The Rt. Hon. Sir John Major KG CH

Category: Prime Minister (1990-1997)

  • Mr Major’s Commons Statement Following Ejection from the ERM – 24 September 1992

    Below is the text of Mr Major’s statement to the House of Commons on 24th September 1992 following ejection from the ERM.

    PRIME MINISTER:

    I beg to move,

    That this House expresses its support for the economic policy of Her Majesty’s Government.

    Following the developments in the foreign exchange markets over the past weeks, I thought it right to recall Parliament to debate the present position. The essential conditions for Britain’s economic success are low inflation, low taxes, free trade and freedom from excessive state interference. I am happy to reaffirm those principles today. The Government stand for a low-inflation, low-tax economy–and so, I believe, do the British people. That is why, five months ago, they made their choice and we sit here and the Labour party sits on the Opposition Benches.

    We joined the exchange rate mechanism in 1990 to help to bring down the rate of inflation in this country. British industry supported us in that decision; indeed, it urged us to join believing that, on balance, it would help to stabilise exchange rates, bring down inflation and bring down interest rates from the high British level, which then applied, to the much lower European levels. Of course, during the period of our membership, interest rates fell from 15 to 10 per cent.

    I congratulate industry on its magnificent response in the battle against inflation. I know that it has not been easy, but, against a difficult background, exports have risen to record levels, costs have been controlled and productivity has soared. It was not just industry which supported entry into the ERM–so did commerce, the City, most trade unions, the TUC and the Opposition parties in this House. The Leader of the Opposition, whom I warmly welcome to his new responsibilities, was consistent in his support of the exchange rate mechanism. When we joined it, the right hon. and learned Gentleman supported us, and agreed. When I announced the exchange rate central figure the right hon. and learned Gentleman was generous enough to agree. When, last week, I said that we needed reforms because of the fault lines that had become apparent, the right hon. and learned Gentleman agreed that reform was needed. I congratulate him on his consistency, even though on this issue the House has been not just a debating Chamber but an echo chamber.

    Now, of course, we hear most loudly from those people who were critics of the exchange rate mechanism. They come from all sides and every party. My right hon. Friend Lord Tebbit, I understand, says that the Government were, I think the expression is, “dragged in” by the then Chancellor. Now we all know my right hon. Friend Lord Tebbit. He is an old friend to us all. I admire him as a man of great courage, a fighter, a bruiser. He likes to bite your ankles, even if you are not walking up his pathway. Yet even my right hon. Friend Lord Tebbit lost many battles with my formidable predecessor. Despite this, according to Lord Tebbit, even my formidable predecessor, whose convictions and firmness of purpose are everywhere admired, was somehow dragged into the exchange rate mechanism by her new Chancellor. Ah, yes, I remember it well.

    Since we joined the exchange rate mechanism we have brought inflation, which was rising to 11 per cent., down to nearly 3.5 per cent., and falling. That is an achievement for which my right hon. Friend the Chancellor of the Exchequer deserves to be warmly congratulated, so let me do so and let me say this : I take full responsibility for the actions and policies of my Chancellor. In the exceptional circumstances of last week, we were obliged to suspend our membership of the exchange rate mechanism. In the circumstances, there was no choice. No mechanism could have survived the market’s attack on the scale that occurred last Wednesday. One after another–not just sterling–the currencies of Europe came under fire. We need to see that against the background of events world wide : a referendum in France, whose outcome was in doubt, and great economic difficulties in Germany where interest rate levels were at their highest level for a decade. Those strains were increased by a slowdown across Europe and the falling exchange rate of the dollar. That speculative attack turned first to the lira, which was forced to devalue and subsequently to step outside the exchange rate mechanism.

    It created havoc beyond the exchange rate mechanism–in the Scandinavian countries, where overnight interest rates in Sweden touched 500 per cent. The market, encouraged by injudicious comments about realignment which should never have been made, then turned on sterling. In such circumstances, there could be only one response : to defend the pound with foreign exchange reserves and then to raise interest rates. That is what we did, but the severity of the attack compelled us to leave the mechanism. Other currencies, too, have come under attack and suffered varying degrees of damage. I do not wish to understate the consequences of this event.

    Let me turn first to the exchange rate mechanism itself. I do not see that we could readily return to the mechanism without dealing with the problems that have been thrown up in the past fortnight. These need careful examination and consideration before we can decide whether such a mechanism can be made to work to the benefit of all its members. Some fundamentalists say that it cannot. Other fundamentalists say we should pop straight back in.

    Let me say bluntly to the House that I have no intention of being bound to either course without a proper examination of where future British interests lie. My expectation is that co-operation is a better way, if it can be seen to be adequate, and no one should doubt that we will examine carefully whether a reformed mechanism can be made to work. But I do not believe that we shall be able to go back into the mechanism soon, or into the same mechanism that we left last week. My right hon. Friend the Chancellor of the Exchequer has already made our criticisms very clear to other European Finance Ministers, and I will be doing so at the European summit next month. But inside or outside the exchange rate mechanism, the Government’s economic policy must retain the same objectives. Our ambitions to bring inflation down steadily but surely during the lifetime of this Parliament were spelled out in the last Budget, and that remains our strategy. Thus far, our anti-inflation strategy has succeeded more spectacularly than anyone in the Opposition ever believed possible. Outside the exchange rate mechanism, the conduct of monetary policy cannot, indeed should not, be exactly the same. We must have regard to a range of indicators of monetary conditions to make sure that our objectives on inflation in particular are not at risk. These will include our existing narrow money target, the behaviour of broad money and asset prices and, of course, the exchange rate. Nobody should believe that a floating exchange rate is a free meal, always allowing interest rates to fall to a very low level.

    Mr. Alex Salmond (Banff and Buchan) : The Prime Minister spoke about fault lines in the exchange rate mechanism. When did he first discover them? Did his Chancellor, who we now understand is a long-term sceptic of the ERM, ever inform the Prime Minister of his doubts, and if so, when?

    The Prime Minister : The speculative attack on sterling was of a size and scale that we have not seen for beyond a quarter of a century. I do not believe that any mechanism would have been able to withstand the size and scale of that. But I believe that there are other areas within the exchange rate mechanism where reform could have made it a more credible instrument for use last week. We shall discuss that with our European partners and others.

    Mr. Stuart Bell (Middlesbrough) rose —

    The Prime Minister : I shall give way later.

    Interest rates elsewhere in Europe have been driven up this summer, particularly by the strains in Germany.

    Indeed, in the last 10 days of turbulence in the mechanism, interest rates have risen in Greece, Italy, Sweden and France. In Spain they have not only devalued but have effectively reintroduced exchange controls. Ireland, too, this morning reintroduced exchange controls. Since we stood aside from that turbulence, it has been possible to reduce base rates by a full percentage point this week, and the benefit to business and to home owners will help strengthen economic recovery.

    But interest rates alone will not achieve the non-inflationary growth that we need in this country, and that point needs to be understood. That depends even more crucially on keeping firm control of public expenditure. The Government’s new system of control will allow money to be directed towards priorities, while we keep strictly within the overall limits laid down for the growth of public expenditure as a whole.

    In essence, the Government have set an upper limit to expenditure and will divide resources between priorities in the public expenditure round. That contrasts with the previous system of individual bids that were added up at the end of individual negotiations. It is a fundamentally different system of controlling public expenditure. It is tough and will be tough, but it is necessary and is an important component part of overall economic strategy.

    Mr. Stuart Randall (Kingston upon Hull, West) : Will the Prime Minister give the House some idea of the likely time scale for reforming the exchange rate mechanism? Will it be Christmas or in three of four years’ time?

    The Prime Minister : Reform self-evidently depends on negotiation with all the other members of the mechanism. At this stage, nobody can say how long that will take. As I said a few moments ago, given the turbulence that has existed–not least the money supply figures announced in Germany yesterday–I would not expect our return to any mechanism, and certainly not the same mechanism, to be in the near future. I do not believe that that will be practicable, and I must make that clear.

    Mr. Tony Benn (Chesterfield) : The Prime Minister is speaking as President of the European Council, not just as Prime Minister of Great Britain. He has repeatedly told us that his object is that we should be at the heart of Europe. Will he please explain how allowing speculators to determine our currency, German banks to determine our interest rates and French voters to determine the future of the Maastricht treaty puts this country at the heart of Europe? Is it not clear that the British, like the Danish, Irish and French, are entitled to determine what is essentially a political matter, although in a debate dressed up as an economic debate?

    The Prime Minister : I will turn directly to the question of Britain’s place in Europe in detail in a few moments. On the question of speculation, it is certainly within the memory of the right hon. Gentleman that, whether inside the mechanism or outside, inside the European Community or outside, sterling has been subjected to speculative attacks on many occasions in the past. The exchange rate mechanism offered an extra line of defence, although not a complete defence; as we have seen, and as we have always known, there could be no total and complete defence.

    Sir Teddy Taylor (Southend, East) : To avoid any possible misunderstanding, will the Prime Minister say whether it is the Government’s intention to seek to rejoin a fixed exchange rate system?

    The Prime Minister : I have explained to the House twice that we shall examine whether a system can be made credible. When we have finished that examination, we shall make our decision.

    Mr. Bell : Will the Prime Minister give way?

    The Prime Minister : I will give way to the hon. Gentleman, and then I shall make some progress.

    Mr. Bell : The Prime Minister is announcing what appears to be a very important and significant change of policy : we are moving away from the external discipline of the exchange rate mechanism and the deutschmark as an anchor to our policy of getting inflation down to an internal discipline. Are we still shadowing the deutschmark, and will there be a wages control policy for public sector employees?

    The Prime Minister : I announced to the House–for I think it has a right to know–how we shall conduct economic policy while we are not in the exchange rate mechanism. It is essential that the House is aware of how we shall conduct policy. I have said that we shall examine the practicality of returning to a reformed exchange rate mechanism and make a judgment on whether that is a workable system and then whether to join. We shall certainly undertake those negotiations.

    I turn now–

    Mr. Nicholas Budgen (Wolverhampton, South-West) : Will my right hon. Friend give way?

    Hon. Members : Give way!

    Madam Speaker : Order. The Prime Minister has made it clear that he wants to make a little progress.

    The Prime Minister : I give way to my hon. Friend.

    Mr. Budgen : I am sure that my right hon. Friend will agree that we have been discussing the details and fundamentals of the exchange rate mechanism for very many years in this House. Will he please explain to the House what are the new details that have caught him out so unexpectedly that he requires guidance on them before he can tell the House whether he intends to go back into the mechanism?

    The Prime Minister : My hon. Friend has a long-held view that the right thing to do is to let sterling float. I understand that view, but I must remind him that sterling was floating when, in 1981, interest rates rose by 4 per cent. in less than a month, and that it was under a system of floating exchange rates that interest rates rose to 15 per cent. before we were able to bring them down to 10 per cent. within a co-operative mechanism such as the ERM.

    The Government’s general policy towards Europe must be founded on a concern for our long-term national interests, and I believe that it is time that we turned afresh to face directly the whole question of Europe and our place in the European Community.

    There are broadly three schools of thought about our membership of the Community. The first–it is spread thinly across each political party–is that we should leave the Community; that we should never have joined. It is a minority view, often disguised by rhetoric affirming support for the principles of membership while actions speak the opposite. There are people who, in their hearts, would prefer it if we were not in the Community, who trade under false colours and who do not address their arguments to the implications of non-membership for jobs, prosperity and the future.

    The second school of thought is that European development is inevitable and goes inexorably in one direction : that sooner or later a centralised Europe is inevitable. Those who take that view are often the direct descendants of those who, 20 years ago, thought that socialism was inevitable, before it became completely discredited around the world.

