The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997

1993Prime Minister (1990-1997)

Mr Major’s Article on Industry and Manufacturing – 12 March 1993

Below is the text of Mr Major’s article on industry and manufacturing, published on Friday 12th March 1993.


British manufacturing is vital for our economic future. And British industry is performing far better than most people realise. Time after time, businessmen tell me of international successes that somehow don’t make the headlines. Who is providing the steel to build the new rail terminal at Charles de Gaulle airport in Paris? A British company in Bolton. Which country is exporting Nissan cars to Japan? Britain is. The statistics tell the same story. Manufacturing productivity is up in Britain; so is manufacturing investment; so are manufactured exports – up 6 per cent, in the last quarter of 1992, compared with a year ago.

Of course, we have a long way to go. There will be setbacks along the way; and – sadly – the last element to turn up in any recovery tends to be employment. But the Institute of Directors’ survey for February showed that business leaders are becoming much more optimistic about their companies’ prospects. This message is reinforced by the latest CBI survey, reporting the biggest rise in car sales for nearly five years, more confidence among retailers and a willingness to increase investment. More houses are being built; and the House Builders’ Federation has just reported a 20 per cent rise in sales. All these figures were released in recent days, but you could be forgiven for missing them in the prevailing gloom.

I want to see every sector of the economy enjoy recovery. We have a strong service sector. The City of London in particular is a huge generator of export earnings for Britain. Before the 1980s, there was a tendency to undervalue such contributions. Even the name we gave to them – “invisible earnings” – suggested there was somehow something unreal about them.

In the 1980s, we came to realise services were a big plus to the British economy. But making things matters, too. To earn Britain’s way in the world, we also need a strong, competitive and productive manufacturing base.

Private enterprise – not government – will create that. Unlike our political opponents, I do not want to go back to a failed past of subsidies and state control. They want to rob successful companies through extra taxes to prop up the weak. I want to get government off business’s back; to set business free to succeed. So let me explain what I believe Government can do to help British industry.

Its first responsibility is to make sure the fundamentals are right. By that I mean – above all else – low inflation. Our inflation rate has been below the average for the European Community for 18 months now. At 1.7 per cent in January, the headline figure is the lowest for a generation. Low inflation helps industry control its costs and compete abroad. We have the lowest interest rates in the European Community. We have a highly competitive exchange rate. And in our factories costs are rising more slowly in Britain than in Japan or Germany – a sure recipe for export success, and for securing a bigger share of our home market, too.

With the labour market reforms set under way by Margaret Thatcher, and pursued again in this Parliament, we won our way to industrial peace just in time to take advantage of the huge opportunity presented by the European Single Market. Manufacturing investment has flooded into Britain. Companies like Nissan, Toyota and Sony have brought new jobs and confidence to British manufacturing.

With the unique version of the Treaty we secured at Maastricht, we have achieved the best of both worlds for inward investors: a Britain inside Europe and outside the Social Chapter. If others want to add costs that make their industry uncompetitive, that’s their business – but perhaps not for long. Once the Maastricht Treaty is ratified, Britain will be the best launch pad for manufacturing success in Europe.

Our European policy is the second element in our strategy to create the right conditions for British business. It leads to the third, which we are pursuing in Brussels, Whitehall – yes, and town hall too: too roll back regulation.

We have made a start, at Maastricht, in putting the brakes on Brussels intervention. But too much regulation is home-grown: dreamt up with too little thought, enforced with too much zeal. We have to look again at factory regulations that define mild washing up liquids as hazardous substances. And we have to look more closely at the way European directives grow another layer of regulation when they pass through the hands of our own bureaucracy. The rule too often seems to be: two bits of red tape are better than one. Let me offer you a better rule: red tape costs jobs. That is why, as part of his Deregulation Initiative, I have asked Michael Heseltine to take an especially close look at the way we implement European rules.

Deregulation doesn’t just help our big, established companies. It clears the obstacles in the way of the new ones that will create the jobs of the future – the jobs that will replace those lost as older firms become more efficient. That means encouraging entrepreneurs, and nurturing innovative ideas.

The fourth strand in our strategy is to build new bridges between British research and its industrial application. That is why I have appointed William Waldegrave to take responsibility for science, research and development at Cabinet level; and he will be publishing a White Paper shortly on the links between research and wealth creation.

The fifth – and perhaps most important – strand lies in our policies for education, maths, science and technology are now locked into the curriculum for every child. We are expanding the numbers going on to further education, by nearly a quarter of a million young people over the next three years.

But we cannot rest content with raw numbers. I have spoken before of the need to create, through vocational qualifications, another ladder of opportunity for young people. John Patten and Gillian Shephard are looking across the board at education and training for 16-19 year olds: to ensure that in quality and relevance we equip young people with the skills for success in the twenty-first century.

This will help to break down some of the ingrained, senseless prejudices that have directed too many able young people away from industry, commerce and manufacturing. We need to build up craft skills and practical training, as well as enterprise and business initiative.

Harold Macmillan once said: “Exporting is fun”. Maybe; but in the competitive world of the 1990s, it is also very hard work. Government can’t export for business; but it can help to open doors. And that is the sixth strand in my strategy to help build up our manufacturing base.

In Europe, we have created a Single market of 340 million people – the biggest in the world. But that is not enough. The world is our market; and we will continue to work hard for the successful completion of the world trade talks, because this will bring down tariffs on British goods, protect British inventions and open new markets for British services too.

In the Autumn Statement, Norman Lamont helped by providing extra export credits. And when I went to India recently, I took a group of top British businessmen with me – a practice I hope to repeat on other visits. Together, on the same trip, we secured some key orders in the Middle East: Challenger Tanks in the afternoon in Oman; and Tornados in the evening in Riyadh.

The Government will do all it can to help industry fight its battles for Britain. But I know where the real credit lies behind every success: with the businessmen, the engineers, workers at every level in the companies concerned. Together, Government and industry can make a reality of my ambition – to see more of what matters made in Britain.