Mr Major’s Joint Press Briefing with Ian Lang – 12 January 1997
Below is the text of Mr Major’s joint press briefing with the President of the Board of Trade, Ian Lang, made en route to Islamabad on Sunday 12th January 1997.
PRIME MINISTER:
I thought before we talked about Pakistan you just might like to hear what Ian has been doing over the past 24 hours and of the contracts that you don’t yet know about that have been signed since we came here.
MR LANG:
We had a very good positive visit to Delhi. The businessmen, some of them pursued their individual contacts, others took part in seminars. I was at the British Council opening a new Business Management Centre for remote learning involving Strathclyde University and Durham University. That is going extremely well, they are getting a large number of applications from Indians to take part. I also opened a new English language remote learning centre which is also going well.
I witnessed a number of further signings and it might be helpful to you to know that we really have built up quite a list of signings and contracts during this visit. It wasn’t what the visit was about, but it does illustrate how business is going on all the time in India. And when we talk about the rise in exports having almost doubled in 4 years, and how investment has risen by 50 percent in the same period and now stands at 3 billion pounds – the biggest outward investor in India – it is when you see the day-to-day deals that are being struck that that takes on more reality.
You have seen details of some Of these already; Bays deal, a 22.5 percent stake in Bharti Cellular Limited; GEC-Alston, a gas turbine project, 110 megawatts with the Usher Group; also with the Usher Group a dedicated computer software centre; the 600 Group, a major machine tool manufacturer, has signed a 4 million pounds contract with Mysore Kerloska [phon] Company to manufacture components for machinery; Rolls Royce Subsidiary has signed a deal with SSB in Bangalore to make high voltage insulators; BCC is expanding substantially in its plants around India; Richard Ellis has done a property development, the biggest in India, to build new housing in Delhi where there was previous industrial activity; and HSBC’s new office, which I opened last night in Delhi, is going to be the basis for its new corporate finance company. Those are all worthwhile deals, none of them are megadeals, but cumulatively they add up to substantial business, and there was an enormously positive response to the business delegation throughout the trip to Delhi and I hope that gives you some flavour of the sort of things that are going on.
PRIME MINISTER:
That really just adds to what you heard earlier about India. When Ian made the point that that was not what we were here for, we were looking for much longer term trends, this is work in progress as it turns out, picked up during the course of this particular visit.
Let me turn minds forward to Islamabad and what we are going to be doing in the next couple of days. The reason for visiting Pakistan is pretty much the same as the reason for visiting India. We have got a very substantial trade flow with Pakistan. I think the trade balance is actually quite narrow, but I think they sell slightly more to us than we do at the moment in terms of normal everyday trade.
What has been very startling has been the growth of UK investment in Pakistan over the past three years or so. We are now very marginally behind the United States as the largest investor in Pakistan. It is overwhelmingly likely that we will comfortably pass them this year. Our capital investment in Pakistan has pretty much quadrupled in the last three years and is on a very sharply rising trend.
Again, if I could emphasise the point, we see this as very much a long term endeavour to build up interest in Pakistan rather than any contracts that may emerge in the immediate future.
The possibilities for Pakistan we think are very substantial, we think that is true in a number of very mega contracts. There are some contracts where agreements in principle have been reached but finance agreement hasn’t been reached and the financial deal hasn’t actually been closed, and I am sure Ian could give you more details of those later privately if you wished.
Beyond that, we are going to the Afghanistan border tomorrow. There is a very good reason for that. A very large part of the drugs trade which affects Western Europe actually comes down that route and I want some clear briefing on what is actually being done to inhibit that drugs trade and to examine what we, the British, can do to help, and also what we, the Europeans, can do to try and cut down on the amount of that drugs movement. It is a very serious drugs route indeed and I think it will be intriguing to see exactly what is going to happen.
I know political times are exciting in Pakistan and neither Ian nor I propose to get involved in domestic Pakistani politics. You may well ask, I can’t inhibit your questions, but I don’t propose to get involved in the details of that. We are expecting the elections to take place on 3 February. We think all the mainstream political figures will be candidates in that election. We look forward to the return of a democratically elected government in Pakistan.
