The Rt. Hon. Sir John Major KG CH

Category: 1992

  • PMQT Written Answers – 21 October 1992

    Below is the text of the written answers relating to Prime Minister’s Question Time from 21st October 1992.

    PRIME MINISTER:

     

    Yugoslavia

    Mr. Madden : To ask the Prime Minister what is the total, to date, of the financial assistance given by Her Majesty’s Government to fund the cost of maintaining refugees from the former states of Yugoslavia; what is the total, to date, of financial assistance given by Her Majesty’s Government to fund humanitarian relief in the former states of Yugoslavia; and what proposals Her Majesty’s Government have for increasing the United Kingdom contribution.

    The Prime Minister [holding answer 19 October 1992] : I announced yesterday an additional bilateral British contribution of £15 million in the light of reports from the International Committee of the Red Cross and the United Nations High Commissioner for Refugees. This brings Britain’s total commitment of humanitarian aid for victims of the conflict in former Yugoslavia to over £70 million; of this, £29.5 million is bilateral aid and £41 million our share of European Community actions.

  • Mr Major’s Comments on Coal Mine Closures – 20 October 1992

    Below is the text of Mr Major’s comments on coal mine closures, made in an interview on Tuesday 20th October 1992.

    QUESTION:

    [Mr Major was asked if he was retreating on the coal mine closures].

    PRIME MINISTER:

    No, I don’t think it is the case in that way at all. What you have seen is a fundamental shift in understanding of what we intend. A very frenetic atmosphere yesterday and I think many of the implications of the moratorium simply weren’t understood but it was never out intention that during the moratorium there should be anything other than a full examination of all these matters. It is right that there should be.

    QUESTION:

    [Mr Major was asked why Michael Heseltine hadn’t admitted the DTI Select Committee should examine the issue].

    PRIME MINISTER:

    That is a matter for the Select Committee, it is not a matter for the Government. The Select Committee are independent of the Government, they were set up for that reason, but it was never a practical likelihood that one wouldn’t have a change of policy to deal with the difficulties of the pits and then not have a proper examination by a Select Committee. It is right there should be. It never occurred to Michael Heseltine or indeed anybody else that this wouldn’t be a matter that the Select Committee would properly look at.

    QUESTION:

    [Mr Major was asked why Michael Heseltine was saying only minor changes would be considered].

    PRIME MINISTER:

    We didn’t suddenly scratch our heads and decide that this was the right policy. There are some very economic realities. Pit reductions and jobs disappearing in the mining industry isn’t a new phenomenon. During every year in the 1970s, for example, under both governments, governments of all sorts, ministers of all sorts, there were 30,000 jobs lost every single year and is because the demand for coal has been contracting over a very long period of time. That economic reality remains the same today.

    QUESTION:

    [Mr Major was asked if there was hope].

    PRIME MINISTER:

    We are having a moratorium; the pits aren’t closed and our minds aren’t closed. What we will seek to do is to open up the possibility for people to make representations, to make their case. If the miners want to make a case with professional help and make that case to the President of the Board of Trade, they can do so.

  • PMQT – 20 October 1992

    Below is the text of Prime Minister’s Question Time from 20th October 1992.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Jacques Arnold : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

    The Prime Minister (Mr. John Major) : This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

    Mr. Arnold : Bearing in mind my right hon. Friend’s commitment to putting Britain first, will he confirm that the Government attach priority to getting this country out of recession and creating jobs?

    The Prime Minister : All across Europe and beyond, economic circumstances are very difficult and in recent months have worsened noticeably in a number of countries. We are seeking the right policies to bring back not just recovery to this country but recovery with low inflation. The interest rate reductions that we have been able to make and the increasing competitiveness of the exchange rate will enable us to lead this country back to recovery with the low inflation and sustained growth that we need.

    Mr. Bell : In the light of the statements made by the president of the Bundesbank and by the chairman of the Italian central bank that a general realignment was available to the British Government prior to Black Wednesday, will the Prime Minister answer the question that his Chancellor of the Exchequer failed to answer when he appeared before the Treasury and Civil Service Select Committee or at the Dispatch Box? Was there or was there not a general realignment–either formal or informal–on the table?

    The Prime Minister : I am happy to answer that categorically. No, there was not–formal or informal.

