Mr Major’s Speech at the Freight Transport Association Dinner – 26 April 1993
Below is the text of Mr Major’s speech at the Freight Transport Association Dinner, given in London on Monday 26th April 1993.
PRIME MINISTER:
Mr President, Director General, My Lords, Ladies and Gentlemen. I listened with very great interest to what the Director General had to say and I was struck at the outset by the difficult choice he had to make between a Ratners clock and the opportunity to speak at this dinner. I think I speak on behalf of everyone in saying that we are very glad he decided to come and speak to us.
But I did feel a little uneasy when he mentioned the clock because it just so happens, to mark his retirement, I was going to bring with me a small token of our esteem – a clock. Fortunately I do not remember where it came from and I do not remember where I put it, but I now know it does not matter because the Director General does not like clocks anyway.
Mr President, when I received an invitation, I was invited to come by Norman Fowler, Gary Purdy said he did not know what Norman Fowler said to me to persuade me to come. Well I must let you know he said nothing, he just gripped me warmly by the throat and refused to let go. But I now offer the Director General a word of warning, because he is sitting next to Norman. During the general election campaign which we had about, it seems, forty years ago, I spent a great deal of time with Norman Fowler and everywhere we went something curious happened, people turned up to throw eggs, at Norman. Now he is obviously used to this because he kept ducking and they missed him and they hit me. Well all I can say to you, Director General, you are in a very dangerous seat sitting where you are.
Mr President, this is one of a series of speeches I am making about British industry but I am doing so because I believe British industry matters, that manufacturing matters, I spelt out why in Manchester last week. And services matter as well, they matter because they too create wealth and jobs and they matter because they are vital to manufacturing. The two are inextricably twinned.
And transport of course is a very good example and freight transport is an integral part of the whole industrial process. And if I may say so, echoing to an extent what the Director General said, freight transport is something which we in this country, or perhaps more accurately I should say you, are world leaders at.
And I will tell you why I believe we are so good, because freight transport in Britain is overwhelmingly private sector, is overwhelmingly deregulated and provided in an open competitive environment. Your Director General touched in his speech on the transport history of our country. I wonder, Mr President, if you realise that in the reign of Charles II the cost of transporting goods from London to Birmingham was 7.00 pounds a tonne and from London to Exeter 12.00 pounds a tonne. Now I am told it costs 7.50 pounds from London to Birmingham and 10.00 pounds a tonne from London to Exeter – not a great deal of difference until you remember that in the intervening three centuries inflation has risen by 4,800 percent. Mr President, I knew yours was a competitive industry and so did you, but I bet you did not know how competitive an industry it was. So I offer you, if I may, an advertising slogan – “No price increases for 300 years” – then I expect you to keep it for the next 300 years at the end of which, if you do, Norman Fowler will come here and you can all throw eggs at him.
Of course there are other differences too. There were highwaymen in 1660, now there are VAT men, motorway maintenance men, speed limiters and tachographs. Mr President, we need an efficient and successful freight transport industry. My message tonight is that the government wishes to see your industry successful and, where we can, to help it be so. I do not mean by interfering and telling you how to do your job, I would not frankly, I could not do that. But the first way the government can help is by getting the economy right and then keeping the economy right. I know that times have not been easy for your industry, or indeed other industries in the last year or so. Those of you who move goods to and from other European countries such as Germany, France, Spain, will be well aware of the downturn now affecting them. Those who regarded the recession as a British phenomenon may now begin to re-think their prejudices about that particular point.
But we are now seeing the pendulum in Britain swinging back, in welcome fashion, swinging back towards growth. Manufacturing output is up, exports are up, retail sales are up in March to the highest level ever recorded, car production and car sales are up, house sales are up and there is I believe the beginning of a new mood of confidence throughout British industry. But in just the last two days we have had two very important indications of recovery. Unemployment has fallen for the second month in succession, it is still too high but it is a very welcome sign. And today we have good news on the widest measure of prosperity of all – Britain’s output jumped upwards in the first three months of this year, the biggest increase for three years.
Mr President, we said that low inflation would create the climate for recovery. We have driven inflation down and recovery is following, as we said it would. Both the International Monetary Fund and the European Commission now forecast that Britain will have the fastest growth of any major European Community country in the next two years.
But perhaps even more important than that is the longer term perspective. We have the right conditions to sustain recovery. Inflation is low, under 2 percent, the lowest for around a quarter of a century. We mean to keep it down. Interest rates are down to 6 percent, the lowest for 15 years and, crucially important for competition, the lowest in the European Community. We have a competitive exchange rate. Manufacturing productivity is now improving at its fastest for six years and we have seen a record fall in wage costs. Mr President, we have not seen that combination of circumstances for 40 years and we must take the opportunities that exist there and not throw them away in the future.
With Britain emerging from its difficulties and with the single market opening Europe to British firms, British industry has unparalleled opportunities before it today. Mr President, British industry must grasp those opportunities, that is why we have given priority both to manufacturing industry and to the services which support it. And that is why also, in a difficult time for public spending, as it must be if we are determined to keep inflation low, we have given such a high priority to the infrastructure programme. That is the second way I believe government can help.
Good transport links are fundamental to a sound economy and over the next 3 years we will be spending a record 6.3 billion pounds on national roads, from the M25 to the A1 in North Yorkshire. Investment in British Rail has been running at the highest level since the early 1960s.
But even more important, and you touched on this and I wish to say something about it, we are bringing private capital into areas that used to be public sector responsibilities. Let me make it absolutely clear, that is not a matter of ideology, it is not just a clever way of cutting public spending, it is our conviction, based on experience, that the private sector runs industries more efficiently and more profitably than the government can do even with the most efficient bureaucrats to help them.
