Category: Prime Minister (1990-1997)

Below is the text of Mr Major’s speech, made in Manchester on Friday 23rd April 1993.

PRIME MINISTER:

My Lord Mayor, Mr President, Ladies and Gentlemen. I would like first, Gill, to thank you for your budget submissions, a little early perhaps but I will take very careful note of them. A curious fact, Gill, very curious, I noticed it particularly when you were speaking, but when I was in Wales they asked me for an airport like Manchester’s.

Can I say, firstly, how delighted I am to be back here in Manchester. It is always a delight to escape from the hot house of Westminster and see what is happening in the real world, so it is a great pleasure to be back here today. Two hundred and fifty years ago, Daniel Defoe called Manchester “the greatest village in the country”. No longer true of course. Today Manchester is no longer a village but one of the great cities of Europe. And I say that this evening not as a politician’s wholesale civility but this is the city of wholesale English commerce, and you should be proud of it. This is Brindley and Crompton country where faster transport set an eight-fold increase in yarn and cloth production and together that did spark the industrial revolution and sold shirts to the world.

But what over the years has made it from a village to a great city? I think the answer to that is quite clear. Because leading, and not following, Manchester has changed with the times. Today we all face a similar challenge, as Bob Dylan sang many years ago in my youth – the times they are a changing. They are certainly changing now, rapidly perhaps, more rapidly in this decade than any decade, even the most venerable amongst us can remember in their long life. In our interests, our cold self-interest, we must make sure in this country that we lead that change and lead it fast. Captive markets for our goods around the world no longer exist, the captive market these days is an inscription upon our headstone. And the Lordly assumption that somehow it is a privilege to buy from the British has passed into history.

The world has changed. Japan and the countries of the Pacific Rim are giant manufacturing powers. China is set increasingly in the decades ahead to become a huge industrial power. That is the competition that we need to face in this country in the future. That is the competition, so let us not flinch, let us not fear, our job is quite simple and quite clear [inaudible] and train and prepare and export and beat that competition for our own domestic prosperity in the rest of the ’90s and in the new century.

So we do not need to make the mistake, and dare not make the mistake, of falling for the alternative to complacency, that British gift for graceful despair. In this country we can compete brilliantly and we are now well placed to win in the world’s market places.

Just contemplate, just step back for a moment from the painful necessities of the last two years and consider the position today and just listen, please, to the scores that Britain chalks up and that you do not hear often enough. we have inflation below 2 percent, better than most of the European Community and better than most of the G7. We have a highly competitive exchange rate. We have interest rates, the lowest in the European Community and the lowest for 15 years.

We have not seen that combination of remarkable trading circumstances for nearly 40 years. And I believe that industry and commerce have recognised that reality better than many others. Manufacturing output is up, investment is up, productivity is rising fast, you have kept wage costs competitive and we have sought to do that in the public sector as well, doing better than Germany or Japan and better than at any time for a generation.

And as the Chancellor said earlier this week, Britain is set for 2 years of solid growth, growth that will be the faster in the European Community big league. As we meet here this evening, after what I know have been difficult circumstances for some time, we have every reason to be confident about our future economic prospects.

We said two years ago that low inflation would bring recovery. We have brought inflation down, recovery is now following, as we said that it would. Yesterday’s news that unemployment has fallen, fallen for the second month running, is very welcome news, welcome that it has fallen in every region, welcome for the 50,000 people that Britain has now put back to work this year. More businesses are beginning to take people on again and job vacancies are rising. All that can only add to confidence.

That recovery will benefit every bit of Manchester’s increasingly broad-based economy, a diversified, a diversified and successful base that is well represented in the attendance here this evening. Your region’s service sector is vital to the nation as a whole. And as an employer your financial and business services alone provide work for nearly a quarter of a million people, indeed even more now that Mercury is bringing an extra 500 jobs.

