SPEECH BY GORDON BROWN MP - Chancellor of the Exchequer at Labour Friends of Israel’s annual lunch held in London on Tuesday 17th April 2007

SPEECH BY GORDON BROWN MP

Let me start by saying how privileged I feel to be here today, to be here with such distinguished guests and friends who make such a contribution to our whole community and I think it's a measure of the bonds of friendship between Israel and Britain and between the Labour Party and the Jewish community that we have here today with us fellow members of the Cabinet, Valerie Amos, Hazel Blears and Pat Hewitt; we have 20 Ministers, almost 70 Members of Parliament and I should add 40 members from the House of Lords as well.

And I would like to thank our sponsors Isaac Kay and Gilad. Isaac and Gilad you have been steadfast friends of Friends of Israel and I don't think any lunch would be complete without your presence. And thank you Gilad for that very kind introduction and I wish you great success as Chairman of the Lay Board at LFI and I look forward to working with you and your colleagues in the years ahead. Let me also acknowledge that the Ambassador for Israel is here and I want to thank him personally for the excellent job that he is doing to draw our countries together.

I'm immensely proud to have been a member of Friends of Israel almost since the time I became a Member of Parliament almost three decades ago and over that time I've seen both Labour Friends of Israel grow in strength and the ties between Britain and Israel grow stronger and I don't think we should ever under-estimate the value of the work of Labour Friends of Israel, the frequent parliamentary exchanges that Jane has just described, the briefings, the passionate engagement in debate that have maintained with the Labour Party a close connection both with Israel and with the Jewish community here in Britain.

And let me say thank you for inviting me back to speak again. You may remember that the last time I spoke, the back-drop collapsed over me and almost cut me in two halfway through my speech. But as many of you know my interest in Israel and in the Jewish community has been long-standing. My father was the Chairman of the Church of Scotland's Israel Committee and not only as I've described to some of you before did he make visits on almost two occasions a year for 20 years to Israel but because of that, although Kirkcaldy, Fife where I grew up was a long way from Tel Aviv, Israel with no TV pictures to link us together I had a very clear view from household slides and projectors about the history of Israel, about the trials and tribulations of the Jewish people, about the enormous suffering and loss during the Holocaust as well as the extraordinary struggle that he described to me of people to create this magnificent homeland.

One of the first times I was invited to give a major speech on issues related to this, it was the Balfour Lecture some years ago and I was very honoured because it was the first time a Labour politician had ever been invited to give this lecture and I was hugely looking forward to it. I prepared for the Lecture and I looked at my diary and asked the office how long it would take me to get to the Park Royal Hotel. They said it would probably be about 2 hours there and back. I then asked them to check up all the other arrangements. They phoned those organising the Balfour Lecture. They came back and told me that I was speaking not in the Park Royal Hotel in London but the Park Hotel in Tel Aviv.

That was not quite as bad as my first foreign policy interview when I made a major mistake. My first exercise in foreign policy was courtesy of Gerald Kaufman who was then the Shadow Foreign Affairs spokesman for the Labour Party and some of you may know that Gerald liked in the evenings to go to films or to the theatre or to the opera and he would call you along and ask if you would deputise for him if he had an interview to do and on this occasion it was a radio station down-under, 12 hours ahead and they wanted to hear about the new Labour Party and I was told by Gerald to wait for this phone call to arrive, I'd be put through to the radio station and then I'd do my interview.

And so right enough the phone rang about 10 o'clock in the evening; the radio technician said: I'm just passing you through to this programme; the presenter then came on and said: Very nice to talk to you Mr Brown – your making great changes in the Labour Party in Britain. Why is it that we seem to be so stuck here? And I said: Look, this is simply not true. I've just met Bob Hawke, your Prime Minister. We've talked about the reforms that we have in common. The Australian Labour Party is making huge social changes and I really applaud them. And the interviewer said: Mr Brown, this is Radio Auckland. Our Prime Minister is David Lange. You are talking to the people of New Zealand – and I was never invited back.

Now fitting for a Chancellor perhaps let me start with economics and give you one statistic that I think just demonstrates just how vibrant the Israeli economy is. Last year foreign investment flowing into Israel increased by more than 100% and when I was addressing an investment conference in Tel Aviv only a few months ago, I saw just how much Israeli investment into the United Kingdom and United Kingdom investment into Israel was rising and I realised that the strength of Israeli investment in the UK, rising by more than 20% in that year, made it possible for me to record the rather more modest growth rate of 2½ % for the British economy.

