Below is the text of Mr Major’s speech on Choice and Freedom for All, made on the 19th September 1996.
CHOICE AND FREEDOM FOR ALL: THE MORAL CASE FOR A SMALLER STATE
Tonight I want to talk about the role of government. Not from the perspective of political theory, but from practical experience. Why my aim of smaller government can produce better government and better public services.
The role of government has changed massively – and is still changing. All around the world, people ask the fundamental question – how much government do we want and what kind?
Some might have imagined that the 1980s would have settled this debate. The pressures of a global market place were already evident. The centrally planned economies collapsed and the victory of the free market model was clear.
That remains true. But it doesn’t settle the question. Because within the free market economies there are many differing visions of the role of Government.
At one end of the spectrum are most members of the European Union, with the state spending half or more of the nation’s income and a long tradition of high state intervention.
At the other end are the US, Japan, and the emerging Asian economies spending around a third or less – in some cases much less.
Britain is somewhere in the middle, with the state spending a little over 41 per cent of GDP.
A look at the growth and job creation records of countries with a smaller state argues persuasively the economic case for restraining public spending.
And that is certainly one, though not the only, reason why the Government has set a target of getting public spending below 40 per cent of national income.
When we achieve that I believe we should look further at a lower target.
But the case for smaller Government is as much a moral case as an economic one.
“Moral” is a word I usually prefer to leave to the Church but it is apt for what I intend to say.
For example, is it moral to take from individuals the right to make personal decisions? I think not.
Is it moral to impose obligations on employers like the Social Chapter and the minimum wage that will cost jobs and prevent those without jobs from getting them? Again, I think not.
Is it moral to compulsorily take too much tax from people for government to spend and diminish individual choices? My answer is no.
Smaller Government fits with a belief in individual freedom and choice – still one of the basic divides in British politics.
I start from the presumption that government should not interfere and meddle where it is not needed. The belief that power, choice and responsibility should, wherever possible, be left with individuals and their families, with entrepreneurs and businesses.
I don’t want my personal choices made for me by the State. Nor do most people. Nor is it necessary. The British people are better able to order their lives effectively than the most efficient and humane of Governments.
‘Trust the People’ is an old Conservative battle cry. It must be central to our future policies.
We aim to regulate less of people’s lives.
We trust people to spend their money, or save it, or give it, and to do so sensibly.
We don’t believe most people are selfish or greedy.
And we think they can be trusted to exercise those instincts themselves – not to have them exercised on the people’s behalf by men in Whitehall who claim to know better.
So we aim to tax and spend an ever smaller share of what people earn. To reduce and, in due course, abolish capital taxation.
I want to do that because it makes good economic sense; it ends a penalty on enterprise and investment; it will release capital and create jobs. And that is the right thing to do.
There is a moral case for low taxation if you genuinely want to see growing prosperity and more employment.
And it is that moral view, just as much as the economics, that leads me to the conviction that the state should progressively disengage and do less – but that what it does it should do well. Indeed, I believe that by doing less it is more likely to do better.
I can hear the cries of ‘uncaring Conservatives’ already forming on the lips of our opponents.
Cut taxes? Just an electoral bribe, they say.
End capital taxation? Just a ramp for the well to do.
But these cries just blur the argument. They are nonsense. We should not be put off by them. They are the baggage of a welfare state mentality that distrusts personal choice and resents personal ownership.
I reject the muddled thinking that says a smaller state must be uncaring. And I reject the thinking that equates big government with benevolent government.
We’ve seen time and time again that high government spending and good public services don’t go hand in hand. If they did what a glory there would be in some states.
But look at the failure of socialism to improve people’s lives in Eastern Europe. Or the recent strains and popular unrest in high spending economies in the EU as they seek to cope with escalating public budgets. And at home you only have to look at the Britain of 20 years ago, with its crumbling state industries, high tax rates and economic malaise.
Practical experience of Government suggests to me those failures weren’t an accident, a workable philosophy misapplied or derailed by the unexpected. The more I see of Government from the inside the more I believe those failures were predictable, the result of applying fundamental principles that are diametrically opposed to common instinct, common freedom and common sense.
Underlying socialism, democratic socialism – or even social democracy – is a set of instincts that favours State control. Where there is a choice it is always to be exercised in favour of the State, and too often by the State.
It’s not always put in those terms, of course. But because the mind set of Socialists and social democrats is to trust Governments more than individuals, their instinct is always to try and bend individuals, businesses, markets, to behaviour they would not naturally see as being in their interests.
It’s those instincts that lead to high spend, high tax policies, and to ever more regulation. They may be dressed up in the name of better public services. But underlying them is a confident belief that the Government knows better how to spend your money than you do. That government control can produce better outcomes than free choice.
It’s a philosophy that has two outcomes – both bad. First it stifles enterprise and wealth creation.