And Manchester is the student capital of Britain, leading the way in the sciences and technologies that we will need for tomorrow. Three universities, a world renowned business school, UMIST, you name it, you have got it here in Manchester.

That is not just an investment for the future. Education is a key part of the service economy of today, a service economy that is also showing its paces abroad. The North-West Chambers show that service exports have sharply improved over the last quarter. Good, good, but if the recovery is to last and prosperity to grow, we have to win and continue to win right across the market place in the service sector and beyond the service sector. Because vital though services are to our prosperity, we cannot depend on services alone, we need a vibrant, thriving, manufacturing base and I hope every part of this country will recognise that for the future.

So, Mr President, I hope our friends in the service sector this evening will forgive me if I turn from them to manufacturing because I want to say this evening a few words about the importance of manufacturing and just a bit about our export success. And where better than here, in Manchester, in this hotel where Mr Rolls met Mr Royce in 1904. We British have done something typically British and wholly remarkable, we have managed a fanfare without trumpets. We are exporting more now than at any time in our history. But in the export markets how do operate? We operate like Jeeves, we just shimmer silently, export discreetly, we do not tell anyone, it might give offence. Well I think we should tell people about our successes in taking export markets right the way across the world, it is about time the British beat the drum for British successes and let know what we are doing right.

Ask people around the world – who are the great exporters? And they will speak with respect and admiration of Japan. That is right, they are a great exporting nation, the Japanese. But what about us? We British export 400 pounds per person per year more than the Japanese – 1,800 pounds for every man, woman and child, compared with 1,400 pounds for the Japanese.

What are we to do with the Gordon Glooms who always say that British industry is crumbling? I think people should listen. In financial services, pharmaceuticals, chemicals, the water industry, power generation, areas of food processing, the drink industry, garments, aerospace, defence equipment, the oil and gas industry, mining equipment, bio-technology and international construction, we lead the pack in this country and we should continue to take that message right the way around the world.

British companies are big companies, powerful companies, successful companies. British companies account for ten out of the top European twenty companies by profitability, and eleven out of the top twenty by size. And although the trade gap is wide, we are seriously engaging with the competition. We export televisions to Germany, lace to Brussels, cosmetics to the French, cars to Japan and with a brass neck that would have delighted Richard Arkwright, we now sell pizzas to Italy. One day will speak of Salford as the world’s centre of pizzas – Italians will never speak to me again.

The balance of trade in the motor industry will be revolutionised over the next few years, in partnership of course, rightly in partnership joining and beating.

But what of the future? Well I am a fairly tolerant soul. But I will tell you one thing I do not like, I do not like to see British manufacturers retreating from the field. The British car industry has turned retreat into triumph, other industries can do the same.

And why is it that so many people seem to have such a low view of manufacturing? I think part of that view comes from the out-dated image of manufacturing as an employer of large numbers of unskilled people in sprawling plants doing heavy manual work, the ancient mythical world of the cloggit and thump brass hammerworks. That is not a low view of manufacturing, it is a total misunderstanding of modern day manufacturing. Reality, manufacturing reality, is more like the British Aerospace works I saw today, or the factory just 30 miles from Manchester I saw the last time I was here, a factory spinning optical fibres, modern expanding, sharp, the biggest producer outside America and selling right the way across the world.

These are great symbols, but we want more than symbols, we want fast reader replication and we want it now in ever increasing numbers. And improving competitiveness is the key to expanding our manufacturing base. We know that when we have manufactured we can sell. As recovery picks up we must make sure there are more and more British goods for customers to buy of the quality and the price that they want to buy, available at the time that they want to buy it.

There is, I have to say to you, a danger that nags in my mind time and time again, it is always there waiting. Time and time again since the war exports have gone up in recession but when the recovery came companies abandon the export drive for the warm debilitating huddle of the home market. Well that must not happen this time, in our own interests we must not permit that to happen again. We are determined to build up our export success and that is why in the Autumn Statement and the Budget the Chancellor increased export credits and cut its cost to business. You keep exporting and we will keep supporting and between us we will bring prosperity to this country.

