A political vision on the road to Blackpool

Politicians launch and relaunch their political visions so often that it can be hard to tell the difference between a statement that seriously defines an effective national mission and a bland slogan. Often the politicians themselves do not appear to know which they are offering, because there is a constant temptation to take a slogan and dress it up as a philosophy.

But in the case of John Major's new vision for Britain as the "enterprise centre of Europe", it is the reverse deception which holds. It looks as though he has presented us with a statement of the bleeding obvious in asserting what it is he wants for the country (after all, you are unlikely to hear Tony Blair arguing that we should be on the enterprise periphery of Europe). But, in fact, Mr Major has actually outlined a political creed that could be effective, unifying and distinctive.

So: what does it mean to relaunch Britain as the enterprise centre of Europe?

Of course, it means making Britain the European home for international business. That will clearly define our relationships with the United States and the Far East. As Mr Major was speaking on Friday, the Korean company Samsung was entertaining the Queen in Middlesbrough, where she was launching a new factory.

This is exactly the kind of thing the Prime Minister has in mind. At the same time, of course, it defines our relationship with the rest of Europe: as a matter of logic, we have to be in Europe in order to be in the centre of it; as a matter of practicality, we must be in it if we want the Samsungs to continue to park themselves here.

Enterprise Britain also means making Britain the centre of business and commercial services in Europe. For example, probably more symbolic of our national comparative advantage than the new Samsung plant on Teesside was the announcement, on Friday, that the company is relocating its European headquarters from Frankfurt to London - where accountants, lawyers, advertisers, telecommunications providers, software writers and financiers are to be found in relative abundance.

Given the natural advantage of language, London must rank as the most attractive city in Europe for firms to place their management function. Serving those headquarters is work we like doing and work we do well.

Another element of the grand design of making Britain an enterprise centre means taking the country a little way down the road towards the more aggressive capitalism of Hong Kong and the United States. That means smaller government, lower taxes and probably less welfare. It also means doing our best to promote free trade - in Europe and now, according to Malcolm Rifkind, across the Atlantic.

Finally, making Britain an enterprise centre means making Britain entrepreneurial and promoting the wealth creators - by abolishing taxes such as capital gains and inheritance tax that stifle enterprise, abolishing red tape, and removing the hand of bureaucratic control (in the form of both local education and health authorities) from our public services.

Much of it sounds rather attractive. Certainly, as a guiding objective it is far more appealing to liberal-minded folk than any of the competing visions for the soul of the Conservative Party. It also passes the three key tests of political mission statements. It is distinct - it is not something that everybody could wholeheartedly support, so it distinguishes the party from the others. It is unifying - in that it has one central idea which acts as a vehicle for policies in a whole raft of areas. And it is meaty - there are practical proposals that follow from it.

Moreover, as a political relaunch it also succeeds in giving a fresh face to Conservative policies without actually reversing them. From the abolition of exchange controls, to the (embarrassing) repackaging of the Department of Trade and Industry as the Department of Enterprise, the Tories have always aimed to make Britain a business-friendly nation. No one can accuse them of contriving a new conviction for themselves.

So, you have heard the speech, you think you like the slogan ... now, what about the manifesto? Just how does Mr Major or, indeed, anyone else actually make Britain the enterprise centre of Europe? This, I fear, may not be so easy.

The reason why not all countries have already transformed themselves into what Mr Major wants to turn us into is that, in practice, many of the policy elements of the programme are deeply unattractive in the execution, or limited in their effects.

Take first the idea that we should be the nation of inward investment. This is a very Michael Heseltine view of the enterprise mission. But much of the high-profile new investment that has arrived of late has been induced to settle here by the largesse of the tax-payer. The subsidy offered to firms such as Ford and Siemens is probably the only form of welfare hand-out to foreigners the Conservative Party still supports. In any event, it hardly resonates with the bulk of what the Tories regard as free-market values.