And – second – step by step – too much government control traps individuals in a culture of dependency. Choice, freedom, independence are gradually whittled away until the citizen’s only response is that the ‘government ought to do something about it’. And, of course, all too often the government can’t. The citizen feels helpless.
At its worst it means that if you are poor the state makes all your choices for you, but if you are well to do you are free. The goal I aim for is to give more choice to everyone.
If the state takes on more and more responsibilities, it becomes the keeper of the individual’s conscience and duty. There is a danger that people will think their obligations to others are fulfilled solely by paying taxes – whereas they are not, and cannot be.
I believe that the enrichment of this country – both economically and socially -will come from the people of this country, as individuals, families, businesses, public servants.
And I believe it is right to think of government as an enabler – not trying vainly to script and control every move, but providing the conditions and support to help people to succeed themselves.
That’s why we encourage ownership – of homes, pensions and other forms of savings to give people security and independence.
It’s why we’ve taken steps to reduce the future growth of the social security system, bringing it within the growth of the economy reversing the trend since the war.
It’s why we emphasise improving standards in education.
It’s why we are looking again at protecting the public from industrial action in essential and monopoly services.
It’s why we have opened up the telecommunications industry and deregulated broadcasting, the control of shopping and licensing hours.
It’s all been about restoring choice and freedom to the individual.
But while I argue for a small state, I am not arguing for a minimalist state. The state does have a role but we must keep it in proper bounds.
The great political advance has been to recognise that public interest does not always require State ownership. It is not a paradox to say that a private company can be a public service.
Not so long ago it was thought that public services like phones, gas, water and electricity had to be publicly owned and had to be monopolies. Now we have shown that private ownership, competition and regulation can protect the public interest better than public ownership.
It must be galling to those who believe in the innate superiority of State control to see how private ownership has transformed standards.
Our phone, gas and electricity prices are now amongst the lowest in Europe. Rail fares are capped as never in the past.
Our water industry is at last able to afford long-delayed investment. The consumer gets better quality.
We now have phone boxes that work.
Better standards of service.
Compensation if they let you down.
And quality is increasingly bolstered by choice, an everyday reality in telecoms and increasingly so for gas – with people actually knocking on doors round the country offering cheaper gas. And soon competition will begin in electricity and water too.
And if we had not de-nationalised I wonder what the standard rate of tax might be today to deliver services of this quality under public ownership?
Of course, improving services and giving power back to consumers is not how it is seen by our political opponents. To hear them talk, you would believe denationalisation amounts to abolition. Their mind set has not moved on from their traditional hostility to private ownership. All sorts of scare stories were peddled. But the reality has been quite different, and a huge success.
But private ownership is not the best answer for all areas of the public sector. There are some where it is simply not right, or acceptable, for the government to cede its role.
To take an obvious example, no Conservative would argue that the State should not have the responsibility to provide a secure defence, or an effective police force.
Equally, it is right that we should provide universal access to a taxpayer-funded Health Service, and to provide every child with the choice of a State-funded education.
And other areas are self-evident, such as the welfare safety net.
But where privatisation is not an option the Government has a double responsibility to ensure efficiency and good service.
We owe that to the consumer and taxpayer – after all it is their money, compulsorily extracted. And we owe it to the people who work in our public sector to help them deliver the best possible service.
But if that is our aspiration, how do we deliver it? There’s no simple straightforward solution. The public service has to be picked up, shaken down, re-shaped and given a new culture. That is what I am seeking to do and I’d like to bring the strands of that policy together for you.
Our problem is not the many dedicated people who work in the public service, it is the structure and culture of monolithic post war public service that has weighed against them.
So what are we doing about that?
First, we recognised that too many public services have been run by organisations that were too large and bureaucratic.
With control sucked to the centre, they became insulated from the issues and problems on the ground.
Their front-line workers were often as frustrated by inflexible bureaucracy as the public itself.
And second, since the system was so reluctant to provide information on service standards, and there was no choice to go elsewhere, there was no countervailing pressure – and few incentives – to put their customers’ interests first.
To deal with this I believe we needed a revolution in the way Government runs itself.
We’ve slimmed down the number of government employees – at a time when it has been growing in most of our major competitors – and wherever possible we’ve broken up the large monoliths and created smaller, more manageable units closer to their users.
The Health Service is a good example.
I, and successive Health Ministers, have been attacked for years for seeking to improve the service of a much loved national institution. But what our reforms have done has yielded huge efficiencies to be ploughed back in patient care.
And the smaller, more manageable units that have resulted – Hospital Trusts, GP Fundholders – have a much closer relationship with their local community and a much better appreciation of their needs. The intention is that the people providing the service look outwards to the people they serve rather than upwards to the top of some distant organisational pyramid.
As our health service develops, I believe these reforms will ensure it always takes account of the need to serve people on a human scale – at local level. People first means efficiency first.
Of course any reform is traumatic. I was involved in the NHS reforms from the start – and they were no picnic.