    I do not share the belief in the desirability or inevitability of a centralised Europe. Each country in the Community at times of crisis will inevitably look first to its own national interest; each will pool some of it in the common interest, but none will sacrifice it. Just as the interests of France and Germany will always come first for them, so the interests of Britain must always come first for us. I understand the fears about a centralised Europe, but I think that they are fanciful, for we will not have one.

    The third school of thought, the one for which I stand, is quite different. It is that it is in the interests of Britain–our interests, our objectives and our prosperity–for us to be part of the development of our continent. By part, I do not mean a walk-on part; I do not mean simply being a member. I mean playing a leading role in the European Community. I mean helping to determine the direction of policy, building the policies that we want and fighting those that we do not want. We will need to compromise on some matters, but so will every national state in Europe unless we return to tribalism right across the European Community.

    This co-operation in Europe demands a wider Europe. It demands the entry of the Scandinavians and the Austrians and, over time, of the east Europeans– those newly democratic states which have every right to look to the Community and the west for a more secure future. This co-operation also requires us to deal with the concerns about the internal development of the European Community. Those concerns exist not only in this country but in every country of the Community. There are fears throughout Europe that the Community is too centralised, that it is too undemocratic and that the leaders of the Community are seeking to develop it too fast for their national Parliaments and people. The events of recent months have shown that, if Europe is to be built on a sound foundation, we cannot ignore those feelings or brush them aside as a matter of no concern. The good European does not ignore those fears. He seeks to put them right–and that is the policy we pursued up to Maastricht, during Maastricht and after Maastricht.

    The Maastricht treaty has become a totem around which those in favour of Europe and those opposed to Europe are now dancing. In truth, it is less important than the pro-Europeans claim and in no way as far-reaching as the sceptics tell us. Many of the things for which the Maastricht treaty has been criticised spring inexorably from the treaty of Rome or the Single European Act.

    One of the main criticisms of the Maastricht treaty is the move towards a single currency. The House will recall that I declined to accept that move in the negotiations because I did not believe that Europe would reach the right economic conditions to support a single currency. I have never believed–I have stated it frequently–that Europe would reach the right convergence by the mid-1990s. That is why I refused to commit Britain to a single currency.

    In the light of the continuing economic problems throughout Europe and of the currency turmoil of the past week, I must say that I was right and– [Interruption.]

    Mr. William Cash (Stafford) rose–[Interruption.]

    Madam Speaker : Order. A great many of our fellow citizens were keen that the House should be recalled, and they want to hear what the House has to say–as, I believe, do people thousands of miles away. Let us give each and every one of us a proper hearing. The Prime Minister knows exactly who is standing behind him. If he wants to give way, he will do so.

    The Prime Minister : I must tell those who have exaggerated ambitions for a single currency that it must now be an ambition postponed. In the Maastricht treaty, we safeguarded our national interest on the single currency. Elsewhere in the treaty, we secured other very important gains for Britain. I remind the House that, early in their presidency, the Dutch presented proposals on foreign policy, defence policy, immigration and justice–all of which would have been undertaken under the treaty of Rome. We rejected that. At Maastricht, we secured provision for co-operation between nation states outside the treaty of Rome, outside the power of initiative of the Commission and outside the jurisdiction of the European Court. Those who claim that Maastricht was a treaty too far should ask themselves, “What was the situation before the Maastricht treaty?” Another important achievement was the provision restricting the scope for Community action. That provision was put in at our insistence. It reflected our long-standing argument that the Community should take action only where it could do so more effectively than a nation state or more than one member state co-operating voluntarily. We had to fight hard for that provision with the support of some other countries–notably Germany–but it was a break point and we won it. It has since found an echo in public opinion in Denmark, France and right across the Community. Although the Danish people narrowly voted against the Maastricht treaty, the Danish Government have made it clear that that is not necessarily the last word. The Danish Government plan a further referendum.

    Mr. D. N. Campbell-Savours (Workington) : Will the Prime Minister give way?

    The Prime Minister : I will make some more progress.

    If, however, the Danes were unable to go back to the people, or were to lose again in that further referendum, the Maastricht treaty could not proceed. It would not be acceptable for the 11 to go ahead without Denmark, and against the will of the Danish Government and people. That cannot happen, and it will not happen.

    The Danish Government will publish a White Paper next month, at the start of a process of consultation. It would not make sense to bring the Maastricht Bill back to the House of Commons before we know clearly what Danish intentions are, and when and how the Danes propose to consult their people again. When those things are known, however, we must examine the Bill further.

    Those who assume that the Bill is dead have overlooked two things. First, there is much in it that we want; secondly, with the consent of this House of Commons, I agreed that Bill. I do not believe that it would be proper for a British Prime Minister to agree a treaty, and then come back to the House of Commons and disown it. In this country, people know that it is in our interests to be in Europe, but they fear that the Community seeks to intervene too intrusively in our national life. They fear that things that have always been dealt with by individual nation states–and should be dealt with by individual nation states–are instead gradually being drawn within the control of the Community. So we need a definition–a settled order–of what is for national action and what is for Community action. We need clear criteria by which Community proposals will be judged. When we are satisfied that such a system has been put in place, and when we are clear that the Danes have a basis on which they can put the treaty back to their electorate, we shall bring the Maastricht Bill back to the House of Commons.

    Mr. Campbell-Savours : If the French, the Germans and the Benelux countries decide to forge ahead with a Community based on greater monetary and political co-operation, will the Prime Minister be prepared in any conditions to leave Britain outside that in the Community?

    The Prime Minister : There might well be circumstances in which others would make decisions that they believed to be in their national interests; but I have said repeatedly, and agreed under the Maastricht treaty, that any question of a single currency must be determined by the House of Commons at the time when others go ahead, and I stick to that view.

    Mr. John Wilkinson (Ruislip-Northwood) : Is my right hon. Friend really telling the House that–notwithstanding the fact that two thirds of the French people did not vote in favour of the ratification of the Maastricht treaty; notwithstanding the fact that, when the question was first put to them, the Danes voted against it; and notwithstanding the fact that my right hon. Friend will not grant the British people a referendum–the House is somehow to proceed with this extraordinary process?

    The Prime Minister : We are a parliamentary democracy, and the House is the place in which to consider the Bill–line by line and clause by clause. Other nations may have a tradition of referendums : they may call a referendum, followed by a debate on the whole Bill lasting one or two days, and approve every part of the Bill immediately. That is not our parliamentary tradition, and I do not believe that it would be acceptable to the House of Commons. As for the second part of my hon. Friend’s question, I have made it clear–and I repeat again–that, when the conditions that I have set out are fulfilled–when we have moved forward on subsidiarity, and when the Danes have decided how they will proceed–I will bring back to the House the treaty that I negotiated with the approval of the House : the treaty that was approved at the general election, and on Second Reading some time ago.

    Let me repeat that, when we are satisfied that a settled order has been put in place, we will bring the Bill back to the House. That is one of the matters that are to be put in hand at the special meeting of the European Council on Friday 16 October.

    Mr. Michael Spicer (Worcestershire, South) : I am most grateful to my right hon. Friend for giving way. He has expressed the view that the House should take the final decision on the Maastricht Bill. Therefore, will he give consideration to allowing a free vote in the House?

    The Prime Minister : I believe that my hon. Friend stood at the general election supporting the Conservative manifesto, which indicated that we would bring the Bill before the House. I still support the commitment that I had in that regard in the manifesto. I said that that was one of the matters to be put in hand at the special meeting of the European Council on Friday 16 October. That special meeting will take place at the international conference centre in Birmingham.

    That European Council needs to respond to the concerns that people right across Europe have shown about the direction of Community policy, to review what is wrong with the exchange rate mechanism and how the system can be made to work better in future, to consider preparatory work to meet Denmark’s concerns and, of course, to give a further impetus to the general agreement on tariffs and trade round. During recent months, our concerns about the Community have been mirrored across Europe. The British agenda is now on the table in every country of the Community.

    It is worth reminding ourselves why the Community was built and why we joined it. Its founders wanted lasting peace in western Europe, and they achieved it. But they wanted something more [Interruption.] Yes, what about the economy? The founders wanted to build up economic prospects across Europe on a scale that no previous generation had seen, and they achieved that. They wanted the prosperity of each generation to exceed that of its parents, so that the chances for each generation would be greater and the opportunities more fulfilling. Collectively in Europe, that is what we have achieved, despite the difficulties that presently exist.

    Mr. Jimmy Boyce (Rotherham) : On a point of order, Madam Speaker. Given that the debate’s title is the United Kingdom’s economic policy, could you tell us when the Prime Minister is going to get round to discussing that policy?

    Madam Speaker : As I have not seen the Prime Minister’s speech, I can only say that the hon. Member for Rotherham (Mr. Boyce) must give the Prime Minister the opportunity to reach that point.

    The Prime Minister : Clearly, the hon. Member for Rotherham (Mr. Boyce) does not realise the extent to which our economic well-being depends on our relationship and trade with Europe.

    I have never seen our future as being a sour, isolated country off the mainland of continental Europe. That surely cannot be a way for us. Even though some will swallow hard at compromises that may need to be made, they should remember that others in Europe will need to compromise as well. The voice that is raised to say that we should look after only our own interests is the voice of narrow self-interest. Such a voice always has resonance in politics and is almost always wrong. It is a policy more certain to begin with cheers and end in tears than any other policy that has been devised.

    I have never understood why some are so fearful of our prospects in Europe–neither do I understand why those who are often most fearful are those who would claim to be most proud to be British. Why, then, with that pride do they assume that we will always lose the arguments in Europe when that has not been the Community’s history and will not be the Community’s future?

    We have the chance to build in our time, in our generation, the sort of Europe for which we have always longed; the sort of Europe that I believe its citizens want; a secure Europe of nation states co-operating freely for the common good; a prosperous Europe, generating new wealth within the biggest free trade area in the world; a free trade Europe in which Brussels is kept off industry’s back. Only one Government–this Government- -offer industry freedom from state control. Only our policies of low taxation and low inflation will allow the genius of British enterprise to flourish, and only this Government’s policies will secure for the British people the prosperity that they deserve in the ’90s and which this Government will deliver. I commend the motion to the House.

  • Mr Major’s Statement Following French Referendum – 20 September 1992

    Below is the text of Mr Major’s statement following the French referendum result, made in London on Sunday 20th September 1992.

    PRIME MINISTER:

    Good evening. I want, first, to congratulate President Mitterrand on the outcome of the French referendum today. We now need to consider the way forward and there are a number of important matters in that consideration. We firstly await Denmark’s conclusions on how she will deal with the particular problems of ratification that she faces. Secondly, I believe we need to deal with the very particular problems in the foreign exchange markets in recent days that have revealed short-comings in the Exchange Rate Mechanism System. And thirdly, I think we do have to take account in public debate of many of the concerns that have been raised throughout the Community over recent weeks.

    In the light of all that I propose to call a Special European Council of Heads of Government in early October to consider those issues. In the light of the outcome of that Council the Community can decide how to proceed in a way that carries the support of member states right the way across the Community.

    As far as Britain is concerned, let me say that progress with the Maastricht Bill in the House of Commons must await firstly the clarification of Danish intentions and secondly, the outcome of the Special European Council that I have just announced.

    There is of course a vast weight of other Community work that will need to continue, we will need to continue with the completion of the Single Market, the enlargement of the Community, there is an urgent need for a GATT settlement, we need to look at future financing of the Community and there are a range of other issues that need urgent attention during the British Presidency. We will continue with those matters quite apart from the earlier problems I raised.

