Mr Major’s Speech at the International Investment Forum – 14 December 1994
Below is the text of Mr Major’s speech held at the International Investment Forum, in Belfast, on Wednesday 14th December 1994.
PRIME MINISTER:
Mr Lord Mayor, Mr Secretary, Mr Trojan, Ladies and Gentlemen.
Let me first add to Paddy Mayhew’s very warm welcome to all of you at this Investment Forum this morning, and also my especially warm welcome to those who travelled from so very far away to be with us here in Belfast this morning. I also share Paddy’s slight embarrassment at this extremely early start for people who have travelled quite so far to be here, the hour perhaps may be a little unkind for those who have travelled so far, but we are determined on this occasion to make the most of the time that you have with us, in our interests, and we hope it will turn out in your interests as well.
When I announced this conference a few weeks ago I set a very ambitious timetable for holding the conference, and I did so for one reason above all, I think you felt it those of you who were with us last evening. Northern Ireland has a new beginning, I wish to keep up the momentum, I want people to see, with the minimum of delay, the benefits that peace is bringing, commerce, to industry, to everyday life, to all the people who live in Northern Ireland and have lived through such difficult times in the last quarter of a century.
Peace matters and perversely because peace matters it is worth fighting for, worth fighting for using every democratic and legitimate means available. And one of those of course is to deal with the question of prosperity, material well-being, to ensure that all the people of Northern Ireland can look forward to a secure future economically for themselves and their family, and that there are not people who find themselves disadvantaged and ready prey for those who would suggest more violent methods of using their time.
Those of you present today have made a magnificence response already to that invitation to come. And I would like to add my thanks briefly to Jean Denton who has done a great deal to bring this conference about at such short notice, to the Department of Economic Development and the IDB who have made absolutely Herculean efforts to make sure that an event, without precedent in Northern Ireland, has been organised at such speed. And after his generous words, also to express my thanks to Paddy Mayhew whose contribution during his period as Secretary of State I think cannot possibly be over-stated.
Let me say a word directly to the businessmen and business women who are here today. Sometimes as you go around the world looking at investment opportunities I suspect you are sometimes shown a wish and a prayer, I daresay you are invited from time to time to take a gamble on a fresh investment. Well that emphatically is not what I am asking of you this morning. The facts and factors which matter to those seeking to invest are now increasingly becoming known, the evidence of opportunity is all around and becoming more evident day by day.
I said last evening that you would rightly be hard headed about your investment decisions, and those of us in Northern Ireland would expect no less of you. So let me tackle the hard and important question head on, the question that you would have to go back and explain to your own shareholders if you decided to invest here – precisely why should you invest in Northern Ireland at this moment?
I think first you would want to look at Northern Ireland’s track record, and I think if you did so you would find, as I found on my many visits here, that this is a place steeped in industry and steeped in enterprise. Less than one mile from this hotel where we are this morning John Boyd Dunlop invented the pneumatic tyre; another Ulsterman, Harry Fergusson, developed the farmer’s tractors; at Short Brothers of Belfast, now under the wing of Bombardier of Canada, and what a successful partnership that has already proved, I had the pleasure of approving that when I was Chief Secretary of the Treasury some years ago and I think it has proved enormously successful, but under the wing of Bombardier flying boats and vertical take-off aircraft were pioneered; generations of ocean-going ships have been launched by the nearby slipways of Harland and Wolff.
And neither is Northern Ireland’s industrial pedigree just a matter of far gone past history, by no means, the ideas are still coming. Recently they have included defibrillators for the treatment of heart disease and a new one centimetre square silicone chip which can perform more than 300 million computations per second. And for those of you who have taken the time out from travelling round the world and investing to see the film Jurassic Park, you will have heard the digital sound compression techniques which were developed here in Northern Ireland.
It is therefore entirely appropriate to look at that in deciding whether this is the right place in the huge competition I know there is around the world for international investment. What is the argument for Northern Ireland? It is after all, some pessimists may say, only 15 weeks since the IRA ceasefire in Northern Ireland and only 9 weeks since the Loyalist Paramilitaries followed the lead the IRA had given. But even before then people were coming in growing numbers to do business in Northern Ireland. And why is it that they found Northern Ireland to be such an attractive and competitive location? I think there are several reasons for that.