But I also remember why we did it. Who could forget Sir Roy Griffiths’ famous remark that if Florence Nightingale were wandering the corridors of an NHS hospital in the eighties, it would be because she was trying to find out who was in charge.
A bit too true to be funny, actually. I remember being astonished, as Chief Secretary, how little we knew about where the £20 billion we spent on the NHS was actually going. I asked questions. Officials scratched their heads. No-one knew the answers.
But it’s not just a matter of changing management structures.
Increasingly we are also introducing private finance into public services. This makes taxpayers’ money go further, which is the only realistic way to deliver the better services and infrastructure we all want. And the successes are already visible, for example in our inner cities where challenge funding has harnessed public and private money to achieve tremendous results.
Of course some of the changes we’ve made to devolve management and bring in the private sector have provoked a huge debate about Parliamentary accountability. Some politicians believe Ministers must know and control every tiny action and detail.
Well, they don’t.
Frankly, they shouldn’t. And it’s silly to pretend otherwise.
Yet, for years past every successive Minister and for that matter Prime Minister has been expected to answer questions of administration that fall far below the level of policy. No wonder Question Time sometimes sheds more heat than light.
The idea that Ministers are omnipotent is very flattering but history and experience argues against it. And in the complexity of modern government, it is absurd. The important thing is that Ministers are accountable for getting public services properly managed, putting someone in charge with clear objectives and making sure they are kept on their toes.
I have seen the injustice and indignity and demoralisation that people feel when public service is frustrating and patronising.
I’m not prepared to tolerate a culture where it is the norm to wait in queues, to be passed around from pillar to post, and treated like a cog in some labyrinthine machine.
That must change. And the way to change it is to continually ratchet up the quality of service; to tell the consumer the standards he has a right to expect; to give the information about the service he’s getting, and offer decent redress for failings.
That’s why I launched the Citizen’s Charter five years ago. I saw it then as a ten year programme. But attack came immediately from all sides – as so often happens, when you aim at fundamental change.
Some thought the standards too demanding: others too modest. Some thought it all a gimmick. Others said we were only tinkering. Most believed we would never deliver targets and standards.
But these improvements are happening. Spectacularly in some areas, patchily in others. But they are happening.
Only a few years ago the holidaymaker used to have to wait three months for a passport. Now it usually takes just a week.
Not long ago, some 170,000 patients had to wait more than a year for hospital treatment. Last year, that was fewer than 5,000.
Several patients used to be given the same hospital appointments and then be expected to wait the convenience of the consultant without complaint. Patients now get a timed individual appointment in hospitals and should never have to wait more than 30 minutes.
We see even more fundamental improvements in education, where tests and performance tables are finally giving parents the information they deserve. Gillian Shephard will shortly be announcing further measures to drive up standards, including increased use of targets in a variety of areas.
In these ways, standards are pulling up public service performance to levels far better than we have seen before.
And, as they do, I expect them to raise the public’s expectations. And that too is happening.
The White Paper published tomorrow will show a near quadrupling of nominations by the public for Charter Mark awards – more than 15,000 nominations this year from last year’s 4,000.
To me that suggests the Charter is increasingly taking root. And in time I have no doubt my ambitions for the Citizen’s Charter – a fundamental shift in power from the state to the consumer – will be fulfilled.
Of course, we still have much to do. We are only half way through our programme. But the direction in which the Government wants to go is towards more choice, more information, more accountability.
Some like to claim these days that the main political parties are closer together than ever.
I wonder how true that is when it comes to hard decisions – rather than oratory.
The kind of programme I have set out tonight requires perseverance to drive it through. If you come to a boulder in the middle of the road do you drive to the left or the right? Your instincts take over. If you come to problems is your instinct to trust the government or the private sector to find a solution?
Our instinct is for less government. Our opponents’ instinct is for more government. This is still a sharp divide.
I believe our programme to reform government is more than a managerial question.
For me, there is no more political question than how we define the limits of the State, how we run our public services, how they treat their customers, and how the burden of financing government falls on the economy and the individual. These issues touch on the fundamental philosophical and political divide between the parties.
I have spent my life fighting on one side of that divide.
My beliefs are for a future with a smaller state and lower taxes. Where individuals and families have more independence to own and save.
This is a distinctive Conservative agenda with a common theme: choice and freedom for everyone. Not for one class, not one faction, but all in society.
Having built the strongest economy we’ve known for decades, we now need to turn to giving all in society the chance to take more control of their lives. Those living in Labour strongholds, just as much as those in leafy Conservative heartlands. They all matter just as much.
Extending choice and freedom is an endless task, performed against the clamour for the government to do something – be it spend more, intervene more, regulate more.
But, as I have explained tonight, that is not my way. The right role for Government as we approach the millennium is quite different.
It is to enlarge choice, not restrict it. To extend freedom, not curtail it.
To trust the people more and control them less.
That runs with the grain of what the British people want, and that is what I set out to deliver.