    QUESTIONS AND ANSWERS

    QUESTION:

    Is Maastricht no longer good for Britain, Prime Minister?

    PRIME MINISTER:

    No, the situation is as it was before, we must wait and see what the outcome is of the special Council and then we will have to decide how to go forward.

    QUESTION (Mike Brunson, ITN):

    Given the narrowness of the votes both in France and in Denmark, can you really press ahead with enthusiasm the ratification of the Bill in this country ever?

    PRIME MINISTER:

    I think we have to take account of the concerns that have been expressed right the way across Europe and that of course is one of the reasons for calling the special European Council, clearly that is important.

    QUESTION:

    Are you personally still behind the Maastricht Treaty?

    PRIME MINISTER:

    Yes I am.

    QUESTION:

    Will not the monetary elements of the Maastricht Treaty now have to be re-written in view of the course of the ERM mechanism?

    PRIME MINISTER:

    No I do not think that is the case, we are examining that but it seems at first glimpse that that is not so.

    QUESTION:

    Do you still think that this is a good treaty for Europe and a good treaty for Britain?

    PRIME MINISTER:

    Yes I do. There is much in the Maastricht Treaty, the areas of development which enable us to develop outside the Treaty of Rome that we have sought as British policy for a long time and that will enhance cooperation right the way across Europe. That cooperation is valuable for Europe and it has been an object of British policy for the last quarter of a century. So I think there is much in the Maastricht Treaty of value and I very much hope that those elements will go forward.

  • Mr Major’s Press Conference in Edinburgh – 11 September 1992

    Below is the text of Mr Major’s press conference in Edinburgh, held on 11th September 1992.

    GUS O’DONNELL:

    Good afternoon, ladies and gentlemen. Welcome to Bute House. I apologise that we’re running a little late, but our very interesting discussions this morning overran. I’ll be brief. The Prime Minister will make a brief opening statement, and then the Prime Minister and Secretary of State will be happy to answer your questions. During that period, if you could, during the questions and answers, make clear names and organisations, and keep your questions just to single questions if that’s at all possible.

    PRIME MINISTER:

    Fine. Thank you, Gus. I’ll just speak very briefly at the moment, and then we’ll try and get in as many of your questions as I possibly can. I’ve come back to Scotland for a raft of reasons. Firstly, because I wanted to take the opportunity of last night’s dinner at the CBI to make a speech that’s relevant, not just to Scotland, but to the whole of the United Kingdom, and our relationship particularly with the European Community, and I was grateful of the opportunity of being able to do that in Glasgow. Some of you this morning may already have seen today’s inflation figures that were published around 40 minutes ago. The Retail Price Index is down from 3.7 to 2.6, but equally relevant, I think, is that the underlying rate of inflation has fallen from 4.4% to 4.2%, so the progress on inflation is continuing, and continuing steadily. In the Seminar we’ve had this morning – the Seminar is not an end in itself. It’s just part of a continuing process of taking stock. Scottish Office Ministers have been doing that in different ways. The Policy Unit have been doing it. I have been doing it on a number of visits to Scotland, but it is very easy for me to get hold of political opinion, to find out Party opinion, and to bring together business opinion. What I was seeking to do this morning was to bring together a number of distinguished Scots who were there in their personal capacities, not because of their particular public position, but because their personal experience and knowledge made it likely they would have something worthwhile to contribute as Scottish individuals, to the debate about the constitutional arrangements for Scotland.

    I think it was a very good debate. There are a number of things within it that I propose to follow up with the individuals concerned, but it is just part of a continuing debate so I don’t propose to go into the details of what was said, and I think it is too early to draw conclusions from it. I will say it was a pretty wide ranging discussion, and in a number of areas, rather surprising points were made that I shall certainly wish to follow up with the individuals concerned, perhaps in further meetings, perhaps in correspondence, so from my point of view, it was an extremely useful occasion. Now, I am in a few moments going to have the opportunity of extending this debate. We have a large lunch here for Scottish lawyers and members of the Church, and this afternoon you might say, or may not yet know, I’m going to have a look at Holyrood House to check the arrangements for the European summit that will take place in December. So that is broadly the pattern of the day. I’m now happy to take whatever questions you may have.

     

    QUESTIONS AND ANSWERS

    QUESTION:

    Prime Minister, you talked about surprising points there. Could you perhaps give us a little bit more information about what those points were, and why they were surprising?

    PRIME MINISTER:

    I think the – I’m not going to give you details of them all, no, but I think there was a different perspective put on some of the constitutional questions that have been asked in Scotland in the past. There was a great deal of concern expressed by a number of people around the room about decentralisation as opposed to devolution. That applies to the private sector, of course, as well as to the public sector, and it was a point made that that affects too the lives of people in Scotland. There was also a point, I thought rather a striking point, that one of the things that took authority away from the Regions, not just Scotland, but the other Regions in the past, was nationalisation because it necessarily centred the decision-making process far away, and that was another point that emerged, and so there are a whole series of angles on the debate – some historians, a number of people in other practical professions, farmers – that were actually raised during today’s discussion.

    QUESTION:

    Prime Minister, your opponents, your political opponents, say that this morning was largely a stunt. Do you have any particular comments to make on that? They say it was a charade, no real substitute for genuine consultation

    PRIME MINISTER:

    Well, they would, wouldn’t they? What would you expect them to say? If I wasn’t here talking to people from Scotland who are distinguished individuals, they would say, why am I not here doing precisely that? As I am here doing that, they say “Well, it’s a charade”. They may wonder why I haven’t invited them to have a discussion with them. Well, I know their opinion. I get their opinion weekly in Parliament. I’m aware of what it is. I’m able to consider it. I know its value, and I want to stretch out beyond that, so they are saying what I would expect them to say, but I don’t think it really matters. We will continue with consultation, and when we’ve reached conclusions we’ll announce what they are.

    QUESTION:

    Prime Minister, David Whitton, Scottish Television. We’ve heard about the taking stock exercise almost ad nauseam, since the Election. Can you give any indication at all as to when the taking stock will cease, and you’ll come up with some solutions?

    PRIME MINISTER:

    Well, let me come back to the point I was making just now. If I produced a solution now, you’d stand up and ask me a question about how I could possibly have consulted all the people who needed to be consulted in this time, and the answer is, I can’t have done, so I’m going to go on consulting until I am sure I have got a rounded view of Scottish opinion, and when I’m certain that I have a rounded view of Scottish opinion I will discuss that with my colleagues, and we will make decisions. I can’t put a time frame to it because I don’t know how far the debate will develop and what points will arise within it, but as soon as we have our decisions we will make them, and there will be no unnecessary delay.

    QUESTION:

    Prime Minister, Rona Campbell, Sky Television. The reduction in inflation has been minimal today. What do you have to say about that?

    PRIME MINISTER:

    Well, it’s steady and it’s consistent. It’s only two years ago that I was facing press conferences like this, and people were saying, “Well, inflation is over 10% and it’s rising”. It’s now 3.7% and it’s fallen again to 3.6%. That is progress, steady, secure progress in the right direction. We’ve now got inflation down to levels it has only touched briefly in the last quarter of a century, and what is different about this is it looks as though this is a secure reduction of underlying inflation that will be sustainable in the future, and the reason I think that is very important is really very clear-cut and very simple. If we have an inflation rate that is higher than the inflation rate of our principal competitors in Europe and beyond, then we will become uncompetitive, we will lose markets, we will lose jobs, we will lose prosperity. If, on the other hand, we have an inflation rate that is better than our principal competitors, then precisely the reverse will apply. We will gain in competitiveness, we will gain markets, we will gain jobs, and we will gain prosperity. I wish it could be done magically and quickly, but it can’t be. It’s a long and a sustained process. I think we’re making the most substantial progress in inflation that we have seen for very many years.

    QUESTION:

    Can I ask, Prime Minister, on a personal basis, has your personal commitment to the distinctive nature of Scotland been strengthened by this morning’s talks?

    PRIME MINISTER:

    Yes. I used the expression, and it was quoted back to me this morning. When I spoke about Europe the other day I made the point about the importance of the Nation State, and that people did not wish to lose the distinctive nature of their Nation. Well, I used that in terms of the European Community as a whole, but it is equally applicable in terms of the United Kingdom, and I see no circumstances in the future where the Scots are not going to remain distinctively Scots, the English distinctively English, the Welsh distinctively Welsh, and the Northern Irish distinctively Northern Irish, and I welcome that. I don’t wish to do anything that would damage the distinctive cultures, natures, traditions, and instincts of the component parts of the United Kingdom. What I do wish to do is to make sure in which we can show the whole of the United Kingdom, that it is a genuine partnership. It isn’t a question of saying “Scotland must stay there with England because that is good for Scotland”. That is not the argument. The point is that if any part of the United Kingdom were not an equal partner within the United Kingdom then every part of the United Kingdom will suffer. That is the point of the argument, and that is what has repeatedly to be made clear.

    QUESTION:

    [Inaudible] from the Independent. You gauged the opinion of 14 people this morning. A constitutional referendum would slightly widen that opinion. Is that an option that you would ever consider at any time?

    PRIME MINISTER:

    Well, what I was doing today was gathering thoughts in depth. If you have a referendum of any sort, it asks a single question, and one of the disadvantages of referenda is, you may ask a single question, but the answer may come back for a whole raft of reasons, many perhaps unconnected with the question, and I think that is what people are finding, for example, in the French referendum at the moment. What I am trying to gauge is not the answer to a simple single question. I’m trying to gauge the instincts of people, and what they believe needs to be done to enshrine and secure the distinctiveness of Scotland and its place within the Union.

    QUESTION:

    Did the spectrum of opinion among those 14, do you think, represent what you wished to find out from them?

    PRIME MINISTER:

    It was a broad spectrum of opinion, yes. What it was not, what it was emphatically not, was the entrenched political opinions of the political parties. I know that, and I know the opinions, and welcome the opinions that I get from the political parties and from business, but I do know that. I do need to meet distinguished individuals and find out what they need. Lots of other individuals as well. If it were possible to hold in-depth meetings with everyone in Scotland, no doubt I would learn more, but I think one has to draw a line of practicality somewhere.

    QUESTION:

    Prime Minister, you’ll be meeting The Queen at Balmoral, and discussing probably the recent events surrounding the Monarchy. How concerned are you about these events, and would you consider a Privacy Bill.

    PRIME MINISTER:

    I have no doubt about the conviction right across the United Kingdom about the importance of the Monarchy. It is an entrenched, enduring, and valuable part of our way of life. I have absolutely no doubt about that. I’ve nothing to add to that.

    QUESTION:

    Mr. Ashdown has called for the recall of Parliament – is he likely to get a different answer to the one you gave to Mr. Smith?

    PRIME MINISTER:

    Well, I haven’t seen the letter that I gather Mr. Ashdown has sent to me. I will consider it carefully, but I see no reason to change the decision I made in the past, unless something quite compelling is in Mr. Ashdown’s letter that I don’t expect to find there, but I had better read his letter first.

    QUESTION:

    He says that British lives could be at risk, and never before he says, have British Service lives been placed at risk without Parliament being first consulted.

    PRIME MINISTER:

    I think I’d better wait for his letter, don’t you, as I’ve just said.

    QUESTION:

    Please can we go to your proposals – I know you can’t tell us precisely what they’re going to be, but are we right to see them within the parameters of building essentially on the Scottish Grand Committee, and possibly doing something within the Scottish Office, or might they go further than that? Might they be more radical than that?