     

    Q2. Mr. Adley : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

    The Prime Minister : I refer my hon. Friend to the reply that I gave some moments ago.

    Mr. Adley : Referring to matters that are in the minds of right hon. and hon. Members, does my right hon. Friend accept that there is some linkage between electricity privatisation and the current problems in the coal industry? This morning I heard from British Rail that if the proposed mine closures go through, British Rail will face a bill in excess of £200 million in terms of lost revenue and redundancy payments. Will my right hon. Friend please give a clear assurance that if there are to be any further privatisations, either of industry or of the nation’s transport infrastructure, a full cost-benefit analysis will be provided to the House so that it may assess the full national implications?

    The Prime Minister : Many of the problems faced by the coal industry — those that it faces at present and those that it has faced over many years–preceded privatisation. They have far more to do with the demand for coal and the changing energy market in this country. It is for that reason that there has been a severe contraction of the coal industry, not only in this country but in France, Belgium and Germany, and elsewhere.

    As for my hon. Friend’s specific question about the railways, the White Paper published in July was preceded by a great deal of thought, discussion and consultation inside government, and consultation continues on all matters.

    Mr. Ashdown : Having been found out seeking to close down the coal industry quickly by rigging the market, are not the Government now asking to be allowed to close down the coal industry slowly by rigging a review? Is that not the proposition that their Back Benchers are being asked to swallow?

    The Prime Minister : No, that is not an accurate reflection of the policy that the Government are following–as yesterday’s statement by my right hon. Friend the President of the Board of Trade made perfectly clear. No one doubts, and no one has disputed, that over many years, under all Governments, there has been a continuing and severe contraction of the coal industry, owing to factors that were unavoidable.

    The Government now face the fact that, even at existing coal prices–which we are now aware will be noticeably lower in future–the market is contracting, and coal stocks are growing daily. The Government cannot ignore that problem. The sooner they deal with it, the sooner we shall be able comprehensively to establish assistance measures that will provide alternative employment and alternative security in areas where people know that existing jobs have at best only a limited life.

     

    Q3. Dr. Spink : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

    The Prime Minister : I refer my hon. Friend to the reply that I gave some moments ago.

    Dr. Spink : Will the Prime Minister join me in welcoming the 1 per cent. cut in interest rates that was made on Friday, which will do so much to help all the people who have to repay mortgages and to help businesses, large and small? Does he agree that the key to resolving our unemployment difficulties and taking us out of the teeth of the world recession is low inflation, which we are achieving?

    The Prime Minister : We have now achieved low inflation in terms of both the retail prices index and the underlying inflation rate, at a level that we have not seen for many years. It is undoubtedly helpful to British industry that it has been possible to reduce interest rates to 8 per cent. I was particularly pleased by the consequential mortgage rate reductions that were announced today.

    As my hon. Friend suggested, however, we must bear it in mind that it is not simply a question of low interest rates. It is also vitally important for our future prosperity to restrain any reinflationary surge that may follow. My right hon. Friend the Chancellor of the Exchequer has made it clear that keeping inflation low–one of the essential ingredients for the sustained encouragement of jobs, prosperity and growth–remains central to the Government’s policy.

    Mr. John Smith : It is crystal clear that, whatever else he did yesterday, the President of the Board of Trade did not announce a review of the pit closure programme. Will the Prime Minister now agree to establish a genuine and independent review before any pit is closed for ever?

    The Prime Minister : So that there is no dispute or misunderstanding anywhere in the House, let me make clear the position of the 10 pits identified by my right hon. Friend, and that of the others that he mentioned in his statement. In our judgment, the 10 pits that he specifically named have no sustainable economic future, but the full statutory review procedure will take place. I have no doubt that, during the moratorium on the other pits, the Select Committee on Trade and Industry will wish to hold its own inquiry, and the Government will give that their fullest co-operation.

    During the moratorium, the President of the Board of Trade will himself take views and evidence to consider alongside the information already available to him on all matters. In due course he will publish that material, in time for consideration by the House and before any future debate in the House. His statement will be set in the context of the Government’s energy policy and will set out the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. It is after that debate that future decisions will be made.

    Mr. Smith : I remind the Prime Minister of the question that I asked him, which was whether he would establish a genuine and independent review. If the Prime Minister really believes that he has a strong case, what has he to lose from an independent inquiry? What is he afraid of?