Now today Israel is growing at 5½%. It's averaged 4% for forty years and while I'm told there is no easy translation in modern Hebrew of the term 'prudence', Israel is to be congratulated for achieving great economic stability in conditions of huge uncertainty and of achieving something more, the depth and breadth of investment and trade between our two countries which is proving that the inter-dependence of nations and economies is moving apace and ahead in an increasingly globalised world.

Annual bilateral trade has exceeded 2 billion for the past five years, tourism has grown by 50% in the last three years. Israel is now fourth in the rankings of overseas listings on the London Stock Exchange and of course, as I said before, Israel and Britain have a great deal in common because we are both well placed to respond to the great economic challenges of the global era. We have both made economic stability the foundation of our approach. We have been building the confidence for long-term investment from financial services to hi-technology. We are creating an environment where capital can flow freely across the borders.

The exchange of letters between the Chancellor and the Governor today on economic policy show that inflationary pressures have been a feature of all advanced industrial economies in recent times. The pressures have originated in energy and utility prices around the world. Pressures have also come from higher seasonal food prices. The open letter system is achieving exactly what it is designed to do, to transparently identify the sources of inflation in our economy and to assure that necessary action is being taken. Letters that are published today show that the Bank of England expect inflation to fall significantly in coming months and that we have played our part with a fiscally neutral budget and with this year's public pay settlements at 1.9% below our inflation target.

Now we've also recognised that in addition to both our economies pursuing policies of stability our competitive advantage, both of us, will come in future by excelling in those goods and services that add most value, that are in science and the creative industries and depend on skills and both our countries recognise there can be no retreat to protectionism.

The best way to secure opportunities in the global era is co-operation, working together, to realise increased prosperity and while in the 1980s it became popular in some quarters to think of us as individuals acting in isolation from another that was never true and appears unthinkable today. Today the world is highly inter-connected and inter-dependent and as environment and security issues emphasise we can no longer be confident of long-term prosperity unless we help others to raise the prosperity in all parts of the world and enable them to embrace the opportunities on offer in the global market place.

So this new era of globalisation is also a new era that demands a new internationalism in the way governments and peoples respond. Take Africa: It is perhaps the continent most at risk of long-term exclusion from the changes underway in the global economy. I was meeting only a few weeks ago the leaders of Ghana, the country that is celebrating 50 years of independence from British rule.

There's a great story told that when Richard Nixon went on behalf of the American Government to Ghana in 1957 at the time of the independence celebrations he didn't quite know what to do – he was rather gauche – he didn't quite know what to say to the crowd that was waiting him there and he went around the crowd and he said to one: How does it feel to be free? And then he met another person and said: How does it feel to be free? And then he said to another person: How does it feel to be free? – and the man said: How should I know? I come from Alabama.

But while America has secured civil rights in these fifty years, Africa is still waiting for economic and social rights to be secured but – and this is my point – we also know that Africa is increasingly the venue for more and more al-Qaida cells. It is therefore important to recognise that there is a strategic issue at stake here that we must not only tackle at root the terrorism that now afflicts not only the continents that we know about but Africa as well as a result of the activities of al-Qaida but we must demonstrate to the peoples of every country that those who are tempted to pursue war or terror, that we see globalisation not as a cause for injustice but as a force for social justice on a global scale and that change will bring with it opportunity and the means for that continent and all places where there is poverty to realise the potential.

Now in recent years more than 25 countries have been attacked by al-Qaida related groups including of course here in London on 7th July. It is only through the dedicated work of police, security and Intelligence services that we have been able to prevent further attacks and al-Qaida's message is absolutely crude; that the West is waging a war on Islam, that globalisation is a means to exploit the resources of the poor and that the State of Israel should be under attack.

We therefore need to demonstrate that we will take this head-on and our response to terrorism has to work in two ways. We need to strengthen our defences and our means to hunt down [and] intercept terrorists before they strike and we've already taken a number of steps that will make Britain more secure and our comprehensive spending review that has is examining a broad range of further measures that we would have to introduce in the coming years and a vital part of our effort to prevent terrorism is to prevent terrorists using the international financial system and we will not hesitate to act so that there is no hiding place either for terrorist finance.

