Below is the text of Mr Major’s comments on the economy, made in Washington on 25th February 1993.
[The Prime Minister was asked about the state of the economy and unemployment]
I think you have to accept the fact that it isn’t just a problem in the United Kingdom. I know that is not any comfort to the people who are unemployed in the United Kingdom but neither is it any help to suggest that it is uniquely a United Kingdom problem.
In Japan, in Germany, in the United States and in all sorts of other countries there have been large job losses in recent months and for the same reason – because the recession we face in the United Kingdom is a recession that is biting painfully everywhere. The point is what can we do and what has happened?
What we need to do to get people back into secure employment is to take the decision to get the economic fundamentals right. Some months ago, we had an inflation rate that was much higher – it is now down to 1.7%; we had interest rates at 14% – they are now down to 6%; we saw no signs of increasing re-investment – we are now beginning to see those signs of re-investment and we have also made some further progress towards the determination of the world trade talks which will lift world trade and create jobs everywhere.
They are practical measures, sound bite politics criticising the Government may be part of the party political plan but it is practical measures like these that will provide secure jobs for the future and that is what concerns me.
[The Prime Minister was asked whether the Government had made mistakes]
If it satisfies you, no government that has ever been in office has failed to make mistakes. What we are concerned about is getting people back to work. It is the future. We are going to be living in this decade in the most competitive decade that we have ever seen. That means we have to have a competitive economy, it means in terms like inflation we need to be at least as good and hopefully better than our principal opponents.
One of the points I think many people have failed to recognise about the changes in British industry is that we now have the most effective productivity rates anywhere in Europe. That is vitally important because it means we are competitive. Our exports are growing. People often saw years ago us having a declining share of world trade. It is now stabilised and potentially growing for the first time in generations. That is important because of what it means for our prospects in the 1990s. Unless we out-compete other countries we will have no secure prospects so we need the circumstances to make sure we can do that and that is what we putting in place.
[The Prime Minister was asked about whether enough was being done about job creation and school rebuilding]
But you overlook what we did in the Autumn Statement. We did create a job-creation programme in many of the measures that the Chancellor actually took in the Autumn Statement.
The point that I am making is a different point, that to believe that you can actually solve the problem with short-term palliatives is wrong. We have put in range firstly the job-creation measures that the Chancellor announced in the Autumn Statement and secondly, to deal and assist with people who are unemployed at the moment, a wide range of training and other programmes. It is important to keep people who are out of work in touch with the world at work and to provide them with training opportunities so that they can use their skills. That is what we are doing.
It is a three-pronged approach, get the economic fundamentals of interest rates, inflation and supply-side policies right, then have the right training programme so that people can benefit from those during the period that they are unemployed. Those are the sort of measures that are necessary.