    The Prime Minister : Let me refer the right hon. and learned Gentleman to the answer that I gave. When we have completed the consultation and the examination–which, I repeat, will be made public and which, I repeat, will also be laid before this House–there will be every opportunity for every view to be taken into account before matters proceed.

    Mr. Smith : Is it not now clear that the only satisfactory alternative to constantly shifting statements from the Prime Minister and the President of the Board of Trade, and to the unseemly Dutch auction which is going on among Conservative Back Benchers, is for this House tomorrow night to vote to refer the whole matter to our own Select Committee and for that to be the responsibility of Members in all parts of the House?

    The Prime Minister : It is clear that the right hon. and learned Gentleman was not listening, for I said that it was an assumption of the Government that the Select Committee on Trade and Industry would wish to consider this matter and that we would provide whatever evidence was necessary to the Committee. Notwithstanding the tremendous emotions that have arisen about this whole affair, it is bogus of the right hon. and learned Gentleman not to recall the vast number of mines that were closed by the Labour Government, the large number of miners who were put out of work by his Government and the activities of his Government in recent years that played a significant part in reducing employment in the mining industry from 700,000 down to the present level.

    Sir Patrick McNair-Wilson : Is my right hon. Friend aware that the concern that is being expressed about the closure programme is very much bound up with the wider concern about the direction of our economy, post-ERM? Does he not agree that with a low value for sterling it really is essential that we have a policy of import substitution, of “Buy British”, and that we should not build gas-fired power stations when we have already got 50 per cent. too much gas generating capacity? If my right hon. Friend were to put those facts into the review, he would find that he had the enthusiastic support of people like myself, who are deeply concerned about what is being proposed.

    The Prime Minister : I agree entirely with my hon. Friend that the changing level of the exchange rate offers the most remarkable opportunities for British exporters and also offers a better incentive for import substitution than we have seen for many years. My hon. Friend also needs to remember that we are by instinct a trading nation and that we must bear that in mind in all the policies that we follow. As I made clear a few moments ago, what the Government are seeking to do and will continue to do in the period up to and including the public expenditure round is to look at the difficulties that this economy faces and at the right possibilities and the right policies, in order to build on present economic circumstances a proper level of growth for the British economy and for British industry.

     

    Q4. Mr. Andrew Smith : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

    The Prime Minister : I refer the hon. Gentleman to the reply that I gave some moments ago.

    Mr. Smith : Can the Prime Minister understand that it is my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) who has spoken for Britain? Can the Prime Minister name one independent expert who is prepared to say that gas will produce cheaper electricity than coal? The President of the Board of Trade could not name one yesterday. Can the Prime Minister name one this afternoon–yes or no?

    The Prime Minister : If that were not the case, perhaps the hon. Gentleman could explain to the House why the demand for gas among consumers across the country is rising dramatically and shows signs of rising even further.

    Mr. Rathbone : Despite all the difficulties being faced at this moment by this country and by other countries, will the Prime Minister give the House and the nation reassurance that we shall continue our efforts to aid countries in the developing world which suffer even greater difficulties than we do?

    The Prime Minister : We have a very proud record indeed in that respect, in terms of the quantum of aid that we provide, in terms of the quality of aid that we provide, and in terms of keeping open markets in this country for the exports of those countries which, in many ways, is the greatest assistance that we can provide to the developing world. In my statement in a few moments on the European Council, I shall also set out some extra help to other countries which face particular needs at present.

  • Mr Major’s Commons Statement on the Birmingham European Council – 20 October 1992

    Below is the text of Mr Major’s statement in the House of Commons on the Birmingham European Council, made on 20th October 1992.

    PRIME MINISTER:

    The Prime Minister (Mr. John Major) : With permission, Madam Speaker, I shall make a statement about the European Council in Birmingham on Friday last. My right hon. Friend the Foreign Secretary and I represented the United Kingdom.

    I should like to thank the city of Birmingham, its leaders and its people– [Interruption.]

    Madam Speaker : Order. I know that hon. Members who are leaving the Chamber have business elsewhere in the House. Will they leave quietly so that we can hear what the Prime Minister has to say?

    The Prime Minister : I should like to thank the city of Birmingham, its leaders and its people for the effectiveness and speed of their organisation of the European summit.