But we know also that in addition to military, security, policing and Intelligence measures we must do more. We must articulate our values, be confident about what we stand for and challenge the arguments of those who would support terrorist extremists. And I believe that our response should not be too dissimilar from that of the cultural cold war against communism in the '40s, '50s and '60s, at the cultural level using the power of argument and persuasion to win hearts and minds and backing what we do in security, military and Intelligence work.

It is not a simple challenge but it's one that we must all take on in our own communities, in Parliament, internationally. We must do far more to isolate the extremists who practise terrorist violence from the moderates of all religions in all regions. We must make it clear we are not waging a war on any religion nor are we engaged in a clash of civilisations but we are instead taking a stand against extremists who demonstrated their willingness to attack civilised society.

We must also demonstrate that no group will be left excluded or in poverty or injustice and that prosperity and opportunity can be extended to all and we must seek over these next few years to build an alliance of voices based on the common humanity of moderates of all faiths. So the values of liberty and justice are an important part of what unites us, the means by which we build a coalition of moderate forces - people who want to embrace the challenges and opportunities of the new world, not to use them to create a false divide.

Now these are values, the values of liberty and justice that Britain and Israel hold in common. They are an important part of the bond of values between our countries. And for Palestinians too we want to marginalise the extremists by widening the number of those who see that an end to conflict and peaceful co-existence with Israel offers a credible hope for them and their families to seek a secure greater prosperity, opportunity and dignity.

This country's experience with Northern Ireland has taught me there is power in economic progress as a lever to peace and stability. For this to happen the benefits of peace must be visible and understood so that people see for themselves that conflict carries a high price not only in the loss of security for them and for others but also in the loss of a meaningful level of prosperity. So that's why it is important that the political 'road map' in the Middle East must be underpinned by the economic equivalent. Hope of better times to come is an essential part of the politics of winning hearts and minds. It may be the best hope of winning a moderate coalition for peace.

And we must not under-estimate the scale of the challenge that we face - around 70% of Palestinian households in poverty, unemployment at 25%, the private sector weak and suffering but progress in my view can be made. Jim Wolfensen, the Quartet representative for a number of years was able to make important headway and I myself worked with him on a number of projects. The election of the Hamas-led government last year and its refusal to accept the principles set, not only by the Quartet but by President Abbas himself, put that progress on hold. Unless we see that acceptance by Hamas or a national unity government of Israel's right to exist and that the way to a two-state solution is through negotiations based on existing agreements and not through acts of terrorism or violence, political progress and therefore the path to peace and prosperity will remain blocked.

However, no matter how big the challenge we must continue in our efforts to support ordinary Palestinians, limit the damage to the Palestinian economy because the conditions are unacceptable and because restoring the conditions for hope are part and parcel of rebuilding the foundations for a long-term and lasting peace.

Now Hilary Benn is playing an important part in setting up a temporary international mechanism. More European aid has reached the Palestinians. The humanitarian insistence [sic] has ensured that there are essential services but in the longer term Ed Balls, the Economic Secretary who's here with us today and John Cunliffe for the Treasury, we have been looking together at all aspects of the Palestinian economy, identifying where the constraints to sustainable economic development lie, what the main challenge in future could be for the Israelis as well as Palestinians and for the international community, and already we are building on work undertaken by those who share our goal of a viable Palestinian economy living in peace and security with the recognised State of Israel.

And I would like to thank Ronnie Cohen who's also with us today and his Portman Trust for their excellent work and their direct participation in trying to get a number of major initiatives off the ground and I look forward to reading the Portman Trust forthcoming publication entitled 'Beyond Conflict – Lessons From Northern Ireland'. And I would also like to thank Labour Friends of Israel because your publication 'Aiding Peace' published last year was also very influential in helping us to reach a view and I look forward with great interest to the second policy document coming soon.

Economic development, political progress can go hand in hand. Belief in a vision of a better economic future must be harnessed to a clearer vision of final status and the political process that makes that vision a reality and I'm pleased that here with us today is Lord Levy who has also just returned from visits on this to the Middle East.

