Friday 12 May - Strategic Direction of Government

You may have heard me and my colleagues talking over the last few days about the need to keep focussed on the long-term - warning of the need not to get blown about by day to day events.

In Government there will always be up and downs and I'm sure there will be plenty more. The downs, in particular, make up the daily headlines in the news.

But what's important is to stay focussed on what really matters, on the fundamentals - on economy and jobs, welfare reform, on health, education, crime and transport.

On long-term change necessary to deliver opportunity and security for the many, not the few.

I'm the first to admit we have got a great deal more to do. But by concentrating on these fundamentals, I believe we've been able to make more progress than anyone would have thought possible two or three years ago.

The overall goal is clear. It's to build a Britain that is strong modern, and fair.

It's an ambitious task. Of course will take time. And it can't be done without change, without hard choices, keeping our eye firmly on the long-term. Because unless something works for the long term, it doesn't really work at all.

Tough decisions like giving the Bank of England independence or keeping a tight control of public spending in our first two years which meant saying no as well as yes to a lot of spending plans made to us.

But the result today is a Britain with a strong economy where inflation is lower for longer than for decades, public borrowing has been cut by £40 billion and as a result of the stability of the economy, nearly 900,000 more people in work than three years ago.

Tough decisions like making work pay ensuring we offer more than just a benefit cheque to those out of work.

So we have brought in the minimum wage, the Working Families Tax Credit and the New Deal which has helped cut youth unemployment already by 70%.

Tough decisions on pensioners as well. And I know that many people are angry at what they say is simply the 75p rise in the basic state pension. And of course we could have taken the opportunity to put all the money into the basic state pension and win some short-term popularity.

But it would have been the wrong decision. Because had we given the pension rise across the board the same for everyone, no matter what they had been given it would have gone exactly the same way to better off and poorer pensioners alike.

But the poorest pensioners would hardly have seen a penny of this because their other benefits would have gone down as their basic state pension rose.

So what we've done and done deliberately, is to target help first on those poorest pensioners in a way which delivers the most help to those who need it most.

So for example the £150 winter allowance and the free TV licences for those aged over 75. They have been introduced in a way which means they're not affected by other benefits that people have.
And for those above the benefit levels, there's an increase in capital limits and the 10p tax rate. And of course for the very poorest pensioners the new minimum income guarantee means that for a million pensioners, those who are the very poorest pensioners they will get income rises and have got income rises of in some cases up to £15 or £20 a week.

The package together adds up to £6.5 billion - that is more than if we uprated the basic pension in line with earnings.

So we made some tough choices but we made them from the right values - fairness, helping those that need it most.

We have made tough choices too on Education.

We need far more investment in education, and we're doing it. An extra investment of an extra £300 per pupil over the three years up to 2001.

But it's investment tied to reform. Reform of course hasn't always been popular.

There was opposition to the literacy and numeracy hour, for example.
There's opposition now to reforming pay so teachers can earn extra money without having to leave the classroom for management roles in schools.

But as a result of these reforms we are seeing standards improve. The eleven year olds' results for literacy and numeracy were the best ever. The new specialist schools are raising their results quicker than any other schools in the country. So we've taken the long-term view, we've made our reforms and we're going to stick to our guns with them.

And it's the same on the health service. We've had to put in place the right strategy for the long-term heath of the National Health Service - backed by the biggest ever sustained increase in funding the Health Service has seen. Not just for one year as used to happen in the past, but now for the next four years we know that the Health Service is going to get the money that we need. And this already means that we are getting more doctors and nurses into our hospitals. More are now being trained. There are thirty eight new hospitals being built in England alone.

Over the next few weeks, we are going to be drawing up the plan to ensure that every penny of the extra investment goes to the Health Service in a way that really brings about a decent improvement in health care.

And this plan, the first of it's kind, is not just about spending money, but allying it with change and reform and will I believe deliver a step change in patient care to match our step change in investment and resources.

So I know, of course, there are frustrations at the speed of progress, at how much hasn't been done for years, over how much remains to be done. But in fact an immense amount has been done already, it's just we have a lot more to do.

But I've not come across many people who say we are wrong in what we are doing, or disagree with the big decisions we've made or believe we are taking the country in the wrong direction.

They agree with us on the destination, they simply want us to get there faster. And so do I. But to get there faster means doing it for the long term. For there's no use doing it fast if it can't be sustained.

So on Monday. Gordon Brown will set out how we meet the goal of abolishing child poverty in 20 years. By the end of this month already one million children will have been lifted out of poverty.

On Tuesday at the Confederation for British Industry, I'll set out how we will meet the goal of delivering stability and prosperity for people in a world of rapid economic and technological change.

On Wednesday at the Police Federation conference, Jack Straw, the Home Secretary will set out how we take forward the next phase of our programme to tackle crime.

So we're going to keep concentrating on what needs to be done to strengthen our economy and our society to deliver opportunity and security for all.

Britain's always worked well for the top ten per cent. Our task is and remains to make the changes necessary to make it work for all our people.