    Following the events in the financial markets a month ago, a number of EC member states asked for this meeting to help to restore confidence throughout the Community and to address the issues raised by the market turbulence. Amongst those concerns, clearly evident in the referendums in Denmark and France, was the unease that too many decisions were being taken centrally in Brussels. The summit conclusions on these and other issues are in the Library of the House.

    Let me deal first with economic and monetary co-operation. At Friday’s meeting we reaffirmed our commitment to pursue open market policies, to control budget deficits, and to reduce inflation. It was unanimously agreed that these are the basis for recovery and for the creation of new and lasting jobs here and in the Community as a whole.

    The European Council also reaffirmed the necessity of the work set in hand by Finance Ministers after the recent turmoil in the currency markets. It was agreed that the work will involve Finance Ministers, the Monetary Committee, Central Bank governors and the Commission. It will cover recent economic and financial developments in Europe and the implications of changes in the economic environment in recent years. In particular, it will look at the impact of the increasing size and sophistication of financial markets and greater capital liberalisation.

    One critical discussion concerned the negotiations for a general agreement on tariffs and trade Uruguay round settlement. Over the past two weeks, significant progress had been made between the Commission and the United States in all sectors of the negotiation. I asked Commissioner Andriessen to report to the European Council. At the end of our discussion, the Commission was given the authority to continue to negotiate with the intention of reaching a satisfactory conclusion within the next 10 weeks. Subsequently, further useful progress was made in talks in Canada over the weekend. A GATT settlement would make a vital contribution to recovery and would be very much in Britain’s interest. According to the Organisation for Economic Co-operation and Development, it would lead to an extra $200 billion in annual world output.

    In the Birmingham declaration we also took significant steps towards bringing the Community closer to ordinary people. The declaration agreed at Birmingham has a number of distinct elements. It recognises the importance of national identity. It acknowledges that the Community can act only where member states have given it the power to do so in the treaties. It lays down that action at the Community level should happen only when necessary. It calls for new guidelines, so that when Community action is taken it takes the lightest possible form. It introduces better consultation by the Commission before proposals are brought forward. It calls for a greater role for national Parliaments in the work of the Community.

    The declaration provides, for the first time, a proper framework for the practical definition and implementation of subsidiarity. We agreed that, at the Edinburgh European Council in two months’ time, we must make a reality of that principle. All members of the European Council agreed to take decisions at Edinburgh to make subsidiarity an integral part of future EC decision making. That change of attitude by the Council and the Commission is as important as the procedures and criteria to be introduced.

    Prime Minister Schluter of Denmark reported to the European Council on the present state of discussion on the Maastricht treaty within Denmark. The Danish Government have published a White Paper and will produce specific ideas shortly. It remains their aim to ratify the treaty, and we plan to set in place at Edinburgh the framework that will allow them to do so.

    The Birmingham Council also gave us an opportunity to review our action to relieve suffering in Somalia and Yugoslavia. The Community has given a lead in both countries. In Somalia we called for an immediate ceasefire to allow for the rapid deployment of United Nations troops and for the distribution of aid and agreed to try to expedite these deployments.

    In Yugoslavia, at British initiative, a Community humanitarian force will be established. It will support the United Nations High Commissioner for Refugees in delivering humanitarian aid. The Community will speed up aid already pledged, which includes 120,000 tonnes of food. We have invited the United Nations High Commissioner for Refugees to hold a meeting of experts as soon as possible to make sure that that aid gets through without delay. There will be a follow-up meeting in a few weeks’ time to ensure that effective action is being taken. Member states also pledged further staff and resources to strengthen the UNHCR effort. I can today announce a further £15 million of bilateral aid to provide 22 more trucks, 10 Land Rovers, shelter, medical supplies and personnel. Deliveries will start very shortly.

    A confident and successful Community is a vital interest of this country. Sixty per cent. of our visible trade is with the Community. Much of our external investment comes from the Community. Eight of our top 10 trading partners are in the Community. With less than three months to go to the completion of the single market, which could raise Community output by more than 4 per cent., it was vital to re-establish confidence in the interests of stability, recovery, growth and jobs in all our countries. The Birmingham European Council did precisely that.

  • PMQT Written Answers – 19 October 1992

    Below is the text of the written answers relating to Prime Minister’s Question Time from 19th October 1992.

