council has blocked the spending required for Europe to raise its game. In fact, it threatened to cut the Research and Development budget while China and the USA are spending ever greater amounts to keep them ahead of the competition.

That's why Liberals and Democrats are campaigning to open up Council decision-making and consign such economic double-think to history.

Economic double think.

It's not just the preserve of the Council but of many politicians, especially on the left, who believe they are standing up for Europe's citizens when they stand up for protectionism...

...even though 70% of European jobs depend on a healthy, commercially competitive and flexible services sector which can only be sustained by completing the internal market.

That's why Liberals stepped in to defend not only Commissioner McCreevy but the Single Market, freedom of establishment and the free movement of persons in the European Parliament just a few weeks ago.

Unlike the left, we know we can't protect Europe's citizens from globalisation by wishful thinking.

Instead, we are putting our trust in a range of measures designed to open up Europe's single market and provide a new impetus for competition and innovation.

Measures which I know that are important to you at the British Retail Consortium like Better Regulation, the Services Directive and Barroso's bonfire of redtape and loopy laws which are necessary for creating an environment that is good for business.

The time has come to focus on consistent implementation of EU regulation in all Member States, while monitoring the need for improvements in the medium term. In all cases, we believe that international competitiveness should be the benchmark for future EU regulation.

However Liberals also know that successful, sustainable development means realising that a healthy economy can't exist without a healthy environment and healthy workers.

That's why we have taken the lead in supporting an ambitious but workable REACH directive to Register, Evaluate and Authorise every CHemical in use to be voted through Parliament in Strasbourg next week.

But we're helping business too by making sure that regulation doesn't drag companies down. Small businesses in particular need help with compliance. Now they're going to get it. And with the one substance, one registration approach over 30000 chemicals will be registered without draining their resources.

I am pleased to note the good work the BRC has been doing to create a more responsible, sustainable business sector in the UK. With the right support, CSR can be mainstreamed throughout the business community, to the benefit of businesses, their employees and the community at large.

Above all, Europe must embrace technological change to maintain its global position.

A Third Industrial Revolution has been predicted by academics like Jeremy Rifkin which has the potential to create millions of new jobs and resurrect the European Economy on the back of sustainable new technologies.

We - politicians and the business community - need to seize this opportunity with both hands.

That means building on the Commission's proposals to help create a dynamic, entrepreneurial, Europe that can compete on a global platform.

Imagine the things we can do with pooled Research & Development money. Things no country could do alone.

Within ten years, for example, Europe could be a Hydrogen economy.

Think about it.

We already have the means to reduce our dependence on oil.

Hybrid cars, such as those developed by Audi and Toyota, have been successfully piloted. Canadian enzyme technology allows food, plant and waste to be converted into fuel.

Even the home of the motor car, California, has forged ahead with proposals to cut emissions from cars by 30% within a decade, through increased use of alternative fuels.

If they can do it, why can't Europe do it?

With oil prices high it makes economic sense.

With climate change occurring it makes environmental sense.

With your assistance and belief it can also make business sense.