The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997


Sir John Major’s Speech at the Institute of Directors Annual Dinner – 28 November 2013

The text of Sir John Major’s speech made at the Institute of Directors Annual Dinner on Thursday 28th November 2013.


Many years ago, your Director General, Simon Walker, was a much valued member of my Policy Unit so – when he invited me to join you this evening – I was delighted to accept.

I wish to talk of three events that will shape our future:

• The Referendum on Scottish Independence

• The likely Referendum on our Membership of the European Union

• The General Election

Let me start with Scotland.

Next September, Scotland will vote on whether to break the Union and become an independent State. Such a vote would cut Scotland loose, and her loss would be felt across the UK. In their campaign, the SNP assert that the Pound Sterling is as much Scotland’s currency as it is England’s; that is true now but not if Scotland left the UK.

Independence means Scotland walking away from the UK and its institutions. This must include the Bank of England, and Sterling.

The whole point of independence is to enable Scotland to take her own decisions – yet she cannot do so if, upon a central economic matter, she has no control over monetary policy and no lender of last resort. That cannot be the Bank of England: the Bank is answerable to the UK Government and Parliament – not any future Scottish Government.

A currency union – which the SNP assume is negotiable – would require the UK to underwrite Scottish debts: that cannot – will not – happen if Scotland leaves the Union. There can be no halfway house: no quasi-independence underpinned by UK institutions.

Scotland could perhaps – in time – adopt the Euro. But first she must apply to join the EU, where many States would have concerns about the accession of a separatist Member. Spain: how would Spain feel – with breakaway movements in Catalonia and the Basque Country? Spain uses uncertainty over EU membership to deter Catalonia from even holding a referendum on independence. It is hardly likely she would happily wave in Scotland. Spain will not be alone in being wary of separatist tendencies.

And, even if Scotland were to enter, she would discover that within the EU the clout of the smaller population nations is …. small. Time and again, she might regret the loss of automatic British backing. Scottish voters need to know the chilly reality of what is being offered to them.
But what of Britain? It is simply not possible to have a large chunk of the UK break away – without weakening what is left. British influence would fall in Europe, NATO, the UN and all international gatherings.

There would even be some very unpalatable consequences for our nuclear deterrent. If an independent Scotland ejected it from the Faslane Base – as the SNP have threatened to do – it would be extremely difficult and costly for the Ministry of Defence to replicate it elsewhere.
If Trident were to be dismissed from Faslane, it is likely that the Ministry of Defence would remove from Scotland the whole of the submarine enterprise – including the Royal Navy’s attack submarines and the submarine centre of excellence. Would Faslane survive? One can only guess. But without contracts from the Royal Navy I doubt it.

It is also doubtful the SNP would be able to enter NATO – as they wish – since their opposition to nuclear weapons is inconsistent with membership. Scottish electors must know and understand what independence may cost them.

The SNP’s “ace in the hole” has always been the North Sea Oil and Gas reserves. But their estimate of reserves is twelve times greater than that of the Office of National Statistics. Who is right? I don’t know. But voters may wish to be wary of promises based on false optimism.

Be in no doubt: in politics, commerce and the Armed Forces, Scottish influence is important to Britain. Of course, anti-English sentiment from separatists irritates and enrages – as it is intended to do – but across the UK people know and value Scots as partners, work colleagues, friends and neighbours. It is hard to imagine Scots becoming – “foreigners”. But, if they do, nothing will ever be the same again.

For three hundred years, the Union between Scotland and England has served Britain well. Together, we have become safer, richer, more influential. Surely it is wiser to celebrate what we have achieved together, than to allow grievances – some imagined or exaggerated, others simply manufactured for political purposes – to tear us apart?

The SNP have chosen the ancient anniversary of Bannockburn for their Referendum. Yet a greater anniversary looms. Next year sees the Centenary of the beginning of the Great War, in which the English, Scots, Welsh, and Irish – the whole of the United Kingdom – fought together for freedom – as they would again 25 years later. Many thousands of Scots fought and died in these conflicts. Would it not be a tragedy if – as we honour their sacrifice – we do so as separate nations?

The European Union continues to divide public opinion in the UK. Even where it appeals to our head, it consistently fails to appeal to our heart. We need to sort this out. That is why the Prime Minister is absolutely right to re-negotiate where he can, before holding a referendum on Membership. Let our Sovereign electorate decide: that is the right way to secure Britain’s place in a reformed EU.

Yet, suppose we left:

(i) we would have to negotiate our exit which could cost billions;
(ii) we may have to pay for access to the Single Market: Norway, a non-member, pays 80% as much per capita as we pay as a full member;
(iii) we would lose inward investment – ask Japan or Korea, or even America;
(iv) we would still have to implement EU regulations, yet would have no part in framing them; and
(v) we would be unable to protect the City – or any part of our industry – from harmful legislation.