First it has very high quality people here in Northern Ireland, sound managers and a well educated highly adaptable workforce. Northern Ireland has a lower incidence of labour disputes than anywhere else in the United Kingdom, and the United Kingdom in turn has the best current record of any major European country. Strife in all has been kept out of the workplace during the past 25 years. In the workplace people have stood together and they have got on with their jobs, and there is a premium here on training and skills which the government encourages with expert help and with financial assistance.
And second, business costs are very competitive here in Northern Ireland and very much lower than in most parts of the European Union. Coupled with a high quality workforce this gives a potent combination of low costs and potentially high productivity.
Let me offer you a third reason. Northern Ireland offers one of the most attractive incentive packages in Europe, it is comprehensive and it is flexible, it includes depreciation allowance, revenue grants to assist start-up costs, training, interest relief, product and marketing development and capital grants of up to 50 percent of the cost of buildings, machinery and equipment. That is not the main reason for investing here in Northern Ireland, but it is a package which gives new investment solid launching platform.
Fourthly, for investors from Asia and North America, Northern Ireland can be a bridgehead to the single European market, perhaps the richest trading market the world has ever seen; it provides access to some 320 million consumers combined with the competitive advantages I have mentioned and an excellent quality of life.
Fifthly, the modern investor looks for technological excellence; you will find it in rich abundance here in Northern Ireland. Northern Ireland has a vibrant network of industrial and academic collaboration, a worldwide telecommunications infrastructure and a regional optical fibre network. It has set up industrially-focused centres of capability and key technologies staffed by very high-quality graduates. The Province’s research and development capability will be enhanced by the science and technology agreement with the United States that I was delighted to witness being signed yesterday by Paddy Mayhew and by Secretary Ron Brown.
What of the support for Northern Ireland from the British Government and from our friends and colleagues in the European Union?
The British Government has long recognised the special needs of Northern Ireland – the investment package is perhaps but one example of that – but we in the European Union are following policies specifically designed to help Northern Ireland take full advantage of the new opportunities. A new support package worth around £200 million to Northern Ireland over the next three years was agreed by the European Union at the summit in Essen last week; Carlo Trojan from the European Commission will I am sure wish to give you further details of this in a few moments but that package has been worked out with the British Government in consultation also with others and on the advice of groups and interests throughout Northern Ireland; it will provide new money – extra money, not replacement money – additional to the Government’ s existing expenditure plans and it is specifically designed to underpin reconciliation and social and economic recovery. That means jobs, it means opportunities, it means a better future for many of the young men and women who otherwise would perhaps have looked forward with less optimism than now they will be able to. I warmly welcome the European Union’s strong support; I believe it is a massive vote of confidence in a future that is peaceful for Northern Ireland and I am most grateful to my colleagues in the European Union who unanimously agreed that those resources should be made available.
I would like to build on that this morning with another new initiative by the British Government – a Community Work Programme. Long-term unemployment is a severe problem in many parts of Europe but one which has for self-evident reasons been especially acute in parts of Northern Ireland. The Community Work Programme is a pilot scheme to tackle it here. It aims to offer the long-term unemployed stimulating and meaningful work for up to three years; this work will both help the community and benefit the individuals concerned; it will help them to move back into the labour market, it will break the vicious cycle of declining skills and motivation which long periods of unemployment can so easily create. This initiative will be led by the Training and Employment Agency; it will target those between the ages of 26 and 60 who have been unemployed for over a year, younger people from 18 to 24 who have already completed training programmes will also be eligible. We shall begin with a pilot programme of 1,000 places for the next two years specifically targeted to areas of high unemployment and assuming the pilot is successful, we shall then expand the scheme substantially.
Let me mention one other aspect of employment in Northern Ireland which is of concern overseas as it is of concern to me and to the British Government generally and that is fair employment in Northern Ireland. Unfair employment practices, sectarian discrimination in allocating jobs was one of the elements which in the past undermined community relations in Northern Ireland. We are determined to correct that legacy. Everyone in Northern Ireland must have equal access to jobs and indeed to all the new opportunities that peace will provide.
