Below is the text of Mr Major’s speech to South Wales Businessmen Lunch made on 28th October 1994.
I am delighted to be back in South Wales, an area full of innovation and enterprise. Wales has a great manufacturing tradition, of which we are all justly proud. I know British Steel, for example, don’t need telling that the steel industry is now highly efficient and is the largest manufacturing employer in the Welsh economy.
The strength of Welsh manufacturing is unquestionable. Manufacturing output in Wales is growing at a rate twice as fast as the UK as a whole. I know that for this successful performance to continue the economic recovery experienced by the whole of the UK must continue. That is why the Government is committed to securing sustained economic growth with low inflation.
The UK economy has been performing very well of late. Exports are up by 10 per cent over the past year, and are at record levels. Investment is up by over 5 per cent, and unemployment has been falling for almost two years now. Remarkably, output is growing by more than the rate of inflation. That doesn’t happen too often. In fact it has only done so on three occasions over the past 30 years.
But the continued success of the British economy will only come about if we get two things right. First, the Government has to keep inflation down and retain control of its own finances. I know that some of you were surprised when the Chancellor raised interest rates just over a month ago. I fully supported that decision. Getting inflation down, and keeping it down, has been one of my top priorities since becoming Prime Minister. Stability is the best help the Government can provide to businesses.
Second, the Government must adopt policies that work for business. That is why we will not sign the Social Chapter. And that is why we will not introduce a minimum wage.
I know you understand the reasons for this approach in Wales. Developments like that at Pontprennau, on the outskirts of Cardiff, have only come about because businesses have been willing to step forward and take their share of the risks and rewards. The benefits will be considerable: a new link road between the M4 and A48, over 1,600 homes, a 90 acre business park and a 20 acre district shopping centre. And Pontprennau is not an isolated example. In Cardiff Bay, the Development Corporation have already identified sites where they want the private sector to take part in their unique regeneration programme. The Government has an important part to play in this regeneration but it cannot do it alone. That is why the Private Finance Initiative is equally important, not only in Cardiff, but throughout Wales. John Redwood has already announced his intention to attract £1 billion of private sector investment into the South Wales valleys to create more housing and employment.
You don’t need me to tell you that Wales has also had great success in attracting foreign investment. This has meant an enormous boost to the local economy. The UK economy, and Wales in particular, has become a magnet for foreign investment in Europe. The UK is by far the largest recipient of inward investment into the European Union, and receives more than France and Germany combined.
Like the rest of the UK, the Welsh economy is well-placed to take advantage of the lowest inflation for 27 years, the lowest interest rates for 17 years, improved competitiveness and economic growth in our main export markets. There is every indication that Welsh businesses are responding well. To take some recent examples, Nippon Electric Glass of Japan and Schott Glasverke of Germany are joining forces in a joint venture to manufacture cathode ray tubes. This significant development will bring £193 million investment and the promise of 750 new manufacturing jobs to South Wales. And, a recent trade mission led by the Welsh office to Korea and Taiwan returned with firm and potential orders worth £18 million.
I could go on. A difficult time is over, and a better time lies ahead. After the long and bruising recession, British businesses have now regained their confidence. The last few years have not been easy, but by getting inflation and interest rates down we have laid the foundations for the steady and sustainable growth that we are now seeing. By working together we can make that growth last.