    PRIME MINISTER:

    I think everyone is looking in individual areas to see what we might do, and I’m not going to speculate, I’m not going to have the proposals that we are beginning to build up, and they’re by no means concluded yet. Eleanor – we’re beginning to build them up as we talk to people. I’m not going to have them picked off one by one as we go through, so I’m going to respond to that when we’ve concluded our consultation.

    QUESTION:

    Referring to what you said about nationalisation because of one of the questions here is the feeling against water privatisation. Is that something you heard this morning?

    PRIME MINISTER:

    That came in as a side issue in the discussion in the general question of decentralisation. The point that was actually made about privatisation was a point of substance. If there is to be privatisation, the best way to do it was through the levels of individual shareholding rather than franchising. That was a particular point that was made. That was the way that it came up.

    QUESTION:

    [Indistinct] from the Guardian. You referred to the European Nation State. Scotland, of course, is a Nation but not a State. You’ve ruled out Statehood for Scotland. Is there anything substantial below that which will give the Scots any indication that you’re taking the reform of Government seriously north of the border?

    PRIME MINISTER:

    Well, if I were not taking it seriously north of the border, I wouldn’t be spending as much time on it as I have been doing. I wouldn’t have made the importance of the Union and Scotland’s distinctive role within it an absolutely central part of the General Election campaign. Many people were surprised when I did that and they were surprised of what happened as a result of me doing that. So, I don’t think it is a criticism that is sustainable that I’m not taking it seriously.

    QUESTION:

    Prime Minister, [Inaudible] of The Courier in Dundee, can you make any comment on Scotland’s share of Central Government funding?

    PRIME MINISTER:

    Well I see the stories in the press that appear every year as well but I think you’ll have to wait till the end of the public expenditure round. There are during every public expenditure round a vast amount of rumours, some related to Scotland, some related to individual departments. I think you will have to wait until the PES round is concluded.

    QUESTION:

    Will you make public what the other regions of the country get?

    PRIME MINISTER:

    Oh, it’s all published, yes of course. Of course, there’s a public expenditure White Paper that is published at the end of the round and then there is typically a debate in the House of Commons and all the Budget Heads are published right the way across public expenditure for each component part of the United Kingdom. The answer to your question is, yes.

    GUS O’DONNELL:

    We have time for two more please.

    QUESTION:

    [Inaudible], BBC Television. You’ve made much of the principle of subsidiarity in the European argument. How far is that principle exactly the same when applied to Scotland?

    PRIME MINISTER:

    Subsidiarity relates to devolution of responsibilities. One of the things I think that people really have not taken on board, and this did come up of course in our discussions this morning, was the extent of administrative devolution that actually lies in the hands of the Secretary of State. He has a most remarkable amount of devolution. Now it is perfectly clear, from an opinion poll mentioned to us by one of the participants this morning, that that is not fully appreciated in Scotland. People aren’t aware of the extent of devolution in the Scottish Office and of the responsibilities of the Scottish Office and I don’t suggest that that is an answer to all the matters that we are discussing, but I think in terms of subsidiarity, it is not all that long ago that there was relatively little responsibility devolved from Whitehall to the Secretary of State in Scotland. Over recent years that has built up quite dramatically. There are areas where people would wish to see it extended of course and that is a legitimate part of debate. But, nobody on the subsidiarity principle should underestimate the amount of devolution of administrative responsibility that has gone from Westminster to the Secretary of State in Scotland.

    QUESTION:

    Prime Minister, were you surprised by the views of the poll this morning?

    PRIME MINISTER:

    There were some very original ideas. I cavil at the word “surprise”. I don’t think I was surprised in that sense but there were some very original thoughts and some very original ideas put forward and – no, I’m not going to – and they were put in an historical content in a number of cases as well and it may be other people will wish to express publicly what they said at this morning’s meeting, that is for them, but I don’t want to put into my words in public what they said to me in private.

    QUESTION:

    Of the 14 participants, did any openly advocate a Scottish Parliament, Assembly, any such body like that?

    PRIME MINISTER:

    Yes, all the points were raised in the discussion.

    QUESTION:

    Prime Minister, you said earlier that your stand on Unionism had been vindicated by the General Election result. What do you say to the three out of four Scots who did not vote for your Party?

    PRIME MINISTER:

    Well you’re presupposing that all Scotland voted on one issue. And they didn’t. They patently didn’t. They voted on a whole series of different issues. This, as somebody did point out this morning, this is the first occasion for very many years, at the end of a term of Parliament, where the Government in office, whether Conservative or Labour, actually achieved more votes and a better turnout in Scotland at the end of a period of Parliament. We actually achieved that at the end of a fourth parliament. Now, I think that is something that not many people in this room would have anticipated as we came into the Election campaign. Indeed, I know that to be the case, and you know that to be the case, because we discussed that in the run-up to the General Election itself. Now I think, I know as an ex-Treasury Minister, you probably don’t expect me to count well, but there were two more questions and I think we’ve had them. But, we’ll take this last question.

    QUESTION:

    [Indistinct] from The Herald Newspaper. Can I ask how the 14 people were selected, and whether you genuinely think that was a representative cross-section?

    PRIME MINISTER:

    Well, I’ll ask the Secretary of State. I devolved the selection to the Secretary of State. [Laughter].

    SECRETARY OF STATE FOR SCOTLAND – IAN LANG:

    They weren’t selected in a representative capacity. They were selected for their individual achievement, their distinction in their individual walks of life and they covered a range of walks of life. We had historians, journalists, we had academics, we had businessmen, we had those involved in running Government bodies and working on a range of Government bodies across the whole scene and I believe that the distinction and the quality of the contributions that they made to the discussion this morning vindicated the choice. Indeed, I think their own view about their fellow participants was altogether complimentary.

    PRIME MINISTER:

    Thank you all very much indeed. Thank you.

    GUS O’DONNELL:

    Sorry, must end it there.

    PRIME MINISTER:

    Otherwise, I shall be very discourteous to Scottish lawyers and the Scottish Church, and I wouldn’t wish to do that. Thank you very much.

  • Mr Major’s Speech to the Scottish CBI – 10 September 1992

    Below is the text of Mr Major’s speech to the Scottish CBI at the Forte Crest Hotel in Glasgow on Thursday 10th September 1992.

    ALISTAIR MCCALLUM:

    Prime Minister, President, My Lords, Ladies and Gentlemen, welcome to CBI Scotland’s Annual Dinner. I hope you’ll have a very happy evening. The Grace will be said by Dr. William Morris. The Rev. Dr. William Morris.

    THE REV. DR. WILLIAM MORRIS:

    Let us pray.

    Oh, Lord, since these good things are of Thy giving

    Help us to use them all for wiser living

    Each use restraint, reduce inflation

    To be a slimmer, fitter nation

    And not be sunk in deep depression

    When waist and hairlines face recession

    Oh, Lord Thou dost with steady interest wait

    Which of Thy family will devaluate?

    Lord, guide us in our problems from on high

    And, for this evening, bless the CBI

    Amen.

    THE PRIME MINISTER:

    Alistair, thank you very much for your kind words, and perhaps first I can offer my thanks to you and your colleagues in the CBI for your hospitality here this evening. I knew when I arrived a couple of hours ago that this evening was going to be a special evening [Laughter] and so, for one reason or another it has so far proved. I was piped in, I was offered what I was told, in that lovely bowl, was a half glass of whisky. If that was half a glass of whisky, I’m half a Dutchman. [Laughter].

    Then we had what I can only call a rather novel Grace from Dr. Morris …., [Applause]. It’s always good to see the Church join the State in a little battle against inflation [Laughter] so the CBI has lost none of its originality, and none of its hospitality, and then when Alistair and I stood up for the Loyal Toast a few moments ago, you may or may not have noticed, but a part of this platform nearly collapsed. I felt rather like the Nationalists on Election night [Laughter] but let me turn from the ridiculous to the relevant.

    I want, if I may, Chairman, to speak tonight about the economy of our Country, the whole of our Country, every part of it, its role in Europe, and its future prospects, and they’re big subjects all of them, but what I want to seek to do this evening is to put them into proper perspective because far too often comment on the economy is partial, and is narrowly focused. It takes no account of the wider domestic and international scheme. It’s a snapshot, not a portrait; a detail, not a landscape. It’s too often darkly lit because too many always think it’s fashionable to be gloomy about our future. They forget what we’ve achieved so they underrate what we can do.

    Chairman, it’s only two years ago that business was demanding two things from the Government, and, as Chancellor at that time, I remember the insistence of business, and I remember well what they were seeking from the Government. Business wanted a stable pound, and it wanted lower inflation, and it wanted this, I think, for good reasons. Inflation robs people of their savings.

    It impoverishes those on fixed incomes. It wrecks profits and investment. If Britain has higher inflation than our competitors we lose competitiveness and we lose jobs. Inflation loads the scales against us, and business wanted stable exchange rates because it wanted certainty. It wanted a climate in which it could plan for the long term. I believe that business was right to demand low inflation, and stable exchange rates. They are the essential preconditions for sustained economic success.

    Two years ago, before we joined the Exchange Rate Mechanism, inflation was over 10% and seemed to be rising. We forget too readily the alarm that that caused. Now inflation is 3.7% and falling, and we overlook too readily the opportunities that that offers. We saw such figures before. We saw them briefly in the mid-1980’s but they didn’t last. This time I am determined that that regime of low inflation will last [Applause] and as it does so wages are moderating as well. There has been a crucial change in the inflationary climate in industry. Growth in underlying earnings is down to 6%, the lowest that we’ve seen for a quarter of a century.

    We forget also that, two years ago, exchange rates against our European trading partners, where 60% of our trade now goes, exchange rates against our European trading partners were uncertain and volatile. Now they’re kept within a 6% band in the Exchange Rate Mechanism, and, in due course, will move to the two and a quarter per cent band. Sterling still fluctuates, of course, against the dollar and other currencies, as we’ve seen all too vividly in recent weeks, but it does now have a fresh and certain stability against the currencies of our main trading partners.

    Chairman, as the fear of inflation and exchange rate instability has diminished, so the cry of many of the Government’s critics has changed. Now, we have the inevitable chorus of quack doctors peddling their remedies. There is, I think, a difficulty with these remedies. As we’ve learned from experience, miracle cures simply don’t work, never have, and never will. We need to face our problems squarely. It’s too easy to regard Britain’s problems as unique, or to blame them on the Exchange Rate Mechanism. Neither point is true. The problem of slow growth, a difficult problem, one we face at present, the problem of slow growth is not peculiar to Britain. It is, at the moment, a worldwide problem. We’ve seen the same chain of events in the United States, in Canada, in Australia, in New Zealand, and elsewhere, and in all those Countries, not just in the UK, in all those Countries businesses and individuals took on too much debt in the late part of the 1980’s. Asset prices, especially property, rose sharply on the back of that, and general inflation began to accelerate. Eventually, of course, as interest rates rose and debt burdens became intolerable, people’s top priority was to reduce their debts, and, as a result, businesses stopped expanding, and consumers stopped spending. Some of those Countries have lower interest rates than Britain, but as the United States has illustrated in recent months, the problems of adjustment are just as difficult.

    Equally, I dare say any businessman returning from Continental Europe will have become only too well aware of economic difficulties faced there – weakening activity, low confidence, and rising unemployment, so the process of adjustment has been painful everywhere, but it is necessary, and it is not something that Governments can simply wish away. Improvement rests critically on the decisions which individual businessmen and consumers have to make about how they adjust their own finances.