So no matter how difficult, Tony Blair and I are agreed we must work together to bring about progress on the political track. Here the formation last month of a national unity government is of course a welcome step in the right direction, not least because it holds out the prospect of an end to violence that has broken out sporadically between Hamas and Fatah but coming as it does after hard and patient diplomacy on the part of the government of Saudi Arabia and determination on the part of President Abbas, we will now need to judge that new government by both its platform and its actions and its conformity with the Quartet principles. Adherence to the Quartet principles remains key. We cannot achieve a two-state solution while Hamas insists one state has no right to exist. We can never support those who reserve the right to achieve their aims through terror. There are however reasons for hope and it is wrong to believe that progress is not possible.

I've just returned from Washington at the weekend and I have not only talked about these matters with my G-7 colleagues but I've met members of the United States Administration who are holding out the prospect of a closer agreement on the political horizon and we welcome the regular meetings that are now taking place between Prime Minister Olmert and President Abbas.

More than ever, as we all know here, there is an international agreement on the need for a two-state solution with Israel secure, with its borders recognised, alongside an independent and viable Palestinian State. What remains at issue is when the time is right to make the choice for peace, a choice which both sides must have the confidence to make but which if taken, I believe holds out the very real prospects of Israelis and Palestinians, despite all the difficulties we've seen, working side by side to build a future of prosperity in the region. And I, Tony and so many others in our Government are committed to working with all people of peace to achieve this.

Now for me, a commitment to upholding basic values in the international community is absolute. There are common values that stem from our common humanity and are present in all of us across all cultures and faith. Whether the issue is terrorism, challenges to our security or the gross challenges to our values that anti-semitism represents, it is only by standing resolute, all of us together, that we can deny champions of hatred, the hope that they might ever prevail.

As a young student at Edinburgh University my attachment to social justice drew me towards not just the emerging anti-apartheid movement but to working with people to tackle anti-semitism and today in Britain, while we should never be complacent and we should be at the height of constant vigilance, we have a society with at least the values that has allowed us to develop a society of many cultures, faiths and races and we must strengthen our society to increase racial equality and community cohesion, we must ensure that a person's ethnicity or race is not a barrier to their success and we must support all those who contribute to society and who take a stand against racism and extremism.

At the end of last year the Parliamentary Committee against Anti-Semitism headed by John Mann established an All-Party Commission of Inquiry chaired by Dennis McShane to look into the level of anti-semitism in the UK. It is a major and important report. Comprehensive, constructive, it pulls no punches. Its conclusions outlined a problem much worse than many had imagined, a problem that was not just about the usual cast that we know about of fascist and people who support Nazi tactics but it provided clear and unambiguous evidence of the problems of hate and extremism in parts of our society that our response to anti-semitism was still too weak and in some areas of society there was a dangerous disregard.

And it was a powerful warning that has spurred the Government into rethinking the force with which this challenge should be met. The rise in anti-semitic incidents reported by the Community Security Trust that I've had the pleasure of addressing said that the numbers had risen to 594 in 2006 – the highest figure since monitoring began – and this is simply unacceptable and it reflects unfortunately an upward trend.

So let us all be clear where we stand on this: Anti-semitism has no place in Britain and I will confront it no matter which quarter it comes from, no matter who raises it. Anti-semitism will not be tolerated and that expressions of frustration or anger with the policies of the Government of Israel, whatever their merits, should not be used as an excuse for more general expressions of racial hatred.

I've just had the privilege of writing a series of essays to raise money for charity and I've been able in these essays as portraits of people who made a distinguished contribution to the last century to celebrate men and women like Raoul Wallenberg and Dietrich Bonhoffer who were prepared to risk their lives and in the end lost their lives fighting anti-semitism.

And this Government's official and formal response to this Report states clearly our collective opinion that the Far Right and the Far Left Islamic extremists alike employ anti-semitic motives that are consistent with ancient forms of hatred towards Jews. We all have a responsibility to take a stand alongside the Jewish community to ensure that these attacks cease. I was very pleased that two weeks ago the Communities Minister, Phil Woollas announced a powerful response from the Government and Phil is working very hard and is personally committed as I am to ensure that our response that is robust is delivered.

It was Martin Luther King who said: “Laws do not change the heart but they do restrain the heartless” - and it's these principles that guide our response, on the one hand to be tough and determined in restraining the heartless and on the other looking at our society and looking to change ‘hearts and minds’ that may fall under the influence of those overwhelmed by hate and who seek to poison minds and spread divisions.