One issue I will raise while I am here with the principal figures I meet in Pakistan is the Kashmiri kidnap. Mr Wells and Mr Mangan have now been missing with two others – three others originally, but you will recall a Norwegian was found murdered they have been missing for 18 months. The last certain information about them was the end of 1985. A great deal of work continues and I will raise yet again our interest in finding out exactly what is, or was, the fate of those four people who were kidnapped.
So that covers broadly the agenda, a very strong trade balance. I would expect to see Benazir Bhutto and Nawaz Sharif and the President and the Prime Minister and it may well be other prominent figures will arrive at our reception tomorrow night, or at the Prime Minister’s dinner tonight.
QUESTIONS AND ANSWERS
QUESTION:
Yesterday you were quite critical of Western European nations for not doing enough to open their markets for developing countries to help lift people out of poverty. Could you elaborate a little bit on that? Also, do you see the single currency as something which would create a fortress Europe, which would take them further along that path?
PRIME MINISTER:
I don’t think a single currency would make any difference. The reality is that Western Europe has been quite slow to open some of its markets. It is moving in the right direction but it isn’t moving fast enough. And the point I have made before I will reiterate again. It is an oddity to provide aid to countries on one hand, while on the other hand you fail to give them something they need every bit as much, and that is access to Western markets. So we very much believe that open markets and free trade are in everyone’s interest. They are never entirely a pain-free option, don’t let me suggest that they are, but it increases the sum amount of trade. And I think if you see some of the poorer nations of the world and you look at their prospects for becoming self-dependent, well they are not going to become self-dependent if they cannot export what they have to export freely into Western markets. If we are serious about helping them then we have to accept that markets must progressively be freed, and that is what we would like to do. I don’t think the impact of a single currency would have any difference either way.
MR LANG:
Can I just add that we pressed hard at the WTO Conference in Singapore to adopt the initiative of Director, General Rugeiro of the WTO. We gave a lead on this within Europe. We believe it is the best way of helping poor countries to improve their conditions.
QUESTION:
The Americans at one stage recently suspended aid to Pakistan because they believed that Pakistan was seeking to acquire materials to become a nuclear power, Do you have any worries about Pakistan’s ambitions in this direction and if you found hard evidence of Pakistan attempting to acquire such materials, would you consider suspending British aid at any stage?
PRIME MINISTER:
I think we would consider what action if and when we had hard evidence. But we are certainly very keen to see Pakistan and India, and China for that matter, sign the Comprehensive Test Ban Treaty. That has been an objective of policy for some time. Each of the nations is unwilling to do so because they foresee difficulties, if they do so, without the others doing so also and so that is pretty much left in stalemate. But clearly I think it is desirable, on economic as well as political grounds, for action to be taken to make sure there are no more nuclear weapons in this part of the world.
QUESTION:
You have mentioned the substantial list of contracts that have been signed both in India and which expect to be signed tomorrow. As a result of this trip do you expect some even more substantial contracts to be signed both with India and Pakistan by UK companies over the next few months, can you give any indications of that?
MR LANG:
Yes I do and I know of one or two that are in negotiation, but because they are in negotiation they are confidential at this stage. But I would expect that in addition to those that are being negotiated, the high profile that has been given to this delegation’s visit within India, and the very positive reception arising from Prime Minister Gowda’s involvement as well, will lead to a further flow of business. Certainly the Indian press have been positive and the businessmen that we have met have been very positive.
QUESTION:
It has been suggested today that Labour’s windfall tax is illegal. Do you believe that Labour’s windfall tax is illegal?
PRIME MINISTER
I don’t really want to get involved in domestic matters until I get back.
QUESTION:
Would you anticipate at all, so far as the north-west frontier is concerned, making representations at the European Union if you thought it was necessary to make a greater commitment so far as choking off the drug supply there?