    I will tell you what my conviction is. My conviction is that adjustment is best managed within the framework and the discipline provided by our membership of the Exchange Rate Mechanism. That discipline ensures that we keep in line with our major competitors in Europe. One thing is certain. If we have inflation around 4%, and our principal competitors have inflation around 2%, then we will lose markets, competitiveness, jobs, and prosperity. It would, at this moment, be madness to let our competitors steal the edge on inflation. I am absolutely clear that for us to compete effectively in Europe, we would need our present policies, whether or not Britain was a member of the Exchange Rate Mechanism, and as we have seen in Scandinavia this week, it is a cold world outside the Mechanism for many Countries that one day wish to join it.

    I was pleased to note, Chairman, that the CBI, in your August Economic Situation Report, firmly endorsed the view that our exchange rate against European currencies, is an exchange rate at which industry can compete successfully, and Howard Davies repeated this very clearly when he addressed the TUC this week. I am sure that that is the right view. As the Chancellor has made crystal clear, there is going to be no devaluation, no realignment, and the export performance of many British, and notably many Scottish companies, provides convincing evidence of our current competitiveness.

    I know that things are not easy, even in Scotland – even in Scotland, which has outperformed so much of the United Kingdom in recent years, and sometimes I think we perhaps overlook, pass along and miss the remarkable changes that have come about in many parts of the United Kingdom, not least in Scotland. Anyone coming back, as I’ve done today, to Glasgow, and remembering the Glasgow of 15 years ago, would not recognise the same City, so great have the changes been [Applause] and then for the first time since records began, Scottish unemployment is below the average for the United Kingdom as a whole. Too high, I know, and I wish to see it lower, but when last was it ever below UK average? Never before. It is now as a result of the changing prospects in Scotland, and the enterprise of the businessmen in this room, and their predecessors in recent years in Scotland, so let me take this opportunity tonight to pay tribute to the response that industry has already made, and continues to make, in adjusting to the new disciplines of the Exchange Rate Mechanism. Costs have been brought under control. Exports are at record levels, and so is manufacturing productivity. Those are real achievements, and quite apart from being genuine achievements, they are the surest possible foundation for the future. Of course, there are problems caused by the weakness of the dollar, a dollar that has fallen by over 20% against the Deutschmark, and if that weakness were to persist, it would have damaging consequences, not least the distortion of international trade and investment.

    Let me say this to you, Chairman, for it is something that I believe passionately – all my adult life I’ve seen British Governments driven off their virtuous pursuit of low inflation, by market problems or political pressures. I was under no illusions when I took Britain into the Exchange Rate Mechanism. I said at the time, that membership was no soft option. The soft option, the devaluer’s option, the inflationary option, in my judgment that would be a betrayal of our future at this moment, and I tell you categorically that is not the Government’s policy. [Applause].

    All too often at difficult times in the past the solution was the same. Let the exchange rate go, and every time, sooner or later the result was the same – rising import prices, rising wages, rising inflation, and a long term deterioration in Britain’s competitiveness which offset any short term gain that there had been. Look for example, at the formal devaluation of 1967. The pound devalued by 14%. Did that lead to a sustained improvement in the UK’s competitiveness? It did not. A brief flurry only. Retail price inflation doubled over the following year, and any improvement in competitiveness swiftly ended. No greater competitiveness, and doubled inflation. What sort of target is that for British industry?

    Since the late ‘60’s the pound’s external value has halved. There were some who saw that as a way to steal a competitive advantage. They were wrong. Maynard Keynes, whom I have to tell you I don’t often quote – Maynard Keynes was right when he said, and I quote “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency”.

    There is a question, a question we might usefully ask ourselves – let me ask it, Chairman. Why is the Deutschmark so preeminent in the currency markets of Europe? It’s not because of current German economic performance. It is because the Deutschmark has an anti-inflation record, and maintains its value. Those who want freedom from the influence of the Deutschmark should realise that they can best get it from matching the Deutschmark’s anti- inflation record, and that is what we are determined to do in this Country. [Applause].

    We shouldn’t expect the road to permanently low inflation to be quick or to be easy, and we still have some way to go. Our inflation is above that of France and Germany, our most important competitors. Well over half our exports go to Countries with lower inflation than ourselves, so we must bite the anti-inflation bullet, or accept that we will be forever second rate in Europe. I refuse to accept such a future for this Country. We face difficulties, I know, but we have the prospect of non-inflationary growth, sustained non-inflationary growth in our grasp, and I am not prepared to let it go. There should be no doubt in anyone’s mind, the Government will stick to its policies, low inflation, free markets at home and abroad, low taxes, and firm controls on public spending. Those policies are good for business, and good for Britain, and they are our policies.

    Let me turn to something else that I believe is good for Britain, and good for business, and that is the Government’s European policy. In December, the Heads of Governments of the 12 will meet at Holyrood House in Edinburgh, the high point of the British Presidency. I’m delighted that so important an occasion will take place in Scotland, and I hope the famous, or perhaps in Glasgow I should say, the infamous Edinburgh climate will be benign.

    Earlier this week I spoke at some length about the Maastricht Treaty. Tonight, I would add only this. Britain stayed firm at Maastricht, firm in its determination to resist the encroachment of European regulations into the workplace. We rejected completely the Social Chapter, and we did so because our ambition is to free industry to compete on its own terms in the widest possible market for its products. Free trade is the route to growth. Free trade is the way out of recession, and to our Presidency of the European Community falls the task of completing two great efforts to liberalise international trade, the single market of the European Community, and the Uruguay round of negotiations under the General Agreement on Tariffs and Trade. When completed, the single market will be the biggest free trade area in the world – 340 million customers. A vast opportunity right there on Britain’s doorstep, right there on Scotland’s doorstep, and to us, the British Presidency, comes the responsibility for bringing it about, so we will be working hard for liberalisation, liberalisation in areas like transport and energy, removing barriers wherever they remain, seeking a level playing field for British business, making sure that the single market becomes a reality and not a slogan, and as we do so, we’ll be working at something else no less important, working at the ambitious task of completing the GATT round, and here agreement depends, not just on 12 Nations, but on over 100 Nations from every part of the globe. Nevertheless, progress is critical to the recovery of the world economy. It’s important to Britain. There are still far too many Countries, even rich, developed Countries, which maintain high tariffs against our manufactured goods. We need the new opportunities a GATT settlement could bring to our service industries, and a growth in world trade that a GATT settlement would bring about is a growth that the world in its current economic situation cannot afford to turn aside. The sooner we have that GATT agreement, the better it will be for every Nation in the world. [Applause].

    So, it’s not only our self interest that’s at stake. A GATT agreement already, in my judgment, long overdue is vital to the developing world, it’s essential to the survival of a world trading system that’s far too vulnerable to national protectionism. It is, that GATT agreement, one of the engines to restore growth. Negotiation of this in Europe, is a matter for the Commission, but we, the British Presidency, will press them, help them, cajole them, until that settlement is reached, but that is only part of our European agenda.

    We’ve already agreed far-reaching plans to reform the Common Agricultural Policy. We’ve agreed to liberalise air fares, to prepare membership negotiations for the EFTA countries, to put subsidiarity, that principle of minimal interference in national matters, and turn it from a slogan into a reality in practice. We have resisted extravagant plans for increasing the Community’s budget. All these bear tribute to Britain’s influence, an influence, I tell you frankly, that would not have been possible if we had sat carping on the sidelines rather than moving our Country into the very heart of the European Community …..[Applause] and only by that policy, by placing us where we can best maximise our influence, only by that policy can we maximise our influence and our control over decisions that affect our Continent and people. There is no other way, and to those who say, sometimes directly, sometimes subliminally, to those who say, “Withdraw from Europe”, “Pretend it doesn’t exist”, I say to them ,”Where have you been, Rip Van Winkle, that you ignore the largest market for our goods and a principal source of our future prosperity?”. I have not a shred of doubt that if we are to build the prosperity for this Nation that we need, then we need that British influence in the heart of the Community to build the sort of Europe, and the sort of Community that we wish to see: free, open, liberal with trade, and respecting the national identities and cultures of each of its member States. That is the ambition we have for the Community, and that is what we shall press for in our Presidency, and long beyond it. [Applause]

    Chairman, I want to conclude by looking at a different Union, a special Union, that very special partnership between Scotland and England. We should never express the value of that Union in purely economic terms. By the start of the 18th Century we had already shared a Monarch for a hundred years. Since your Stuart King, James VI, went South to succeed Queen Elizabeth, the last of the Welsh Tudors, that Royal bond, that military strategy formed good reasons for a closer Union, but it was the economic opportunities that persuaded many Scots of a necessity of Union with England in 1707, and that economic Union has prospered, and today Scotland can justly claim to have one of the most modern and diverse economies in Western Europe, and since 1707 Scotland and England, with Wales and Northern Ireland, have carried out a remarkably successful joint enterprise. It is the Union, with Scotland’s distinctive contribution, which has made all of this possible. It is since the Union, and because of the Union, that Scottish values, Scottish traditions, the Scottish Church, are to be found around the whole world.

    I believe the result of the General Election showed that there remains in Scotland, a strong desire to keep Britain united. [Applause]. I believe that when Ian Lang and I made that a central plank of our General Election campaign, we reached out above the normal issues of inflation, and mortgages, and education, and health, and touched something that is a very basic instinct for people in every part of these united Islands of ours and I don’t believe it was an accident that while all the other Parties suffered reverses in Scotland, the Conservatives defied the polls and the pundits, and won both seats and increased our share of the vote, but that is in the past. We must look to the future, and now we must uphold, develop, and strengthen that remarkable magical Union that has lasted for so long, and that in essence, Chairman, is what taking stock is all about.

    Ian Lang and Peter Fraser have already met a wide range of groups and individuals, each of whom has a special interest in and particular perspective on the role of Scotland within the United Kingdom. Their door will remain open to anyone with a genuine commitment to the integrity of the Union, and with ideas for making it work better. When I come to Scotland, or when I see Scots South of the Border, I will always be receptive to proposals designed to strengthen Scotland’s place in the United Kingdom, and it is as part of that continuing process of taking stock that I have invited a number of leading Scots from a variety of walks of life, to come and meet me in Edinburgh tomorrow so that we can exchange and generate ideas. I know that what they say will be immensely valuable. I’m looking forward to what I hope will be a wide ranging and productive discussion, and I want to hear myself, personally, from Scots, how they believe we can build up and strengthen that Union. These are matters of immense importance, not just to Scotland, but I think to every part of the United Kingdom. Sometimes I think the debate in Scotland has not focused on a wide enough canvas. It isn’t just a question of keeping Scotland in the United Kingdom. It is not just a question of that. It is a question of the contribution and the importance of Scotland to every single part of the United Kingdom. We would not have the United Kingdom without the support and the strength of each of its component parts. It is that capacity of each of the parts of the United Kingdom to come together with common aims, common purposes, common beliefs, but retaining the distinctive cultures of the English, the Welsh, the Irish, and the Scots, that makes this such a remarkable United Kingdom. We propose to strengthen it and build it.

    Chairman, in the few moments I’ve had this evening, I’ve taken the opportunity to touch on a number of important subjects – inflation, our position In the European Community, our future, and the constitutional links of such vital importance between the component parts of the United Kingdom. I’ve spoken about our policies, our strategy for the United Kingdom, but that strategy is something we can only make together – make together in partnership between Government and industry, Scotland and England, Britain in Europe, Britain and Europe. Those are the partnerships that matter. Those are the partnerships that will build, for this generation and the next, a higher quality of life, a higher standard of living, a more secure present and future than ever we have known at any stage in the past. Those are the ambitions we have. They are ambitions, I believe, that are shared, not just in the instincts of Government Ministers, but in the instincts of businessmen, business women, individuals up and down every portion of our land. Together we can make sure that those instincts can build a better future for all of us.