Of course, we would survive – but there would be a severe price to pay in economic well-being, in jobs, and in international prestige. In a world of 7 billion people, our island would be moving further apart from our closest and largest trading partners, at the very time when they, themselves, are drawing closer together. This makes no sense at all.

Nor would a UK exit make any sense for the EU, which would lose:

(i) one of its biggest economies;
(ii) the long and historic reach of British diplomacy;
(iii) the nation with the most significant military capacity.

The EU would be diminished. The UK would be isolated. I am no starry-eyed Europhile but it would be a lose/lose scenario: a truly dreadful outcome for everyone.

Before the referendum will come negotiations. I believe the British position is far stronger than many believe – not least due to the significant personal alliances the Prime Minister has formed with his European counterparts – though the manner of our negotiation will be key. We need to negotiate with the grain of evolving views across the EU. We need to hoover up the allies that already exist on many issues. We need to be smart enough not to ask for the impossible.

The route to full federalism for the Eurozone members is banking union; fiscal union and – ultimately – political union. There is no silver bullet to achieve this swiftly, and the Eurozone will edge towards it slowly, uneasily and haphazardly. As they do, they will face many setbacks – not least since full federation across nations is profoundly undemocratic, and public opinion across the Eurozone may well thwart their best laid plans. As for the UK, we have no obligation to join this escalator – even if it begins to move.

After the financial crash – even a “watered down” banking union is proving difficult to agree across the Eurozone. Fiscal Union – once assumed to be inevitable – now looks a long way off as European electors examine its democratic shortcomings. And full political union (the Shangri-La for many) is barely even talked about – except negatively.

Even the Dutch, once core federalists, now shy away from it, and seek reforms. Their Prime Minister says “the EU must become leaner and meaner”. The Germans say “we don’t have to do everything in Brussels”. These are hardly siren calls for a dash towards political union. Nothing is forever but, for the foreseeable future, “ever-closer union” and “full political union” – expressions that call many Britons to man the barricades – seem very, very far-off indeed.

Unusually, we know the date of the next General Election. We know also the recession is behind us. A brave policy, an unpopular policy, has proved to be right. Our economy is recovering and – although there is no room for complacency – I believe it will swing to growth faster than expected.

As it does, I hope that the electors will remember that, however well-intentioned their motives – however seductive their message – every single Labour Government we have ever had has left behind a ruined economy – the most recent one in spectacular fashion. And David Cameron and George Osborne are the pilots who have weathered that storm. No-one should forget that.

As the economy recovers, policy initiatives will begin to bear fruit: like many millions of others, I have a stake in the next generation and the one beyond that: and I welcome the Government’s long-term reforms for the future.

Opponents may criticise proposals on social policy, education and housing but few can deny that reform is necessary.

And it is not only social problems that need action. Our infrastructure is tired and inadequate. We need more air and sea port capacity.

Upgraded roads. And, even though private capital has poured billions into our railways, more needs to be done.

And it is no use demanding better infrastructure and housing if we oppose schemes to deliver it. I know some members of the IOD oppose high speed rail. I believe they are wrong. We need more growth in the North if we are to bequeath an economy that enables future generations to thrive. And, unless we wish our children to endure a lower standard of living, we must build more homes.

I was in politics for many years. I can look back and acknowledge my mistakes and urge others not to repeat them. These days, I travel the world but always return home to a country that – taken as a whole – has few, if any, equals in the freedom, liberality and kindliness that are its essential characteristics. We must never lose those qualities: no nation can be great if it is inward-looking and small minded.

For all the frustrations we face, our country offers a way of life that most of the world looks at – and envies. I had hoped to build a country that was at ease with itself. I failed to deliver that. But it can be done … to ensure we live in a country that – whilst striving to be the strongest – has the compassion to care for the weakest.

Political messages can often be coded, imprecise and ambiguous. Not tonight. I am clear that both Scotland and England gain from being joined together in one United Kingdom; clear that the UK is better off in the EU, but not the Eurozone; and clear that we should not change our economic leadership. If you are finally being hauled out of a deep, dark hole, it’s not wise to let go of those pulling you out.

And – in this gathering – let me add one final thought. We cannot leave everything to Government.

Here, tonight, are representatives of many leading companies. You care about our country, too. You have a stake in its success. And you have the power – and, I would argue, a moral responsibility – to work towards the future wellbeing, not only of your workforce and shareholders, but of our nation as a whole.

In the North, South, East and West we need growth. To provide jobs. To yield taxes. To build prosperity. To offer hope and opportunity to those who do not, at present, have it.

This requires a unity of purpose. A national unity – in the national interest. And, in that, we all have a part to play.