PRIME MINISTER:
Absolutely. We have produced a number of initiatives, some of them with the French, some of them with the Germans, to deal with the problem of drugs at a European Union level. For example, the initiative to cut off the Latin American route at the Eastern Caribbean by providing more resources, providing ships to cut off and providing extra resources for policing. And most certainly I will report back to our European partners on what we discover on this occasion. Because these are drug routes that come to Western Europe, not just to Britain, and we have seen the drug problem in some parts of the world, it is very important that Western Europe acts early and decisively to cut off the drugs route whenever it can. So the answer to your question is unequivocally yes.
QUESTION:
Will there be a financial commitment?
PRIME MINISTER:
Maybe, maybe financial, maybe help with policing, maybe a range of things, maybe extra action within Western Europe to stop it coming in. It could be any or all of these things. But by and large you need to take action at source, either at source or on the route of the drug trade, and I think that is the sort of thing I would be likely to report back to them. And I would expect to have a ready and willing hearing for that message.
QUESTION:
You talked a moment ago about access to Western markets, but drugs are one thing which do have an access to Western markets and ready buyers. How does one compensate the kind of people who are very poor, who grow many of these drugs, in terms of aid and give them an alternative livelihood, as the Americans have tried to do in South America?
PRIME MINISTER:
I think the majority of the money doesn’t actually go to them so the compensation really would be in terms of providing alternative sources of employment and alternative investment and that is something I think we would have to look at across Western Europe and in North America. For example, if I could go back to the Caribbean exercise, the drugs that come from Latin America to the Eastern Caribbean then go in two directions: they go northwards to the United States and they then go westwards to Western Europe. So I think there is scope. You are quite right, you need to deal with the primary source as well, though I don’t think we are in the direction of redirecting our aid budget for example into Afghanistan. I wouldn’t wish to hold out that that was a policy that we had in mind. But collectively I think Western Europe and the United States would be looking to see what could be done in terms of trade and other things to deal with the problems in the countries of primary supply. They are growing the poppies or whatever, but it is the people who buy them and traffic in them that are really making the money.
QUESTION:
You were talking yesterday about the way in which Western countries block off trading options to developing countries. Do you feel in terms of your aims and flexibility within the EU, the broader question of flexibility within the EU, that you are anywhere nearer to seeing a way through the disputes?
PRIME MINISTER:
I don’t think what I have in mind in flexibility would make a great deal of difference to that particular problem. What we need to do is to try and persuade the European Union as a whole not to be quite so restrictive in some areas and I think that will progressively happen, the question is how rapidly it happens. The big problem of course is agriculture but it is by no means the only one.
QUESTION:
Do you feel you are any closer on flexibility?
PRIME MINISTER:
Yes I do. Flexibility isn’t a new invention as far as I am concerned. I spoke of the necessity of flexibility in the William and Mary Lecture over 2 years ago now and I have no doubt that it is inevitable that the European Union cannot continue in its present form. At its membership grows, it will have to be more flexible. Now the great debate is how flexible will it be and what sort of flexibility will it mean, and that is where the debate is concentrating at the moment. But I think I will be able to make progress on that, yes.
QUESTION:
Before Amsterdam?
PRIME MINISTER:
I doubt the progress will be finalised until Amsterdam. It is likely, as it was at Maastricht, all to come together in the end game I would guess. So we may make some progress beforehand but I think it will only be enshrined in treaty form when the Heads of Government meet at Amsterdam.
QUESTION:
When you are being even-handed with the political leaders, will you also be expressing any concern about the increased role of the army in Pakistani politics and the threat that that might pose to democracy?
PRIME MINISTER:
I think what I will be saying is that I look forward to the elections and a return to democratically elected government. We have said that before, there is nothing new in that, and I would expect to reiterate that in my private discussions over the next few days, yes.
QUESTION:
You said that you expect to see some progress on flexibility, and I realise that you are not going to reveal your negotiating hand, but does that mean any suggestion that we could accept the German position which is that they could go ahead with flexibility against our wishes, or is that enshrined in stone?