In the universities we cannot accept the situation that is described in the Report and Alan Johnson and I agree that we must not allow this situation to remain unchallenged. The Home Office is working now with the Community Security Trust to look at areas to strengthen where we can, the security of the Jewish community as well as the collection of proper data. The Crown Prosecution Service is looking at problems that arise in bringing prosecutions and what can be done to overcome this. The Labour Party will work with the Electoral Commission and other parties if we can find better ways to ensure all election candidates exercise due care when addressing issues such as race relations and the attitudes to minorities during political campaigning.

The Government will work with the EU and other international agencies to help tackle problems in different countries. The Government and Ruth Kelly is very firm on this, will continue to re-enforce to the Muslim Council of Britain that not only is it out of step with other leading Muslim organisations on remaining committed to a boycott but [its] continuation will erode its claims to leadership. We will put additional resources into building community cohesion and we've allocated nearly 20 million to our faith communities capacity building fund which support faith organisations and inter-faith organisations to strengthen their capacity to play a fuller part in civic society.

Last month the Government supported two events in bringing the Jewish and Muslim communities together which built on the outputs of a conference held last year which explored commonalities of faith and community. We are supporting twinning schemes between schools as part of our work on community cohesion and sustainable schools.

You will know that the Historical Association has issued a Report that showed that teachers were unfortunately dropping Holocaust lessons fearing it may offend Muslim pupils but any suggestion that the Holocaust will be dropped from the curriculum is both wrong and nonsense. This will not happen and I want to ensure that the Holocaust remains a subject that must be taught on the curriculum now and in the future. Future generations will need to continue to remember this defining episode in 20th Century history - man's inhumanity to man. It is crucially important therefore that young people learn about our history so that they can heed the warnings from the past.

I was very proud last year to be able to announce £1½ million of support to the Holocaust Education Trust for its lessons of outreach educational programme. The funding will enable the Trust to facilitate visits with two students going from every secondary school and further education college in the United Kingdom and in my own constituency when children went from the school that I was at when I was young, they came back and they organised a commemoration festival so that people were aware of both what had happened and what the dangers were.

Now the teaching of the Holocaust has been impaired according to the Historical Association by concerns over cultural interpretations, Holocaust denial and anti-semitism. The Report did not identify this as a widespread problem but it would be tragic and neglectful if the project was derailed by exactly the problems it was established to deal with.

So today I want to announce to you a new fund to be administered also by the Holocaust Education Trust to work with a variety of agencies and teachers to ensure that teachers are adequately equipped with the training and resources and this fund of half a million pounds per annum for the next three years will be made up of a Government contribution of a quarter of a million [pounds] and match funded by the Pears Foundation and I pay tribute to them and thank them for their support for this initiative which continues the work in new areas of the Holocaust Education Trust. So our response to the problem of anti-semitism is strong and it is . I believe it is supported by all Parties and by Parliament as a whole.

Let me say I have long admired the strength of community and the organisations in the Jewish community that exist within it to care for its members, from education in schools to social welfare and philanthropy, from culture and art to self-help and security and these web of institutions, this network of care and support illustrate the opportunities available through the partnership of government and civic society to build the strongest possible community in our country. Strengthening our communities and the health of our society by mutual association and endeavour – these are the values we are familiar with, we were brought up to admire and we aspire to in this Government.

Now the pace of change in society is becoming more rapid and far-reaching than ever but the values and the institutions fashioned around the values that serve the Jewish community and other communities as well are still there to apply and it is no accident that across our country you will see success where these values are prominent and where communities can find ways to work together to express them.

Our challenge is in what we will do tomorrow and the day after and the day after that to realise these great enduring values in practice. The contribution of the Jewish community to our country has been immense and it will be as it has been for the next 350 years and as ever our challenge is to look forward, to confront the uncertainties, the problems and opportunities that lie ahead with commitment and faith in our shared values, with belief and with strength in the communities that we represent, with conviction that in our lifetime and in our generation we will be able to bring more peace, more stability and development to the Middle East, more success in our efforts to eliminate hate and build cohesion in our country, to build a better country and a better world for the generations to come, all of us want the opportunity to serve in that task. I thank all of you for what you do.