Budget cuts make UK a better international partner

The UK/UAE Task Force is building a network of strengthened relationships between the two countries than can act as the veins and arteries through which trade can flow in both directions so we can grow and prosper together.

Powered by automated translation

This week Britain's coalition government announced its spending plans for the next four years. We are taking urgent steps to reduce the national debt and deal with the fiscal legacy we inherited. We have shown that we have the resolve and determination to live within our means. And we have set out to reinvigorate Britain's diplomatic engagement with the world, elevating our links with the fastest growing economies and championing Britain as a home for business and investment. We understand that economic recovery starts at home, but that we have to look beyond our shores for new opportunities and new partners.

The scale of the economic challenge is formidable. We inherited one of the largest budget deficits in Europe and the G20.

But we have a clear vision for the future of our country. We have chosen to spend on the country's most important priorities - the health care of our people, the education of our young, our nation's security and the infrastructure that supports our economic growth. We are building a fairer and more responsible society, with more opportunity for people to lift themselves out of poverty, and with state support focused on those who need it most.

We are reforming public services - improving transparency and accountability, giving more power and responsibility to citizens and enabling sustainable long-term improvements in services. And we are building a stronger economy, with more jobs, investment and growth for a private sector-led recovery. We have protected as far as possible those areas of public spending which matter for economic growth and pursued reforms to make these more cost-effective.

We know that we cannot have sustainable growth in the economy without healthy public finances. We have created a new independent Office for Budgetary Responsibility, so that the power to determine the growth and fiscal forecasts now resides with an independent body immune to the temptations of the political cycle. And we have pledged to eliminate the UK's structural deficit by the end of this parliament, which has been welcomed by the International Monetary Fund as a necessary path to ensuring fiscal sustainability and a balanced recovery.

Our spending review is part of an ambitious plan to create a business environment that is one of the most competitive anywhere in the world. We understand that the British economy of the future must be one that is built on investment, saving and exports, and are determined to use our tough plans for fiscal consolidation as a springboard for growth and recovery through the private sector.

From 2011, we will gradually reduce corporation tax to 24 per cent, giving Britain the lowest in the G7 and one of the lowest in the G20. We will reduce the small profits rate of corporation tax to 20 per cent. We will lower capital gains tax for entrepreneurs. And we will cut national insurance contributions for employers, extend help to small businesses needing to access credit, and make Britain the easiest place in the world to start a business.

But let us not forget that throughout the recession the UK has remained the sixth largest economy in the world. We have one of the most flexible labour markets in Europe and, according to the Organisation for Economic Co-operation and Development, the least number of barriers to entrepreneurship in the world. Our unrivalled financial services industry, our strong skills base, our global outlook and orientation, our creative talents, our world class universities and our central position between Asian and American time zones all contribute to our open economy and demonstrate that we are open for business.

So we have a strong base on which to build. With that in mind, we are injecting a renewed commercial focus into our relationship here in the United Arab Emirates through the UK/UAE Task Force, which was set up soon after the UK coalition government came to power, as part of a wider effort to invest more time and energy in our relationship with the Gulf countries. Our trade and investment ties are central to this and the figures speak for themselves: the UAE is the UK's 13th largest export market, and by far the largest in the Middle East.

Last year the UK government helped more than 2,000 British businesses set up and invest in Abu Dhabi and Dubai. Through the Task Force, we are building a network of strengthened bilateral relationships between Britain and the United Arab Emirates that can act as the veins and arteries along which trade can flow in both directions so our two countries can grow and prosper together and reach our joint goal of expanding two-way trade to £12 billion (Dh70 billion) by 2015.

So we are confident that we are taking the right steps at home and abroad to help economic recovery in our own countries, and to contribute to a stable and prosperous global economy.

William Hague is the British foreign secretary. This article is exclusive to The National and Al Ittihad newspapers