PRIME MINISTER:
No it does not mean that. I don’t think flexibility against the wishes of member states, that is not the flexibility I have in my mind.
QUESTION:
Presumably you have got to wade through the flexibility minefield if you like, have you got a way of unlocking this particular problem?
PRIME MINISTER:
Yes I can see a way of unlocking it. We still, have to negotiate our way through, but I can see now how it can be done and I will endeavour to ensure that it is done in the discussions over the next few months. Rut we have to agree not just with the Presidency, we have to agree with other members, and that is why I think it is very unlikely to be finalised until we finish the treaty negotiations hopefully in Amsterdam.
QUESTION:
On the drugs matter, again the Americans put a lot of effort into saying that you have to tackle the problem at the end, not of supply but of demand, and penalties in the United States have been raised to swingeing levels. Is this an instance where the customer is always wrong and if so are UK penalties what they should be?
PRIME MINISTER:
Penalties for the drug user or the drug supplier?
QUESTION:
Drug user.
PRIME MINISTER:
I think the view we have taken all the way through, both in terms of soft drugs and hard drugs, is that we need to take a very firm hand. I don’t in any way favour the legalisation of soft drugs.
Some people do, I think that is profoundly mistaken as policy. Most of the people who move on to hard drugs graduate to hard drugs through using soft drugs. I don’t know what the current. statistics are but I remember at one stage there were said to be over 90 percent of the people, 95 I think was the figure I saw some years ago, of people who took hard drugs graduated to hard drugs through the on-trade system of using soft drugs. So I think we have to be pretty tough on both. And as far as the drug supplier is concerned, we have increased penalties for that and I think it is entirely right that we should do so. It is a particularly evil and pernicious trade.
QUESTION:
On flexibility, is your proposal along the lines of that put by Wim Kok in your talks at the beginning of last week? Do you have the Dutch Presidency backing yet for your own proposal on this?
PRIME MINISTER:
The Dutch Presidency will hold the ring, they won’t take a line in favour of our position or against it I don’t think. There are many shades of flexibility and I don’t propose to go into my negotiating position, I don’t think it would be prudent to do so. But I would simply make the general points which I think I will have to ask you to rest on. The European Union is becoming more flexible. Some people aren’t members of Schengen, some people have opt-outs on monetary union, some people have opt-outs on social affairs. That is going to accelerate in future, it is going to accelerate as the European Union enlarges and as we see it accelerate I think there is greater scope for countries taking part in those aspects of European Union activity that are in its own interest, and not being dragged into parts of European Union activity that are unpalatable to it. Now that is not a message that will be very easy for all our European partners to swallow, but it is the only way the European Union is going to be able to develop in the years ahead. It cannot develop with 15, 16, 20, 25 members all going ahead in the same way at the same time.
But if you will forgive me, Phil, I don’t propose to go into details.
QUESTION:
You and your opponents in the British general election will exploit every opportunity you get over the coming weeks with an election coming, quite naturally. Are you worried that Pakistan’s politicians will attempt to use your visit to their own purposes?
PRIME MINISTER:
I think that is a good reason for making sure I see each of the leaders of the main parties who have asked to see me, and I shall do so and I shall not enter into any views on their internal election.
QUESTION:
Do you see what you are doing in Europe as a renegotiation of British membership?
PRIME MINISTER:
The IGC is a renegotiation, it is semantic to call it .a renegotiation or not. But if you are negotiating and you are renegotiating some things that exist already, as for example the position of the Commission and the size of the Commission, it is simply a matter of factual accuracy to call it a renegotiation. The trouble is that these terms, they become a term of art to mean things other than they really mean. This is a renegotiation because some things that exist are being renegotiated. It isn’t a renegotiation in the sense that all parts of the acquis are being torn up and thrown away.
QUESTION:
But presumably what you are doing on flexibility is quite a big thing, that is quite a fundamental step?
PRIME MINISTER:
That is a new negotiation rather than a renegotiation, but yes it is a big thing.