Northern Ireland now has legislation which requires absolute fairness in the recruitment and development of all employees, it ensures close monitoring of employment practices and closing the gap in employment is a slow process; it depends of course on much more than legislation – training for example is but one of a number of other vital factors. But the most important factor of all is to create more jobs and more opportunities. Ensuring the fairest possible employment conditions is an essential objective for the British Government and one I know that will have the warm support of everyone present at this Conference this morning.
Let me say something about external investment, its role, its importance at the present time. Let me turn directly to the impact that that can have. One figure will demonstrate why we attach so much importance to this and why you should feel also as potential investors that the climate here is already investor-friendly. In the manufacturing sector, almost half of the workforce in Northern Ireland is employed by some 175 overseas companies, investment from Britain and overseas lies behind many local success stories. Northern Ireland exports £1 billion-worth of food each year all over the world and to give you one but one example, one small firm in Coleraine – Dairy Product Packers – have already sold enough cheese slices to McDonalds to stretch five times around the world! [Laughter] Undoubtedly around the world you will have eaten them! [Laughter].
Service industries across Northern Ireland have taken off, the high-quality telecommunications infrastructure and low telecom rates make Northern Ireland an ideal location for offshore processing or network service operations, British Airways, Prudential Assurance, British Telecom and Royal Mail are just a few of the huge world-famous companies who have invested in this growing sector of the economy and so too have British Telecom of whom more in just a moment.
Northern Ireland has become the shirt-making capital the British Isles, every year 7 million shirts leave Northern Ireland; if you lose your shirt anywhere, look at the label, it might well have been made here! [Laughter].
The United States of course – who brought such a powerful delegation with them on this occasion and very welcome indeed they are – is the single largest source of international investment in Northern Ireland just as it is in the rest of the United Kingdom and I am delighted at the initiatives that the United States government is taking to promote a yet higher level of investment; they will be carried forward not just here but also at the successor investment conference to be held in Philadelphia next April; Paddy Mayhew will represent us there and he will take with him a very strong team from Northern Ireland.
Some of the biggest names in American business – Hyster, Ford, Du Pont, Fruit of the Loom and more recently Seagate have opened plants here committing literally hundreds of millions of dollars. Seagate’s managing director, Mike Caulfield, I hope will forgive me if I quote him, he describes himself as “a satisfied customer of the IDB”. I look forward to everyone present describing themselves in a similar fashion at some stage in the future. Its 65 million dollar hi-tech plant at Londonderry will double Seagate’s worldwide production of thin-film recording heads and in all a total of around 40 United States companies employ around 9,000 people in Northern Ireland.
Canada is represented by two of the largest and most technologically-advanced countries in the Province, Shorts-Bombardier and Northern Telecom with 9,000 employees between them. The contribution that Canada has made has been enormous in this respect.
And so too from Japan. Japanese businesses have been active, world-class companies such as Fujitsu, Kyocera, Takata and Riobi have established a very firm foothold and if I may digress just for a second, over the past 15-20 years the contribution that Japanese investment has made not just in Northern Ireland but right across the United Kingdom has been enormous not just in its development for industry but in many of the new techniques and new management structures that they have established that have proved such a remarkable success.
Companies from other countries in Asia have followed, among them the massive Daewoo Group which operates a state-of-the-art video cassette recorder plant close to Belfast International Airport. That operation is one of the biggest Korean investments not just in the United Kingdom but in the whole of Europe.
Closer to home, our neighbours in western Europe have been investing in Northern Ireland for many years, Nestle, Hoechst and Michelin are perhaps leading examples of that.
Tourism of course has a wholly new future if the peace that is becoming established were to become firmly entrenched. Hilton and Radisson are developing new hotels in Belfast and Limavady and it is very easy to see why to anyone who spends some time looking around Northern Ireland – to the golfer, the fisherman, the walker; to all who appreciate scenic beauty – Northern Ireland is now once again a marvellous place to visit and of course a marvellous place to work in and work from.
The best evidence I can give of all this is perhaps the evidence that speaks for itself. A number of large companies – five large companies – didn’t wait for this Forum before taking new investment decisions and they have kindly allowed me this morning to pass on their news and their plans to this Conference.
Du Pont is today announcing a £13.5 million investment to develop prototype technologies at its Lycra factory at Maydown in Londonderry. This brings Du Pont’s investment in R&D at Maydown to £38 million in the last three years.
Ford, which has had a sizeable presence in Belfast for 30 years, has decided to invest a further £15 million for the production of new engine components.
