It's great to be back in Moscow.
I first came to Russia as a student on my gap year between school and university in 1985.I took the Trans-Siberian Railway from Nakhodka to Moscow and went on to the Black Sea coast. There two Russians - speaking perfect English - turned up on a beach mostly used by foreigners.They took me out to lunch and dinner and asked me about life in England and what I thought about politics.
When I got back I told my tutor at University and he asked me whether it was an interview. If it was, it seems I didn't get the job! My fortunes have improved a bit since then. So have those of Russia. Moscow today is vibrant. Gone are the utopian slogans, and the empty streets and shops.Today Moscow is a bustling, colourful city that never sleeps. Russians have much more freedom to travel.And the internet offers the ability to communicate with the world in a way that would have been unimaginable back then.
Perhaps above all, there's a new energy here. And with it a real sense of pride in Russia's identity.The relationship between Britain and Russia has improved too, certainly since the tense period of the Cold War.
But there remains the strong sense that we are still competitors. We both want the same things - namely prosperity and security... but we often behave as if we think we have to compete with each other to achieve them. As if Britain's prosperity comes at the expense of Russia's and vice versa. As if Britain being more secure, means Russia being less. As if every issue must involve one of us winning and the other losing...and the only question that matters is who wins and by how much.
My message today is different. Yes, of course, I accept that Britain and Russia have had a difficult relationship for some time. And we should be candid about the areas where we still disagree. But I want to make the case for a new approach based on co-operation. Right now we both face enormous challenges...from providing for our ageing populations and securing sustainable economic growth...to protecting our countries against a global terrorist threat.
The countries that will be successful in the 21st century will not be those that hunker down, pull up the drawbridge and fail to overcome their differences with others. The successful countries will be those that work together and look to people like you...young, ambitious, with national pride but global vision...to help shape their future.
So we face a choice. We can settle for the status quo, where in too many areas we are still in danger of working against each other and therefore both losing out. Or we can take another path that is open to us: to co-operate, work together and therefore both win. Today I want to make the case that we are stronger together.
Let's start with the economy. Some people talk about trade as a competition in which one country's success is another country's failure.That if our exports grow then someone else's will shrink. But the whole point about trade is that we're baking a bigger cake and everyone can benefit from it. And this is particularly true of Russia and Britain. Russia is resource rich and services light. Britain is the opposite. In fact Britain is already one of the largest foreign direct investors in Russia.
And Russian companies already account for about a quarter of all foreign initial public offerings on the London Stock Exchange. So we are uniquely placed to help each other grow. But much of that growth won't just happen of its own accord. I believe we have to help to make it happen, by working together in three ways. First, by creating the best possible business environment for trade and investment.Second, by developing our partnership in key growth sectors like science and innovation - where Britain and Russia have particular complementary strengths. And third, by working together on the global stage to help create the stability and security on which our future prosperity depends. Let me briefly say a word about each.
Both our governments need to remember that businesses don't have to invest in either of our countries...they choose to. And we need to help them make that choice. That means ensuring the effective and predictable rule of law, not least so that companies can be confident that payments will be made promptly and contracts enforced.It means getting to grips with our national finances so that budget deficits don't undermine confidence and macroeconomic stability. It means creating a workforce with the skills and creativity to compete in the twenty-first century. And it means getting our tax rates low and competitive...and minimising the burden of regulation so that business and entrepreneurship can flourish.
This has been a real priority for me since I took office. Britain has taken some really tough decisions to get to grips with a record budget deficit.And we are working hard to create the best possible environment for business. We are creating the most competitive corporate tax regime in the G20.We are cutting the time it takes to set up a business. And we have issued a "one-in-one-out" rule for regulation. So any Minister who wants to bring in a new regulation, will have to get rid of an existing one first.
Today Britain offers Russia the strongest business environment in Europe and the lowest barriers to entrepreneurship in the world. We want to work with you to help strengthen Russia's business environment too...so more British businesses can invest here ...creating more jobs and better value products for Russian consumers...and more prosperity for us all.
UK goods exports to Russia are already worth £3.5 billion...up 50% lasut year alone...and growing by almost another two-thirds in the first half of this year. We want to do everything we can now to bild on this and take our trade and investment to a new level. That's why we will support Russia's accession to the World Trade Organisation...and it's why I've brought with me such a strong British business delegation, with companies like BP, which is responsible for Russia's biggest foreign investment.
Today we are signing new deals worth £215 million...including Kingfisher opening 9 new stores over the next 3 years...and an important collaboration between Rolls Royce and Rosatom on civil nuclear co-operation. At the same time we will also work to give small and medium sized companies the chance to trade. Remember they are going to provide the lion's share of growth in our countries.And what I said about choosing to invest and choosing to stay...and the need for the effective and predictable rule of law to ensure payments...applies particularly to them.
But opening up trade and investment is not enough on its own. As governments, we need to support the innovation and entrepreneurship that can drive growth. Vital to this, as Prime Minister Putin has said, are "breakthrough ideas in science and technology." In this UK-Russia Year of Space, we are already seeing the foundations of great co-operation in medicine and satellite technology which is improving global disaster monitoring and earthquake predictions.
Go into a Russian secondary school this month and for the first time there are plastic display computers...robust enough to be dropped on the ground...funded by Rosnano and developed by Plastic Logic, a spin off from Cambridge University.
Today also sees the launch of Pro Bono Bio...the result of a two year Anglo-Russian project to create a new international pharmaceutical company with a unique humanitarian mission...offering free drug donations to Africa based on the sales of its products in Western Europe.