Just remember a few years ago! Twelve years ago, the taxpayer underwrote the cost of a new fleet of lorries for the National Freight Corporation, a new fleet of buses for the National Bus Company and a new fleet of aircraft for British Airways. The taxpayer also underwrote the cost of new port facilities at Southampton and Tilbury and new aircraft facilities at Heathrow and because the taxpayer underwrote the costs the Government had to approve every decision and those of you here who remember those days will no doubt remember something else as well – that uncomfortable feeling of bureaucracy breathing down your neck week after week, day after day and hour after hour.
Today, how very old-fashioned all that seems. Both companies are now owned by the private sector; they are funded by the private sector; they provide efficient services for their customers; they now make profits for their shareholders not losses for the taxpayer and now we are bringing finance into the funding of roads and railways. Very innovative some say. Is it, I wonder?
Don’t forget that many of Britain’s roads and most of its railways were built in the first place by private industries and financed by private investors. What we are doing is mobilising private finance again. Private finance has built the Channel Tunnel; private finance has built the Queen Elizabeth II bridge between Dartford and [inaudible]; private finance is building the second Severn Crossing; private finance is going to be largely responsible for building the Heathrow Express Line; private finance will have a huge role to play in building the Channel Tunnel rail link and cross-rail; and there will be more. Wherever possible, we will ensure that private firms provide all the finance and all the expertise and get the full financial returns and where risks and costs have to be shared, and in some cases they will have to be shared between the private sector and the Government – we will encourage joint ventures between the public and the private sectors. Mr. President, we are building on the developments of the 1980s and we are intended to keep innovation going in the 1990s.
I noted Gary’s remarks tonight on inter-urban road charging and I have no doubt John MacGregor will spot them as well. John will be publishing a Green Paper on that shortly. I know you will want to study the options carefully and we will look forward to receiving your response and we will study that and take notice of that no less carefully but I want to turn for a moment to another matter you touched upon and that is the privatisation of British Rail.
A great deal of nonsense has been talked about the privatisation of British Rail. I put the point bluntly for I feel it strongly. The privatisation is not ideology but plain common sense and national self-interest. It is common sense that the private sector will run the railways more efficiently and it is in our national self-interest that they should do so. The UK as a whole needs the best possible efficient, reliable railway service. Bringing in private-sector skills and liberalising access to the network are in my judgement the best ways to achieve that and an expanding economy will bring a growing market for freight transport in which there is undoubtedly a place for rail freight. I listened extremely carefully to what your Director-General had to say on that.
Let me make it crystal clear we do want rail freight to be used to the full as a result of the improvements and competitiveness that privatisation of the railways will bring but we certainly do not intend to penalise road freight as the counterpoint of that policy.
Mr. President, better infrastructure, road and rail, means a more productive, more efficient and therefore a more profitable freight industry as a whole and I am sure you will benefit to the full from the changes and the opportunities which private financing will bring.
Mr. President, just a little over a year ago, I have to confess I did some of your members out of a valuable business opportunity. I didn’t call the removal men to 10 Downing Street! I am not this evening prepared to apologise for that but I do intend to make up for the lapse by fighting to win new opportunities for your members abroad, beginning with Europe.
To those of you who don’t and haven’t yet lifted your eyes to the prospects of business that exists within the European Community, I say to you do so speedily for those prospects are real, they are growing and they are glittering prospects for the future for such an efficient industry as we have in this country. The opening of the Channel Tunnel and the opening of Europe’s Single Market are two significant events with huge implications for the freight industry.
The Single Market has already opened up most Community transport markets to transport operators and we have now agreed programmes for opening-up air and coastal services with each member state. Road transport within each member state is next on the agenda; it has been partly liberalised and we shall continue to press for agreement on complete freedom of access as soon as possible.
Mr. President, what do those new freedoms mean? They mean greater choice for transport users and greater opportunities for transport operators. They mean more competition within the Community and beyond and. I have not a shred of doubt that British freight operators will rise to that challenge and grasp that business but to enable them to do so, there is something we have to do. By “we”, I mean the Government. We have got to make sure those new freedoms really happen. We have won the right to offer new services, ferry services or road haulage for example. Governments must not be allowed to put obstacles in their way.
Let me say this to you tonight, Mr. President: your Government will insist on your right to offer your services right the way through the European Community and the European Commission has important responsibilities to enforce these rights and I believe that they will meet them and we will certainly encourage them to do so.
Mr. President, during Britain’s Presidency of the Community [section of speech not recorded] right conditions for you to get out there and succeed. The economy is set fair for steady growth with low inflation. Some £3 billion of capital expenditure on roads and rail alone in the current year with new opportunities for private sector investment; new freedoms in Europe for British companies to turn their competitive edge into new markets in road, rail, air and sea transport; and a radical review of deregulation to get Government off industry’s back.
In conclusion, Mr. President, I would like to pick out just one point from. your Director-General’s speech tonight. He urged this industry to be proud of its achievements. I would say simply this:
So you should be! Competitiveness, safety, environmental standards, industrial performance have all improved dramatically in recent years. You do have an exemplary record. Be confident! Be proud of that record and don’t in any sense be afraid to take the remarkable opportunities that lie ahead of you in the 1990s. I have no doubt about your capacity to take those opportunities and turn them into profits for your companies in the future. Let me conclude by saying simply this: Mr. President, as you do so, you will have the Government’s full support. [Applause].