    Chairman, you are our host, and I have both the privilege and the pleasure of thanking you not only for an excellent dinner, but for a great occasion, and the very great privilege also of inviting everyone to join me in proposing a toast to our hosts this evening.

    The toast – the CBI, Scotland. [Toast]

    The CBI Scotland. [Applause].

  • Mr Major’s Statement after Meeting with Shimon Peres – 8 September 1992

    Below is the text of Mr Major’s doorstep statement following a meeting with Shimon Peres, the Israeli Foreign Minister, on 8th September 1992.

    PRIME MINISTER:

    We have been discussing the peace making process and the progress that has been made, and I think it is a much happier atmosphere that exists and a greater prospect of peace. I have made it perfectly clear that we would do whatever we can to speed that peace process up – not just the United Kingdom but the whole of Europe want to see that peace process make progress so it is in the interests of all the people in Israel and all the people throughout the Middle East.

    People are sitting down and talking now – that is very welcome. It is a credit to both sides that they are doing so. I think it is essential that those talks continue. From time to time there will be difficulties, there will be hitches and set backs but the important ingredient is that those talks are taking place and that those talks continue despite the setbacks that might occur. I believe there is a will there to continue those talks – it has not always been evident, but it is evident now and I think that is a very good sign.

  • Mr Major’s “Europe and the World Speech” – 7 September 1992

    Below are extracts from Mr Major’s opening speech to the UK Presidency Conference on “Europe and the World After 1992” held at the Queen Elizabeth II Conference Centre on Monday 7th September 1992.

    PRIME MINISTER:

    Two weeks from now we will know the result of the French referendum on Maastricht. It is a pivotal event and it is in the forefront of our minds today.

    The Danish referendum has already narrowly said “no” to the Treaty. The combination of that and of a French ‘non’ would be decisive. Without the consent of all twelve Member States the Maastricht Treaty cannot proceed. It would be dead. That is a statement of fact not conjecture. Even if, as I hope, the French vote “yes” the Danish difficulties must still be overcome. And then, across Europe, national Parliaments must approve the Treaty. In the United Kingdom it may have a bruising passage since – uniquely in the Community – we in Britain will scrutinise the Bill line by line, clause by clause and vote on it in the same way. I believe myself that this is a more effective scrutiny than referenda where many votes may be cast on matters wholly unrelated to the Treaty. In Britain we do not face a referendum and, given our Parliamentary procedure, I have no hesitation in rejecting the concept.

    The Maastricht Treaty is a product of compromises by 12 nations. A hard-fought outcome. No one member state regarded it as ideal. But we all regarded it as the right outcome for the development of Europe.

    Overall the Treaty is good for Britain and good for Europe. However, important as Maastricht is, we should not let this particular strand of European development blind us to the other issues before us. Maastricht deserves approval but it is by no means the whole agenda. It is but part of a bigger agenda.

    Now, as all the certainties of a year ago are in question, there is a temptation for onlookers to think that the train could be derailed. I do not believe that is likely or desirable. It can be stalled. It can be sent off in a different direction. But it cannot be halted. The Community cannot fossilise. Europe cannot stand still as the world changes.

    The founders of the Community rightly recognised the destructive force of nationalism. But, in their reactions to that, I believe they did under-estimate the durability of national self interest, national identity and national pride. And they failed to recognise that this is wrapped up in political and economic structures as well as in culture and language.

    This is what has often brought such criticism to the Community despite its achievements. And these are many. The European concept has delivered peace, security and growth over nearly three decades. European citizens know that and few in any country will admit to wanting to dismantle the Community. Even its fiercest critics fight shy of that. But there are concerns about how it develops that European governments must address. Many European citizens fear for national self-identity. Will it be lost? Will their domestic interests be subordinated? Will they forever face frustrating restrictions?

    You could sense that debate in Denmark. It is alive in France. It is an every day currency in the German Laender. It flourishes in the UK: there are instincts rooted here deep in the blood: they are not to be swept away by rhetoric about growth or slogans about unity.

    The Community must show that these fears are phantoms. To do so it must recognise and build on national identity and national pride, not appear to ride roughshod over them. For the reality is that no nation’s identity will ever be lost. Whatever happens in the Community the French will be no less French, the Germans no less German, the Danes no less Danish and the British no less British. No legislation by politicians can wipe away the instincts of nations forged in a thousand years of history even if, as in the case of Britain, that thousand years began with English and Celtic blood freely mixed with Roman, Viking, Saxon and Norman.

    The problem is a political one. The politicians must carry their nations with them. The ten years to 1990 were years of growth, prosperity and confidence and of a favourable climate for developing Europe. In some Community countries the political parties vie one with another to be the most pro-European and they do so because for them the Community has been an undiluted good.

    The Treaty under which we are operating explicitly says that the institutions of the community cannot ride roughshod over Member governments: the governments must all agree before they propose important changes. And then the individual nations, through their democratic procedures, must have the final say. And that is why if Denmark and France, or any other Member States, says “No”, then all must think again. There can be no question of leaving one member behind. Britain would not be party to such an agreement.

    At Maastricht there were other significant developments. The Maastricht Treaty enshrines two very important ideas. The first is that the Community should only do those things which cannot be better done at the level of Member States. That implies scrapping some existing, overbearing legislation, as well as avoiding new, unnecessary regulation. This process, which makes subsidiarity a living concept is vitally important to Member States throughout the Community. The second is that we can act together in unison without necessarily acting within the framework of Community law. This is a revolutionary change. In foreign policy and in matters of interior affairs and justice we shall work together as Twelve within a Treaty framework, but that framework will be distinct from the Treaty of Rome, outside Community law, outside the sole initiative of the European Commission, outside the jurisdiction of the European Court of Justice.

    The fear had always been that if we could not do things as a Community we would revert to doing them on our own, each of us going our separate ways. Now the Maastricht Treaty sets out a new way of cooperation that should reassure the sceptics and build a new cohesion. It is the key to progress. So what would be the position if the Maastricht Treaty was not ratified by all the Member States and could not be implemented? Would all those gains be lost?

    The fact is that you could not set aside the results of a hard fought negotiation and expect to keep all the gains. I believe that what we won at Maastricht is worth preserving. The easiest way to preserve it is through ratification of the Maastricht Treaty. If the Maastricht Treaty is not ratified, the arguments within the Community will not go away. They will have to be gone through again.

    So, over the next ten years, what happens outside the present borders of the European Community will be as important to our development as what happens inside the existing Community. The Community will be joined by countries who have rediscovered their nationhood. It is the nation states of the Community that remain the fundamental political units in Europe. People feel loyalty first to their country. European democracy begins with the traditional institutions that people understand and feel close to; those are the Parliaments, Assemblies, Folketings, Bundestags of each of their own countries. The Community and the countries that make it up are two inseparable sides of the same coin.

    In ten years time, I want to see a series of solid democracies to our east, on the road to prosperity and with the real prospect of EC membership. I want a Europe freer and safer. More open and more competitive, if we can do that, it will perhaps be our most important achievement.

    Maastricht reflects that view of the Community. The achievements won at Maastricht will need to be saved if the Community is to develop as we wish: liberal, open to the outside world, responding to the wishes of its citizens.

    As I intimated earlier, no Treaty is ever perfect: they are all the outcome of a hard negotiation and therefore a compromise. That is true of Maastricht. But if Maastricht did not enter into force the alternative would not be the status quo ante. The real issues which affect the Community: our economic development, enlargement, our response to international events and crisis, all require a response. To be effective that needs to be a response agreed among all of the Member States. Maastricht gives us the means of doing just that.

  • Mr Major’s Speech on Welsh Party Members – 4 September 1992

    Below is the text of Mr Major’s speech made during a lunch in Wales to Conservative members on Friday 4th September 1992.

    PRIME MINISTER:

    Thank you very much. I don’t know why you think I’m busy – it’s quite an easy job really! Not a lot’s going on at the moment! Could I just say firstly what a pleasure it is to be back and to see what the real world looks like outside London. Find out what’s going on. Can I also say right at the outset, how delighted I was firstly, with the quality of our candidates at the General Election, and secondly with the way in which the Conservative Party in Wales fought that General Election in each and every constituency in the Principality. You had some super results. You had the best candidates. We could have done with a few more victories – some were very close. But I don’t have any doubt that providing we continue with the right policies and have the right candidates – especially important, I believe, in Wales – have the right candidates, I’ve no doubt at all that Rod will have quite a few colleagues joining him when next we have a General Election – but I must tell you it is not imminent!

    But you did work hard. You did extremely well, despite the difficulties of the recession, we came out of it with the same number of seats. And had the Opposition vote crumbled in a slightly different way we might have picked up several more seats than we did. On other occasions we’ve had 14 seats with the same number of votes that we had at the last election and only appeared with six seats. We could well have some boundary changes between now and the next General Election! And we will just have to find a bigger bench in Westminster for our Welsh Conservative Members of Parliament in the future.

    And I am confident for another reason as well. Because I do think you have had, and retain at the moment, a remarkably good team at the Welsh Office. There’s been a long string of senior Ministers in the Welsh Office who’ve done, I think, a remarkable job for the United Kingdom as a whole, for the Principality, and of course for the Conservative Party. And David Hunt follows in that tradition. He’s a very old, longstanding friend of mine, and I think he does a superb job, both for the Conservative Party and Wales.

    And you have Wyn Roberts, who occasionally breaks out of Welsh and into English, who I believe was the resident Minister in charge of Wales when William the Conqueror first came here! And I promised my daughter that her children will be able to serve with a Conservative Government and Wyn Roberts one day!

    And Gwilym, who joined us only recently, but who I must tell you has made an absolutely outstanding start to his Ministerial career. I’m very pleased with the Ministers I have looking after Welsh interests, and I can tell you that they may sometimes put the fear of God into the Opposition, and they do exactly the same to the Treasury! And that is, of course, entirely as it should be. Somewhere, sitting outside the realms of the inner markets of politics, Peter Walker will be applauding the fact that they’re putting all the pressure they can on the Treasury, and some things never change, and they’re none the worse for that.

    We’ve had the opportunity this morning of looking round at some of the things that are actually happening in Wales. Stripping away the newspaper headlines, the late-night commentary by reporters straight from university, with no experience, little knowledge but much time to fill. We can see what is actually happening in the world outside the chattering classes of Westminster. Alas, it is not an extinct species.

    And what did I see looking around Wales this morning – and I will come to the difficulties later. But we started off looking at a remarkable firm right at the sharp edge of new technology, developing optical fibres which will revolutionise the way in which we live our lives by the end of this decade. Forget about televisions, telephones, computers that will both receive and send out, that will provide you instantly with all the knowledge of every encyclopedia the world has ever written. The most remarkable progress in technology that we’ve ever seen. Tiny fibres, almost too thin for the mind’s eye to see, that will carry into your homes within a few years – should you be unwise enough to wish it to do so – every conceivable news programme from every conceivable country.

    It is here, in Wales, that the leading edge of that technology is taking place, and you can be proud. On the site of the old Shotton Steelworks, where eleven years ago today we could have stood here with our heads hanging down and said “What is happening to Wales? The great steel industry is breaking down, 8,000 people have lost their jobs and what is their future?” And there they are today, many of those same men and their families, working in a whole series of high tech and medium tech industries, with secure, well-paid careers, no longer dependent on a single industry, and leading Europe and the world with that medium and high technology. That is the change, and it’s not just to be seen on the Shotton site, but dotted about all the way around Wales.