Success requires continuous effort, continuous improvement, we cannot let up. Manchester I think knows something of this: the fourth-generation mill-owners who bought shooting estates, lived in Surrey and wouldn’t replace old machinery; the soft and selfish gentlemen manufacturers – they very nearly destroyed Lancashire for you. Let us remember them in order not to be like them in future. “Change not decay” must be our creed.

Let me make it clear beyond any doubt whatsoever that I believe the Government has a duty to work with industry to help industry to meet that challenge, not Whitehall picking winners. the winners picking themselves and Government helping them heart and soul.

Everything we do has to be supportive of you. We want less of a tax burden on the profits that you need for investment. That is why we are pressing down on public expenditure; it is why we have to give priority within that spending to infrastructure projects which spell business. Manchester’s own Metrolink that Gill mentioned earlier is a very real example, so is the Channel rail link, so is the Forth Crossing in Edinburgh. That is why we are seeking to reform education. That is what tests in schools are all about, to find out what the children know and what the children don’t know because we need to know what they don’t know so that we can teach them what they should know. They deserve the best, they need the tests; you need the best working for you and the vital importance of our education system cannot be overstated. [Applause]. That is why we are doing more than ever before for good vocational training to give our youngsters the best possible start in the best possible jobs, a recipe for the best possible success for Britain. It is why science these days is a Cabinet job and why we are overhauling what we do on science and innovation to ensure Britain’s effort and brain power backs industrial success.

It is why in the budget we have given extra help to Britain’s exporters; it is why we have cut businesses’ rate burden and cut Advance Corporation Tax to boost businesses’ cash flow by £2 billion a year and when we have winners we support them everywhere. I did it recently in India and the Gulf. British firms had done the work, Government helped unlock the contracts. £5 billion of orders and 20,000 jobs safeguarded for years to come.

I saw the fruits of that partnership earlier today when I met the Gulf Tornado builders at British Aerospace. I and my colleagues will give that backing, so must each and every British embassy around the world. Graceful manners and an elegant understanding are surprisingly well-suited to the indispensable arts of trade. Let them by all means pour out the gin and tonics but then let them sell both bottles to the opposition [Applause].

Winning back lost markets is the only long-term policy for British industry and for the whole economy and manufacturing is the soldier in the front line of that struggle.

Mr. President, you touched delicately upon the point – a number of points as I recall but certainly this one: over recent months there has been a tiny frisson of controversy over our European policy. [Laughter]. Let me set out my position clearly.

Commercial success starts on our own doorstep and our doorstep is Europe. When Europe walks, it walks in shoes exported from Manchester. The new rail terminus at Charles de Gaulle Airport is work done in Bolton. The cocktail chatter is that the Government is too obsessed with Maastricht when we should be concentrating on jobs. In what world are those cocktail chatterers living? Jobs and sales are what being in the heart of Europe is all about for our future. [Applause]

What made possible the vast expansion in small and medium-sized businesses and new jobs in the 1980s? Where did they find their main export markets? Overwhelmingly in Europe. An example not far from here: a Leyland company went into Europe a few years back with one Chesterfield in the back of an estate car; in the Single Market it now does a million pounds of business.

Have your reservations by all means. No-one says that Europe is perfect but that story tells why we are there. Since we joined, our exports to it have grown nearly 50 percent faster than have those of our own EFTA partners. That is almost £20 billion last year, twenty export billion poundsworth of jobs. No wonder the Scandinavians and the Austrians wish to join the Community! What an irony that a nation which sought trade when Tuscan merchants brought wool in the Cotswolds in 1370 should contemplate holding back from the richest free trade market of all time.