There is another problem with inward investment. There simply is not enough of it to build a prosperous and successful life for everybody, and there never will be. In 1993-94, for example, 404 foreign companies decided to invest in operations here. Government figures suggest they created 96,000 jobs. But in any one year, something like 9 per cent of UK jobs turn over - are created and destroyed. So, while 96,000 sounds a lot, it is only a small proportion of the two and half million generated each year - for every pounds 1 they invest in us, we invest about pounds 15 ourselves.

In any case, the contribution by foreigners to Britain's capital stock is not great enough to offset the relative lack of investment that has characterised our economy since the war. Enterprise, our European partners know, like charity, starts at home.

Even if we did strive to be the developed world's biggest net importer of capital, it is still not clear how you actually go about achieving that. The Government is fond of saying that Japanese and Korean investors are keen to invest in the UK because we have opted out of Brussels regulation and do not have a minimum wage. But, in fact, the kind of investment we attract is hardly the kind that relies on paying wages of less than pounds 4 an hour. Indeed, foreign companies in the UK pay far higher wages, on average, than UK employers.

One of the great contributions of foreign settlement here - like Nissan in Sunderland - has been to demonstrate to British employers - such as Rover - that treating staff as commodities is a poor way of motivating them. Paying poverty wages and putting workers in unsafe conditions are not in the style of large, profitable international companies. They are far more prevalent in small, unprofitable local companies.

If Mr Major's caricature of Heseltine economics can offer only limited advances for our nation, then what about the other element of the grand design - that we should be the business services capital of Europe? One should not overstate the gains to be made in this direction. And one should not underestimate the political challenges in pursuing it.

The ideas that must be championed to keep Britain in the centre of things would not naturally fall on to the agenda of a Conservative Party conference. They include continuing improvements to public transport, shifting the burden of tax from business to individuals, the freer movement of people across borders and, above all, a clear commitment to stay right in the heart of Europe. Michael Howard would not be so concerned with endlessly drafting new criminal justice bills; he would use his authority in the Home Office to shorten the disgraceful and time-wasting queues at Heathrow immigration control - queues which make it less attractive to land here than it ought to be.

As a country, we should not be considering imposing fines on employers who hire foreigners, nor should we be in the business of fining international broadcasters (as we did MTV recently) for breaching domestic television regulations. We should be making ourselves hospitable - acting as a salesman rather than a regulator.

There is no strong lobby in the Conservative Party for these kinds of policies - and for several of them there is a strong lobby against. Indeed, it is possible that Labour would find it easier to champion the liberal internationalism that underlies them than the Conservatives.

How about that goal of making Britain a little more like Hong Kong? It is this that John Redwood has in mind when he talks about Enterprise Britain. The problem with this route is that there is simply no appetite among the British public, or among the Conservative Party, for such a route to be followed to its logical end. Removing income support and the health service are simply not on the agenda. If anything, Hong Kong is more likely to move in our direction, now it has achieved a high level of per capita GDP, rather than the reverse.

Certainly, there is a consensus in the Conservative Party that we can move in the direction of deregulation and individualisation - but not to a degree that will fundamentally alter the structure of the economy.

So, while Enterprise Britain might be a great concept and while it might pass the important tests of a successful mission statement, Mr Major will still have his work cut out designing the programme of government that would follow from it. He may well be distracted by the temptations of populism - fundamentally inconsistent with Enterprise Britain - on the way. In practice, what he will achieve for the economy, at best, is a modest set of measures that enhance Britain's natural position as a global, outward-looking nation and slightly enhance the GDP.

Politically, however, the prize could be greater. In a year in which the banter of "fat cat" debate has led the Government into a surprising and extreme form of defensiveness, the public could again be made to see the sense of Conservative pro-business policies. Certainly, the Tories can now argue, the policies may make for some podgy felines - but all in a good cause.

If they can, then it may be Labour which finds itself as the party in the greatest need of a positive economic creed.

Evan Davis is a BBC economics correspondent.