    It didn’t happen by magic. It happened of course because it’s an attractive place to build. Of course, because over the last decade our economy, despite current difficulties, has been revolutionised. But it happened also because Nick Edwards, because David, because Peter Walker, actually went out to America, Japan, and all the way round the world and sold Wales to the world as the place to invest and to build up their industries and commerce. [Applause].

    And then I went to look at something, I suppose, which typifies the hopes and dreams of most of us – a young couple moving into their house – the 10,000th house that Homes for Wales has produced. And I had the opportunity to meet a young couple, he’d just left the army, two young children, moving into their own home, starting a wholly new life in this lovely part of the world.

    And then, at my own request, to see one of the areas of difficulty – hill farming in Wales. And it’s been a novel morning – we’ve been rained on, shone on, wind has nearly blown us over, we’ve been up to our necks in mud and sheep. I wouldn’t have missed a minute of it! And there was one marvellous moment. We were standing there on this hill being blown – if you’ll pardon the expression, I’ll use the expression my father would have used – blown from here to buggery and back again. A mass of cameras over there, and I was standing there with the Secretary of State with this great backdrop of sheep and the wonderful rolling environment and the reporter shouted out “Can we have a crook between you?”

    Discretion forbear! Discretion forbear! And every time I sit there in Westminster, and open the newspaper, listen to the news, listen to the in-talk of the in-crowd, and then you actually come out and see what the atmosphere is like in the country – they are as chalk and cheese. People today were extremely friendly – a whole primary school turning out to say hello – you actually see what the heartbeat of this United Kingdom is really like, when you actually get out and see it face to face. And that is what I want to do. And that is what I want every one of my Ministers to do – to a very substantial part of their time.

    So let us come back to Wales. Somebody once said in Portsmouth, I think it was Harold Wilson. “Why do I talk about the Royal Navy?” “Because you’re in Portsmouth, Prime Minister.” And I suppose that’s true.

    But Wales I talk about it for more reasons than just the fact that I’m in Wales. I talk about Wales for this reason perhaps above all. We are changing, in the Conservative Party – it is changing. It has been a Party that has rolled with the evolution of our instincts for 300 years in a way that no other political party anywhere in Europe has remotely been able to. We can trace our lineal descendancy right back to beginning of recorded politics – those inate instincts which make people Conservative are clear as crystal.

    But just as this country has no written constitution – it has evolved, changed, responded to the needs of the time and the instincts of the people who live there, so has our Party. We don’t have a written set of dogma, a clause 4 which becomes irrelevant as the page changes. We have a series of basic instinctive principles by which we believe people should live, and aspirations which we believe most people themselves have. And we develop them as time moves on. And there is one of those that, to me, is particularly important for the Conservative Party. And it is this. I don’t want the Conservative Party to just draw its strength from the South and the East. I want a Conservative Party that draws its strength in the South West as well, in the Midlands, in the North East, in the North West, in Scotland and in Wales. I want a strong Conservative Party in every single part of the United Kingdom, in time again, not excluding Northern Ireland. Every single part of the United Kingdom. [Applause].

    And that is why in the election we did something which I believe myself was one of the turning points of the last general election. You may recall some way into it we suddenly began to talk clearly and urgently and for days nobody would listen, about the importance of the Union within the United Kingdom. The importance that we were a United Kingdom. And I will tell you what I believe happened, I believe we stretched over the heads of people worried about their mortgage, their prospects and their jobs, and we stretched right into the deepest instincts of the people who live in these islands.

    And we of course are a Unionist Party. We call ourselves the Conservative Party, but in truth we are the Conservative and Unionist Party. And the union here in Wales between England and Wales is the oldest union of all. Older than the Act of Union in Scotland. And our futures are, have been and I hope and pray always will be, inextricably linked. We stand together, we thrive together, we suffer together, we fall together. And for me up here in North Wales that means some things political. It means winning back Delyn, for example. And winning Ynys Mon, which we had not all that long ago. We came within a whisker in April and with your help we’ll get it, Delyn and many other seats the next time.

    Why am I so confident? Not just for the reasons I’ve set out – the candidates, the Ministers – but I think it is not fanciful to say that in recent years Wales has been leading the way with the economic miracle of the 1980s. Who, I wonder, amongst the most venerable in terms of years in this room can last remember when the level of unemployment in Wales was below the national average in the United Kingdom. Not in my lifetime. Very possibly because of the imbalance of jobs in Wales right since the turn of the century, very probably not within the lifetime of anyone here. But it’s the changes in the economy, the inward investment, the £44 bn of inward investment and the 100,000 jobs that have been created that have actually made the difference. And I believe that that difference is doing something that I believe is critically important – it is breaking down that imbalance – what people crudely call the North/South divide. But what they meant by that was the prosperity of the South East compared to every other part of the United Kingdom, and we are breaking that down by lifting up the prosperity of those other parts of the United Kingdom. And that is not only right in itself, it is an instinctively Conservative thing to wish to achieve and to bring about as the very basis of policy.

    So we have more businesses in Wales than ever before. And although one can never be sure on the basis of a few months figures, the indications are that manufacturing output, indeed all output in Wales, is growing far above the levels of nearly every other part of the United Kingdom, and way above the average of the United Kingdom presently. But that is important for many reasons. And the hill farm this morning brought some of them back to my mind. What enables you to preserve cultural traditions, a quality of life, an instinct of preserving the best of what is past and building on it. You don’t do that out of grinding poverty. You don’t do that at a time of need. That’s when your culture and your traditions are thrown to one side. You do that at a time of greater prosperity.

    And yet here is a second strength of the basic, unchannelled instincts of the Conservative. He is a traditionalist. I hear you, I of course mean he or she. He is a traditionalist. He doesn’t want to change something instinctively until he knows there is something better. There is a conservatism with a small “c” embalmed in the instinct of everyone in these islands, however they may vote, whether they call themselves a Conservative or something else.

    And you certainly can’t come to Wales without being aware of your great cultural traditions. You can’t go to the opera, whether its the Welsh Opera, the English National Opera or Covent Garden without seeing the great musical traditions, without finding one or other great Welsh singer leading the way in our musical traditions. After the lunch today, Wyn is taking me – by virtue of some roads for which he will undoubtedly ask for more money! – to the sight of the new Arts and Leisure complex at Llandudno. I’ve no doubt that when there he will talk to me of other matters too. He will talk to me of the importance of the Welsh language. And it is highly likely that he will talk to me in Welsh about it! It might be appropriate if he does!

    And then if I know him – and I’ve known him since I was but a lad, but then haven’t we all! He will also talk to me of local government reform and here I return back to the instincts and the traditions of the British, and in this case the Welsh. Go out there and find me a Welshman, any age, any size any shape any political party who doesn’t want back Pembrokeshire, Monmouthshire, Merionnethshire and Anglesey. [Applause]. Well I’ve got some news for you – you’re going to get them back. [Applause]. Because David Hunt has arranged it.

    Let us not hide our eyes from the difficulties that exist at present. But neither should we overstate them. Neither should we misrepresent them. And I believe both of those latter two things are happening, not least from people within our own Party as well as beyond it. I don’t pretend for a second that for many people across our country in different parts of it that things are easy now. I know it is a difficult time for many businesses. And I understand from personal experience many years ago, how people feel, what it’s actually like to see your security, your family business, perhaps even your home disappear. I certainly recall vividly what it’s like not to know whether you will actually have enough money to last through the week and pay the bills when they come in at the end of them. There is no-one in this country who wants this recession to end more speedily or more adequately than I do, or than Norman Lamont does.

    But I will tell you something else about this recession. I want this to be a lasting recovery. Not a transient recovery. Not a recovery that takes us over the hill and down into the valley and back into exactly the same problems again and again. When we were having lunch Chris said to me, “We got through the election in a recession.” Time after time we’ve been on the way to permanently low inflation, we’ve run up again an electoral timetable, we’ve taken short term action and the problems have recreated themselves. Now we can kill them off for good. We have within our hands for the first time, in my political lifetime, the prospect of licking inflation once and for all and having permanently low inflation.

    It’s only two years ago that people were saying to me there are two great problems – inflation, getting up to 11 per cent is out of control, and stable exchange rates. Just solve that and all will be well. We have inflation at 3.7 per cent and our exchange rates are stable. And of course there are now other requirements that are laid upon us.

    But everyone I think has something about which they care particularly passionately, and I do about inflation. For some it is a slogan. But it is not just a slogan. I will give you two reasons why we should care passionately about inflation.

    The first is to consider what inflation means. Inflation means, particularly for people on fixed incomes – and as people live longer in retirement a higher proportion of our population is on fixed incomes – for every per cent of inflation you erode the living standards of people who are no longer in work and who are living on the savings and the product of their lifetime at work. I say to you bluntly. I regard it as a moral imperative as well as an economic necessity to keep inflation at the lowest possible level to protect the living standards of those people.

    Throughout the 60s and the 70s inflation went through the roof and through the 80s and still in the 90s there are hundreds of thousands of elderly people humiliated and embarrassed because they have social benefits, because inflation tore away the security that they had built up in the whole of their working lives to ensure they didn’t have to go out and ask for help from other people in their retirement years. And I do not want to see that happen to this generation or any future generation. And so we will bear down on inflation.

    But there’s a second reason. We are living in an increasingly competitive world. We may be an island geographically, but we will never ever again be an island economically. What happens in America, or Japan or Germany or France or Denmark affects us directly. Our living standards. We cannot pretend, however much some would wish to, that it doesn’t matter to us and that it will all go away. We are an inter-related world. It is that investment that has created those new jobs in Wales, it is those markets which provide the markets from which those products made in Wales will predominately be sold. And so we have to be efficient. Suppose we had inflation in this country at 4 to 5 per cent and they had inflation in America, Japan, Germany and France at 2 to 3 per cent, what does it mean. It means that they will get relatively well-off, and we will get relatively poor. It means we will lose jobs, living standards and all the sweet things of life, because we will become an uncompetitive society and it will become more difficult year after year.

    Why more difficult year after year? Because all those Eastern nations that once we were able to sell things because they couldn’t manufacture them for themselves now can. Go to Indonesia, go to Korea, go to Hong Kong, go to China; and those captive markets to which we sold things when we weren’t competitive in Europe have gone. Because they manufacture them now for themselves. And either we are successful, or we will fall behind – not just in living standards, but we will fall behind in political influence in building the sort of society at home and abroad that we want to see.

    And I will tell you a third instinct of the Briton. I actually believe, and so do the British nations, that the British instinct is a force for good in international affairs. That force for good is pushed aside and derided if you have an economically weak nation it has no political clout either.

    So we have to deal with those problems. Not because we wish to, but because we have no choice but to do so for this generation and the next. And that is why I am not in the business of soft-options. All my life I have seen Governments driven off a virtuous path of economic revival because things got difficult in the short term. Well we’ve just had an election, and we’re not going to be driven off that virtuous path. And so we are not going to devalue Sterling. We are not going to leave the Exchange Rate Mechanism. We are going to make sure that we get that inflation level down to the level that will secure permanent growth and prosperity for this generation and the next, that I want us to see.

    And let me just say a few further words about it. It’s fashionable, it’s very easy suddenly to say it’s terribly difficult here and to blame somebody abroad and to say if only they’d do something it would all be better. I know what the instinct is in this country, they say of Europe: “Well, they’re foreigners; and of course we should be in the Common Market, it’s very important the Market and we understand all that, but I just wish we could only just sell things to them.”