I believe that the Chambers of Commerce understand the importance of Europe to Britain’s trading strategy and of the Maastricht process to that strategy. The President of your Association, Christopher Stewart-Smith, who is here this evening, wrote to me recently specifically to support what we are doing. Let me quote from his letter. He wrote as follows:

“Those who suggest we have gone far enough with the Single European Act are making a mistake that British business cannot afford. Businesses do not want to see the clock turned back nor would they welcome the reintroduction of new non-tariff barriers. Britain needs the commitment to subsidiarity to avoid unnecessary interference in domestic issues.”

That, Christopher, is it smack between the eyes, a bull’s-eye beyond a doubt! That is the message that business should give to doubters about our commitment to Europe. Maastricht opens the way to the sort of Community that we want to see. Taking that essential step away from centralisation, we gain the benefits of the Single Market without the drawbacks and at the end of the inky labyrinth of treaty subclauses is a trading Europe. Especially here in Manchester that is important to us, a trading Europe in which we can send our exports in the future.

Yesterday in the House of Commons, we finished the Committee Stage of the Maastricht Bill. Let us now finish the Bill and get on with the job of building prosperity for Britain in Europe and put these squabbles behind us. [Applause].

Mr. President, here this evening perhaps I will be permitted to say just a word about the Chambers of Commerce movement. It is already helping its members with Maastricht but I think it can do more. I would welcome a bigger billing for the Chambers. It can only help the businessmen to swap ideas and learn from each other. I would like in the future to see Government develop the same relationship with the Chambers that it has developed with the CBI. The one-stop initiative is a tangible sign and naturally Manchester has won the bid to be one of the pilots of this new and I believe utterly worthwhile initiative.

Here in Manchester this evening there is perhaps one other issue that commands me like a referee’s whistle – the City’s bid for the Olympics. Manchester’s bid goes beyond pleasing discus fanciers. Building the Olympic facilities and hosting the Games should generate £4 billion of new spending in the region and make 11,000 jobs but better yet, it will be a shop window beyond dreams. The world would see what North-West England has to offer. Manchester is already eighth in the European league of best cities in which to locate a business but it can move up. I know and everyone here knows – and Gill mentioned it to me earlier – that Manchester has ambitions to be top of the league so the Government is shouting and finessing for Manchester’s bid. We have put up £75 million for the bid and for the initial construction programme. That starts with the Olympic arena and the National Cycling Centre. We are providing some £40 million funding towards the regeneration of East Manchester this year and we are backing Manchester’s bid by ensuring that all the necessary facilities can be built. A state-of-the-art Olympics for the start of the new millennium. Where better than here in Britain and here in Manchester? [Applause]

I am honoured to play my part together with Craig Readie of the BOA and Bob Scott who I must tell you though I think you already know it have done wonderful things for Manchester’s bid in the last year or so. [Applause]. When Bob comes up and grabs me warmly by the throat [Laughter], I have this instinct of what he is going to say to me and that instinct has never been wrong! Together with Craig Readie and Bob Scott, I pressed the case to the President of the IOC just a couple of weeks ago. No-one can be sure what lies in the minds of the members of the IOC when they vote to decide the location but because of what has already been done Manchester is now one of three hot favourites. Beijing and Sydney will make their pitch but nothing that can be done for Manchester will be left undone in the quest to bring the Olympics here at the start of the new millennium. [Applause].

This bid and the great works that accompany it are just one sign that Manchester has kept all its flair. Much of the rest of the world may still be going into recession; we are coming out of the recession and we have the edge – low inflation, rising competitiveness. We need the Manchester touch for the great things which are pending. It was Manchester which took raw cotton from Smyrna, sold it to the fast bobbin men in Oldham and the power loom men in Preston. Then it sold cheap cotton cloth to the world. Manchester knew what needed be done then; it knows what must be done now. So does the Government. Together I hope. Perhaps in Manchester I shouldn’t say “together” but “united” [Applause] and to be strictly fair let me put it a slight different way: in this city [Applause] united we can do it. [Applause].