NACCO Materials Handling will be investing £11 million at Craigavon, consolidating the plant’s position as NACCO’s world source for its new 2-3 tonne range of Hyster and Yale forklift trucks. Over 100 extra jobs will be created by 1996.
British Telecom has decided to invest a further £30 million in a state-of-the-art office block at Laganside and a further £1.5 million to expand its Customer Services Centre at Enniskillen; that means another 113 jobs.
Finally, Fujitsu – a global giant which already has enormously successful operations in Antrim – will be putting over £3.5 million into a new factory and this will create 100 jobs at Springvale Business Park in West Belfast. It is of course particularly encouraging that Fujitsu should choose West Belfast where areas of unemployment are high; it will give hope to the area as indeed will each and every one of those investments that I have just mentioned. [Applause].
Let me fit into this the broader economic picture for Northern Ireland and the United Kingdom as a whole. Northern Ireland has shared in the recovery that has been going on in the United Kingdom for the past couple of years. Unemployment here is falling month after month. In the last quarter, manufacturing output was up by 4.4% on the corresponding period for a year ago. The ceasefire has unleashed business confidence which was already on a rising curve. Belfast retailers have experienced a quite extraordinary upsurge since the ceasefire, registering increased turnover of up to 90% in some cases.
Peace will add a dividend to Northern Ireland; it will add a dividend in Northern Ireland to the sustained low-inflationary growth that we are now achieving right across the United Kingdom, growth helped by sound public finance, low tax and regulatory burdens on business and open, competitive markets. Our main rates of corporation tax are very competitive, at 33% the lowest in the European Union or indeed for that matter the Group of Seven. Our inflation, now at 2%, is at its lowest figure for a quarter of a century and amongst the lowest rates in Europe. The future for the whole of the United Kingdom’s economy has not been so bright for very many years and Northern Ireland is an important part of that future.
While the change in Northern Ireland over the past three months has been dramatic, the seeds of that change were planted long ago, As you visit different parts of the Province later today, you will see for yourselves some of the results of growth. Those who go to Londonderry, for example, will see a quite extraordinary turn-around. A few years ago, the city’s economic and social problems provoked bleak despair. But Derry now has new infrastructure, new factories, a new commercial seaport and a new airport. Long before the ceasefire, a great deal had been done to reduce tensions within the city.
You can see similar changes in Belfast and in many small towns. In Dungannon, near the border, I saw on my last visit new hospital facilities of which any town anywhere in the United Kingdom would have been proud. In Lisburn, I visited a fascinating small museum which was equally enviable.
There are hundreds and hundreds and hundreds of other examples I could quote but I would much rather you saw them with your own eyes. These are things that have come about despite the divisions in society and despite the fear of violence. What terror knocked down, time after time after time the brave people of Northern Ireland rebuilt; if they could do that in the midst of terror, contemplate what they might do in the midst of secure and lasting peace! I believe what they achieved here in Northern Ireland is a remarkable testimony to the determination and enterprise of the people of Northern Ireland – to human qualities which you can’t teach or manufacture. I think you will find those human qualities the most compelling reason of all perhaps for taking a stake in the future of Northern Ireland.
The scars of violence are there – of course they have to be there – they will take time to heal fully. There are still large problems in politics and in society to be overcome. The ceasefire, welcome though it is, has yet to be turned into a lasting peace but I hope and I believe that you will leave here filled with hope, with optimism and I hope that many of you will decide that an investment in Northern Ireland’s future is a good investment for you, for your company, for your shareholders, for your company’s future. If you do make that decision, not only do I believe you will have made a remarkably wise commercial decision but if you do, you will achieve something else as well, you will reinforce the virtuous circle now taking shape in Northern Ireland. Peace is giving rise to prosperity, prosperity in turn will consolidate and entrench that peace.
I believe that Northern Ireland now has everything that it takes to grow and to succeed. I hope that this Conference will play its part in helping to find opportunities to suit your companies and your own particular interests. Above all, I hope it will lead you to return often to Northern Ireland. If you do, I know that you will find – as I have always found – that it is a genuine pleasure to be here and to do business here. The opportunity is here; the time is ripe; the welcome is warm; and I hope today’s Conference will persuade you that Northern Ireland is a good place in which to do business.