    Well, that is unreasonable. That is no longer the world in which we live or will ever live again if your face the hard day to day realities that businessmen face. That jobs and businesses in Wales depend on Europe. They depend on the Community. 60 per cent of our trade is with the European Community. And it isn’t just prosperity, it is peace that has been bought. If I may say so without disrespect there are people in this room, as I look around, who will remember the Second War very clearly. They’ll also remember from their history books that it was the Balkans that brought about the First World War, as they look at the events of Yugoslavia.

    But let us say something about the Second World War. The greatest virtue of the Community for all its faults – and I’m no Europhiliac, believe you me, I see all the faults and dislikes of it, but I see its advantages too – when you look at the European Community, what is its greatest thing? Is it the growth that it has over 30, 40 years brought to Europe? No, it isn’t. What it is is that it has so intertwined the trading of those great Western nations that it is inconceivable that nations that twice fought the whole world at war would ever be in military conflict again. And that is why we want to extend that Community across Eastern Europe, so that we bring in those newly democratic nations – The Czechs, the Slovakia, Hungary, old friends of ours. Bring them over time into the Community so that we can extend that impossibility of conflict right the way across eventually our continent of Europe. A course to the North, to the Scandinavians, a course down to Austria and then to the Eastern part of Europe.

    Those are the policies that we must pursue in the long term. And if we pursued them successfully it will mean something that I think would be valuable to all of us here. It would mean that our children and our grandchildren would never live under the threat of war that many of the people in this room have lived under and in some cases experienced for much of their lives. It is a long policy, but it is the right policy and it is a Conservative policy, for it is instinctive for the Conservative Party to look beyond one generation. We are not a mono-dimension Party. We are the only Party in this country and the Party most fitted anywhere in Europe, to look down cascading through the generations and frame policies now that will bear their greatest fruit long after we have ceased to have any direct influence on them. And I think that is what is happening in Europe at the moment, despite the frustrations that many feel about it.

    I’ll tell you why we won on April 9th. It was become in some remarkable subliminal way those instincts communicated themselves to people. For all the difficulties that there were with the recession, that heaven alone knows is now stretching to every part of this world, there was the belief that people would be safer with us. Safer economically and safer in other ways. And I think that is because our Party understands the instincts of the British. They want to keep more of what they earn. They want its money to keep its value. They want low inflation and low taxation. They want the kind of choices and opportunities that their parents only dreamed about and they know that their children will want for their children opportunities that were denied to them.

    They want better education. They want an absolute determination to concentrate on the basics of education – Neighbours out, Shakespeare in – which is the basic instinct of the Conservatives in this country. And they want people to read, to write, to learn to do sums, then they want to put them in the Treasury! They want a Britain where people with talent and who work hard can go all the way to the top no matter what their background or where they may have started from. That is what they want in this country.

    And then they want something else – two things I think. They want a Britain where after a lifetime’s hard work they can pass on what they have built up to their children and grandchildren, and not pass on what they have built up to the taxpayer. [Applause].

    And they want a Britain safe at home and respected abroad.

    So we can take this opportunity – there’s only a transient opportunity in politics – to celebrate that victory on April 9th. But the best way to celebrate that victory on April 9th is to make use of it. To make use of it to build those things we care about. To stick with them firmly, rigidly, with conviction but with understanding even when times are difficult, for that is the way we believe we can build something better for ourselves and for future generations. For if I may come back almost to where I started, that is the instinct of the Conservative, and we are Conservatives and that, I promise you, is the instinct of your Government.

  • Mr Major’s Tribute to Dickie Bird on “This Is Your Life” – 3 September 1992

    Below is the text of Mr Major’s tribute to Dickie Bird on “This is Your Life”, recorded on Thursday 3rd September 1992, and shown on 7th October 1992.

    PRIME MINISTER:

    Hi Dickie! Good evening!

    Cricket has thrown up many great characters over the years and you have become one of them. Everyone in cricket respects you as an umpire; millions of people beyond cricket know you, have heard of you and go to watch you at cricket matches as well as the players. In the long line of cricket umpires there is one direct line of real importance – from Frank Chester to Dickie Bird, both the best.

    Well done! Have a great evening!

  • Mr Major’s Comments at London Conference – 27 August 1992

    Below is the text of Mr Major’s comments at the media briefing during the London Conference, held on 27th August 1992.

    PRIME MINISTER:

    Over the last few days, we have had co-operation and I believe we have achieved significant results.

    The first result will be new negotiations for a settlement, starting in Geneva next week, under the Chairmanship of the United Nations and the European Community.

    The talks will be on the basis of clear principles on which all the participants, without exception, have subscribed.

    That means that the Yugoslav parties have pledged themselves to a code of conduct.

  • Mr Major’s Speech to the London Conference – 26 August 1992

    Below is the text of Mr Major’s speech made at the London Conference on Wednesday 26th August 1992.

    PRIME MINISTER:

    May I firstly welcome you all to the London Conference, a conference sponsored jointly by the United Nations and the European Community. I think no explanation is necessary to the people present today as to why we are here or to the size of the problem that lies before us. What we are hoping from this conference is that it will prove to be a decisive turning point, that it will mark a decisive new phase in the search for the peace in the former Yugoslavia territories that all of us wish to see.

    What I fear we can see daily as we look around is the tragedy of Yugoslavia unfolding and throughout the world all our fellow citizens in each of our individual countries have seen the waste, the despair and the growing danger of the continuing conflict in Yugoslavia.

    In this room are the people who can stop this war, end the bloodshed, reach a lasting settlement. I do not believe that world opinion will readily forgive anyone who impedes that work over the next couple of days and beyond.

    The people that we represent at this conference have been appalled by the destruction, the killing, the maiming and the sheer cruelty which has disfigured the former Yugoslavia. We all seek a just peace and against that background it seemed to the Secretary General and to me that the United Nations and the European Community should join together in holding this conference.

    Fortunately, we will not be beginning our work from scratch. The European Community has given monitors and sponsored a peace conference. Lord Carrington, to whom I pay a very warm and very well deserved tribute, has made substantial progress and we should build on that. The United Nations has passed resolutions bringing in an arms embargo on Serbia and Montenegro. Ten days ago the Security Council agreed that all necessary measures could be used to deliver humanitarian aid. The UN agencies have supplied and distributed emergency aid and cared for refugees and individual countries, many represented here today, have contributed too, often by taking in large numbers of refugees.

    But I think we have all felt that the time has come to broaden and to intensify our work. And let me suggest to you, as co-Chairman, how I believe we should tackle that task.

    Firstly, humanitarian help. Even if peace were achieved tomorrow, hundreds of thousands of people would still be involved in hunger, sickness, desperation, and those problems are bound to worsen as winter approaches.

    The United Nations High Commissioner for Refugees estimates that some two and a half million people remain in the former Yugoslavia and over one and a quarter million of these will depend on outside help with shelter, food and medicines to see them through the coming winter. Without that help many of that 1.3 million may not survive. And this is not a natural disaster we are dealing with, it is a man-made disaster and it needs a man-made solution and this conference can make its contribution to that.

    We must ensure that humanitarian supplies are distributed to the victims of this conflict, particularly those victims still trapped in the war zones in Bosnia. I believe that the humanitarian agencies have done an outstanding job, they have put their lives on the line to assist in the survival of others. The Security Council Resolution 770 is a guarantee the international community have given that we will not leave the United Nations and its agencies without help and protection in the task they have overtaken.

    It cannot be done by force but it must be done in safety. And that is why my country and others are willing to provide armed escorts to help the relief convoys on their missions of mercy. We have no hostile intent to any party in Bosnia, but I have to say to the conference that we will not be deflected from our determination to deliver aid wherever it is needed.

    And thirdly, therefore, we must work for peace with justice with as much energy as we relieve those already suffering from war as a result of injustice. It is clear that we need a peace process and that this should be coupled with the necessary international pressure to bring success.

    That peace process is vital but it must be based, I believe, on certain fundamental principles. The first is that frontiers cannot be altered by force, the international community will not accept that Bosnia can be partitioned by conquest. Those who suppose they can secure international acceptance of military advantages gained by force are mistaken in that judgment.

    The second principle is that within those fixed frontiers minorities are entitled to full protection and respect to their civil rights, this applies universally whether in Bosnia, Croatia or Serbia. And those two principles go together, neither can be effective without the other.

    And so the principles and how we hope to achieve them are set out in the two key documents which I hope the conference will adopt. The statement of principles sets out the basic international standards which must govern a settlement, I cannot believe after further discussion that any of us here will not be able and prepared to subscribe to it.

    But what counts of course is not just the acceptance of those principles but the subsequent application of those principles and they are in reality not being completely fulfilled by any of the main parties to the crisis at present.

    We must therefore help the parties to come closer to doing so and that is the purpose of the work set out in the action programme. This conference will remain in being and will remain active. Its work will be handled in partnership by the United Nations and the Presidency of the European Community and in addition we urgently need a high level international task group to tackle each main problem that we face. Those task groups will build on the work already done by the European Community peace conference and the United Nations. They must then get down to work energetically and unremittingly on the problems they have been set and we must also strive for further practical progress during the conference on various key questions – humanitarian issues, confidence-building measures and the implementation of the UN Security Council resolutions.

    We shall also be looking tomorrow at two further documents. These are the draft statements, one on Serbia, one on Bosnia. I hope that all parties will be able to adopt them. Like the statement of principles, they should be uncontentious. We believe, for example, that they are consistent with Mr Panic’s recent letter to the United Nations Security Council which struck a note of realism and of moderation.

    It is essential that this is followed up in deeds as well as in words and if all the Yugoslav parties at this conference, including Serbia, are prepared to subscribe to the draft statements this will be an encouraging sign. And if not, if not, the world will be entitled to doubt the goodwill of those who stand out against it and to draw the appropriate conclusions.

    What are those conclusions? Those conclusions must mean bringing pressure to bear on governments or factions which do not abide by those principles. That in turn means sanctions. We need to enforce them more effectively and if necessary intensify them and that will be an inevitable issue at this conference and perhaps beyond it too.

    No-one should under-estimate the anguish that is felt around the world at the events that unfold daily. The different former Yugoslav delegations, and in particular I think those from Serbia and Montenegro, must ask themselves this question: Do you wish to be considered as part of Europe? Do you wish to belong to the world community? If so, good, but that does mean accepting the standards of the rest of Europe and of the world community.

    In this conference and beyond it we are ready to work with the republics of the former Yugoslavia to settle the final new constitutional arrangements in accordance with the principles set out. Our aim is to take into account the legitimate interests of all parties. Parties who choose to ignore settlement by negotiation will find no support from other governments or international organisations. All the countries and organisations who have a role to play are represented here today at this conference. They will all set out their own view but I believe there is a common determination.

    For those who accept negotiation, and that means a willingness to make concessions and a genuine desire to find compromises, we have everything to offer. We will speed up your integration into the international community, we will begin with reconstruction aid, we will offer economic help through trade agreements, through export credits, through a full partnership in Europe. But if we do not get cooperation, the pressure will inexorably increase, condemnation, isolation, parties who stand in the way of agreement can expect even tougher sanctions, even more rigorously policed. No trade, no aid, no international recognition or role. Economic, cultural, political and diplomatic isolation. Those are the choices.

    So I see our task at this conference as ensuring humanitarian help, restoring respect for human rights and setting in hand a process which will lead to a just and enduring peace by agreeing on the necessary principles, on the pressures needed to put those principles into effect, and on the intensive programme of work needed to bring our process to success.

    That is what lies ahead of us at this conference and in the continuing work that may follow it. This I hope will prove to be a decisive break towards peace in the former Yugoslavia and that, I hope, is why everyone who is here has chosen to attend.