I believe we can do even more together in this vital sector. And many of you can play a role in helping us to do so. In the UK we are creating a Tech Hub, a Silicon Valley of our own, in East London.
Here, President Medvedev has founded the Skolkovo Innovation City. World leading British universities including Cambridge, Oxford, Imperial, and Glyndwr in Wales will be working with Skolkovo on lasers, optics and nuclear and energy efficiency.
Of course, it's not just science and technology...there are a whole range of sectors where we have complementary strengths which can boost our mutual prosperity. From supporting the modernisation of Russian Railways...to working together in the run-up to the London Olympics and the Sochi Winter Olympics, where British companies are already working on the main stadium...co-operation rather than just competition is the way to stronger growth and prosperity for us all.
But we don't just share bi-lateral interests. At the G20 we share an interest in strong and sustainable global growth. We must address the economic and financial imbalances that brought the global economy to its knees only three years ago. Russia and Britain can work together at the G20 to promote the global economic stability on which we all depend. So how Britain and Russia work together really matters for the prosperity of all our people.
The same is true of our security. On geopolitics many of our interests are much closer than we think. From Islamic extremism to proliferation..counter-narcotics to climate change...Britain and Russia share many of the same concerns.
Moscow and London have both been victims of horrific terrorist attacks. We need to unite against the threat of terrorism and the warped ideology that underpins it. We need to work together with our international partners to prevent countries like Iran from acquiring nuclear weapons. And as new technologies develop to allow us to defend ourselves better against the threat of ballistic missiles from rogue states...we need to co-operate to ensure they make us all safer...not compete against each other in another arms race.
We have shared interests in stability in the Middle East and North Africa too. I know we have not always agreed about how to achieve that stability.
Let me put my cards on the table. The view I have come to is that the stability of corrupt and violently repressive dictatorships in Middle Eastern states like Qadhafi's in Libya is false stability. The transition to democracy may well have its difficulties and dangers...but it is the best long term path to peaceful progress...and is a powerful alternative to the poisonous narrative of Islamist extremism.
And I believe that Britain and Russia - and the whole international community - have a role to play in helping to support peace, stability and security across the Arab world.
Of course there are sceptics in both our countries who will doubt whether we can ever get beyond the competitive ideological instincts of our past.There are two groups in particular which I want to take on today. There are the Britain-Sceptics...those who think that we will always clash because Britain can't be trusted...and that we will use the disagreements of the past as a pretext to put Russia down.
And then there are the Russia-Sceptics...those who say that Russia shouldn't modernise, innovate and open up to the outside world...because modernisation will undermine stability and prosperity.
To the Britain sceptics I say this.Yes, there remain difficult issues that hamper mutual trust and co-operation.There are extradition cases Russia wants to pursue. And we still disagree with you over the Litvinenko case.
On that, let me say this. Our approach is simple and principled. When a crime is committed that is a matter for the courts. It is their job to examine the evidence impartially and to determine innocence or guilt. The accused has a right to a fair trial. The victim and their family have a right to justice. It is the job of governments to help courts to do their work and that will continue to be our approach. So we can't pretend these differences don't exist.
We need to keep working for an honest and open dialogue to address them candidly. But at the same time we have a responsibility to recognise the many ways in which we do need each other...to end the old culture of tit-for-tat and find ways for us to work together to advance our mutual interests.
To the Russia sceptics who believe that modernisation will undermine stability and prosperity...I say take another look. Modernisation is the only way to guarantee stability and prosperity. President Medvedev and Prime Minister Putin have been clear about this too.Prime Minister Putin's strategic goals for 2020 make clear the importance of "effective market and government institutions."
And President Medvedev has emphasised his focus on tackling corruption as being fundamental to Russia's progress. Back in June he said that Russia's focus needs to include "...real progress in fighting corruption; establishment of a modern police force and other law enforcement agencies; [and] efforts to make the judicial system more effective."
Let me say from my own experience I have no illusions about how hard these issues can be. In Britain we have our own serious challenges too.The rule of law is vital. Vital for foreign investment...for entrepreneurship and innovation...for people to be encouraged to start their own businesses. They need to have faith that the State, the judiciary and the police will protect their hard work and not put the obstacles of bureaucracy, regulation and corruption in their way.
I've talked to many British businesses. I have no doubt about their ambition to work in Russia...but it's also clear that the concerns that continue to make them hold back are real. They need to know that they can go to a court confident that a contract will be enforced objectively...and that their assets and premises won't be unlawfully taken away from them.
In the long run the rule of law is what delivers stability and security. I believe the best guarantor of prosperity and stability is for economic and political openness to go in step together. When people get economically richer they make legitimate demands for political freedoms to match their economic freedoms. And as they start to benefit from a free media, guaranteed human rights, the rule of law, and a greater stake in how their society is run..so they will have the confidence and energy to invest in a new cycle of innovation and growth. And that's something I believe is true in every part of the world.
So I believe we can prove the sceptics wrong and rebuild the relationship between Britain and Russia...working together to develop a modern and ambitious partnership which will help both our countries achieve a more prosperous and secure future.
Of course none of this will just happen. A new partnership requires bold decisions. A commitment from both our countries. I am here today to make that commitment on behalf of Britain. I hope that Russia will match it. In the last twenty years Russia and Britain have both come a long way but each largely on their own. In the next twenty years I believe we can go very much further as we prove that we are stronger together.