Mr Major’s Speech to the Annual Focus on Scotland Dinner – 3 September 1996
Below is the text of Mr Major’s speech to the Annual Focus on Scotland Dinner, held at the Hilton Hotel in Glasgow on the 3rd September 1996.
PRIME MINISTER:
Ladies and Gentlemen, I’m delighted to be back in Scotland and back here in Glasgow.
The last time we were due to meet was, of course, postponed after the awful events in Dunblane. No one who was in Dunblane at the time or who, like me, visited it shortly afterwards will ever forget what happened there.
The Secretary of State asked Lord Cullen to inquire into the events, report and make recommendations.
He is doing so. As soon as we have his report we will decide on it and act on it speedily. If legislation is necessary we have already reserved a place in our programme for it. There will be swift decisions and swift action.
Events like those in Dunblane put politics into perspective.
I love politics but I don’t love it to distraction.
Frankly, there’s just too much of it.
But the substance of politics – the hard political policy choices – are important.
Because politics does change people’s lives.
Take Scotland, for example.
Think back to what life was like almost 20 years ago.
Loss making, subsidised industries. Shrinking markets. Growing dole queues.
Some 20 years on, things are better. Immensely better. The economy is growing. It’s dynamic and diverse – with exporters who are the envy of the world.
The transformation has been breathtaking.
Since 1981, inward investment of over £5 billion – protecting or creating over 80,000 jobs.
A faster annual rate of economic growth than England over the last five years.
Record breaking levels of manufactured exports – growing at twice the rate of the rest of the United Kingdom.
And that success backed by low inflation, lower taxes, low costs.
These didn’t appear by magic. Getting here meant taking tough decisions, some of them politically unpopular. It meant standing up to the heat of the day and fighting for what we believe in.
But these hard won achievements – and they were hard won – are easy to lose. They can be thrown away if Britain takes the wrong turning. If it’s lulled into believing the soft sell that many politicians love to peddle.
It’s always tempting for politicians to sing the tune people want to hear. To promise people new rights, new conditions at work, new minimum wages.
It’s easy – but dangerous.
Because these all early a price tag. And the price would be paid in investment and jobs.
Many of you here tonight are businessmen. You take hard-headed decisions, aiming to get the best for your company, your workers, your shareholders, every day. You know the importance of keeping costs down so the profit on the bottom line goes up.
I’m in no doubt that Britain’s success – Scotland’s success – at attracting record levels of foreign investment is partly due to our determination to keep costs low.
Lanarkshire, once the pulse of the first industrial revolution, is now the cradle of today’s technological revolution. After the steel works at Ravenscraig closed, we said we’d help find new jobs. We’ve done precisely that: three projects will offer 4,500 new jobs in Lanarkshire alone.
Those companies enjoy Britain’s sharp competitive edge. For every £100 spent on wages in Germany, an employer spends another £32 on costs. In Spain, it’s an extra £34. In France £41, in Italy £44, But in Britain, it’s only £18. We must hang on to that edge. I’m not prepared to put it at risk by signing up to the Social Chapter. To open the floodgates to a whole raft of expensive burdens on business.
Labour like the Social Chapter because they believe it will deliver what the trade unions want by the backdoor.
It’s no use people claiming that if we gave away our opt out, we could pick and choose what to accept and when to implement it. They obviously haven’t read the Social Chapter’s small print. I have, and I can tell you that once in, there’s no way out. For much of it, there’s no picking and choosing. No saying have that bit, but not that. That’s why I fought for our opt out, and why I won’t give it away. To me, British jobs and business come first.
Then there’s that seductive little phrase, the minimum wage. Yes, it sounds seductive. It’s meant to. But people can only earn a wage if they have a job in the first place. And if you force an employer to pay a wage he can’t afford, then he won’t employ because he can’t. And if a junior employee is suddenly paid more simply because the Social Chapter or the government says so, everyone else in the company could well demand the same pay increase.
So a minimum wage spells inflation. A minimum wage spells job losses. And it hinders youngsters looking for work. France has a minimum wage. It also has youth unemployment of over 26%. Spain has a minimum wage. It also has youth unemployment of over 41%.
Those who argue for the Social Chapter and minimum wage may well have good intentions. I’m sure they have. But they’d be hurting the very people they want to help.
And, of course, here in Scotland they’d be knocked for six by Labour’s plans for devolution.
Devolution
Some may believe devolution would help Scotland.
How? Would it help create new jobs? Build more homes? Attract new investment?
The last time people hurtled into the constitutional chaos of devolution it took them four years to produce an unworkable and defective Scotland Act. That futile exercise involved producing a White Paper, revised not once but three times; introducing a Scotland and Wales Bill to Parliament and then withdrawing it; and then introducing the Scotland Bill, which pushed Parliament into a legislative quicksand.
No wonder it all fell apart. But the rocky road to devolution in 1979 looks like a fast track compared to this steeplechase of stupidity Labour has set up for itself now.
First, they have to win a General Election. So far as I’m concerned, they won’t get past that first fence. But, supposing they did, they would then have to publish a White Paper on a Referendum; get a Referendum Bill through both Houses of Parliament; fight a referendum campaign; and get ‘Yes’ answers to two questions.
If they succeeded – and it is a very big IF – only then would they reach Beecher’s Brook: the Devolution White Paper; the Devolution Bill, to be fought through both Houses of Parliament; and eventual elections for a Scottish parliament.
Then – and this is a further punishment self-inflicted last Saturday – there would have to be a second referendum, asking the Scottish people to impale themselves, their jobs, their standard of living, their inward investment and their competitiveness on the stake of the Tartan Tax.
That is the stake Tony Blair holds for Scotland: discriminatory income tax starting – but who believes finishing? – at 15 per cent higher than the rest of the United Kingdom,
This policy has now turned into farce. It’s more suitable for London’s West End, not Westminster.
It is an absurdity. A nonsense.
Only a few months ago the Shadow Scottish Secretary dismissed a referendum as a ‘delaying tactic’. Now he’s supporting not just one, but two of them.
Even pro-devolution commentators are now damning Labour’s botched scheme as ludicrous. And so it is. It wouldn’t help create a job, attract investment, or build more homes.
Some might think that it would be worth the pain of Parliamentary paralysis to get devolution. That edging towards the break up of the United Kingdom would be a price worth paying.
I profoundly disagree.
I believe the Union benefits everyone, irrespective of income, both north and south of the border,
But those living north of the border, people with hopes and ambitions for a better and brighter future, have most to lose and least to gain from a tax-raising Scottish parliament.
Ask yourself how it would help them if Scotland had a parliament that could put an extra 3p in the pound on income tax. For starters. More later.
That increase – the Tartan Tax – would cost many families an extra £6.50 a week.
Over £330 a year.
That’s the starting price of devolution. The price Scotland would pay for the privilege of becoming the most heavily taxed part of the United Kingdom. Scotland’s prosperity would be going, going, gone.
And there’s another thing. People who are forced to pay higher taxes have a habit of demanding higher wages.
Would it help attract companies from overseas to Scotland if they faced the prospect of wages spiraling up and up? Do you want to send jobs back across the border to England?
Of course, I know some might argue that the Scottish parliament would actually cut taxes.
Imagine that it chose to do so.
At the moment, the government spends a quarter more in Scotland than in England. That’s over £17 more per person per week. Spending per head on health is almost a quarter higher. On education, almost a third higher.
Overall public spending in Scotland exceeds the amount raised in Scotland by over £8 billion. So why do people want to alter a system that so obviously works in Scotland’s favour?
So how could a Scottish parliament realistically cut taxes? I have yet to hear how English MPs might be persuaded to continue spending more cash in Scotland than on their own constituents, only to see it spent subsidising tax cuts north of the border. It’s a laughable proposition.
But what if English MPs proposed to cut Scottish spending? A Tartan Tax would raise only a fraction of the current transfer – a mere £390 million. Where would the shortfall come from: higher taxes or fewer public services?
These questions haunt the quagmire of the constitutional debate. No one has answered them because they either don’t know the answers, or don’t dare give them.
Instead, we’re told by our opponents, as they wriggle on the hook, that they have no plans to raise the Tartan Tax at all. If that’s the case, why hold two referendums to give a parliament the power to raise it? Why have these plans at all?
But suppose the Scottish people were wise enough to vote against this tax-raising power. Suppose they chose not to become the most heavily taxed part of Britain.
Without that power to raise taxes, a Scottish parliament would have less power than the present Scottish Grand Committee. Scotland would be left with less influence but more bureaucracy – a toothless assembly our opponents have fought against long and hard.
Jobs, Incomes. Investment. A record of success and a bright future. That’s what these plans put at risk. New taxes and no Britain. That’s no bargain for Scotland.
Peroration
Ladies and gentlemen, these issues are at the heart of political debate. They are matters of substance.
They need to be debated – and they will be. We will return to them again and again and again. That I promise you.
Change, something different, something new, might sound tempting,
But new things, untried, untested, have a habit of going wrong.
Today, life in Scotland is better. People need to ask themselves if it makes sense to risk the opportunities that lie ahead in favour of the most reckless and ill-thought out package of change this country has ever seen.
You’ll hear it said that a change would be ‘good for democracy’.
Good for democracy? Unhinging the Union? Setting up a Scottish parliament, half unelected? Sprinkling assemblies across England? Risking the chaos PR would bring? Dismantling Parliament itself?
That wouldn’t be good for British democracy – a system that’s envied around the world. It could destroy democracy.
Britain is one nation. Our policies are for one nation. For people who live in Govan and Guildford, in Bournemouth and Belfast, in Carlisle and Cardiff. North of the border and south of the border.
We need to focus on Scotland’s success. On the bright future that lies before her, And on a United Kingdom that has served this island for centuries, and that we can turn into the envy of Europe in the years to come.