    PRIME MINISTER:

     

    Pitchford Hall

    Mr. Dalyell : To ask the Prime Minister (1) what representations he has had on Her Majesty’s Government’s response to requests to take into public ownership Pitchford Hall and its contents in Shropshire;

    (2) what discussions Her Majesty’s Government have had with (a) Lord Rothschild of the National Heritage Memorial Fund, (b) Hugh Stirling of the National Trust and (c) Jocelyn Stevens of English Heritage on the future of the contents of Pitchford Hall in Shropshire.

    The Prime Minister : I have written to the hon. Member and have placed a copy of the letter in the Library.

     

    Racial Harmony

    Mr. Allen : To ask the Prime Minister (1) if he will use the United Kingdom presidency to promote a European Community directive on racial harmony;

    (2) what steps he has taken under his presidency of the European Community to promote racial harmony in the Community.

    The Prime Minister : The Government are opposed absolutely to discrimination on grounds of race. This position is reflected in all our discussions with our European partners on these matters. The detailed legislative arrangements in other member states are, however, a matter for them, taking account of their particular circumstances.

    During the United Kingdom presidency the Government will be taking any appropriate opportunity to encourage our European Community colleagues to consider best practice in combating racial discrimination. One such opportunity will be the equal opportunities conference to be hosted by the Department of Employment in Birmingham from 7 to 8 December.

     

    Classless Society

    Mr. Allen : To ask the Prime Minister what proposals he has brought forward in his presidency of the EC to realise a classless society.

    The Prime Minister : The Government’s policies are aimed, and will continue to be aimed, at widening opportunities for all members of society. The education, health and other public service reforms, including the citizens charter, will take this process forward during our presidency of the EC and beyond. A European conference on public services and the citizen will be held in London in December as part of the United Kingdom presidency.

     

    Olympic Games

    Mr. Alfred Morris : To ask the Prime Minister if he will make a statement detailing the Government’s financial commitment to Manchester’s Olympic 2000 bid and the timing of its implementation.

    The Prime Minister : On 26 February I announced a £55 million support package for Manchester’s Olympic 2000 bid. Of this, £53 million is towards the provision of facilities in advance of the nomination and £2 million is to support the bid itself. The International Olympic Committee will decide the host city in September 1993. If Manchester’s bid is successful, the Government will contribute to the provision of necessary facilities for the games.

  • Mr Major’s Doorstep Interview in London – 19 October 1992

    Below is the text of Mr Major’s doorstep interview at Downing Street, London, before a Cabinet meeting on Monday 19th October 1992.

    PRIME MINISTER:

    I called a meeting last night of senior colleagues and interested ministers. We discussed the question of the coal problems for two to two and a half hours. The purpose of this morning’s Cabinet meeting is to consider the conclusions we reached on that occasion and after the Cabinet meeting Mr Heseltine will announce the outcome of that in the House this afternoon.

  • Mr Major’s Joint Press Conference with Jacques Delors – 16 October 1992

    Below is the text of Mr Major’s joint press conference with Jacques Delors, held in Birmingham on Friday 16th October 1992.

    PRIME MINISTER:

    Can I, before I turn to the substance of today’s European Council, express my thanks to the City of Birmingham for their hospitality and for the use of these splendid facilities here today. It has been the first time that the government have had a conference of this sort in Birmingham and I would like to express my thanks to everyone concerned for the splendid way in which the organisation has worked.

    May I now turn to the substance of the European Council and the reason it was called. Let me begin by painting the picture behind it. Last year nearly 60 percent of Britain’s visible trade was with our European Community partners. Half of the external investment in the United Kingdom comes from within the European Community. Eight of our top ten world trading partners are members of the European Community. And I mention those figures to illustrate how vital the Community is for our prosperity, for our economy and for our jobs. And I think you will find the same picture in each and every one of the European Community nations.

    In the last few weeks the very difficult situation of recession has been compounded by massive turbulence on the Foreign Exchange Markets. Those two things combined dealt a body blow to confidence, not just in the United Kingdom, but in many areas right throughout the European Community. It was above all confidence that we needed to restore. That was why there was a request from a number of European partners for the European Council we have had today and that was why I called the meeting.

    Every single issue that we have discussed today has an important bearing on the successful development of the Community. And that is especially vital just three months before the single market comes into force; a market which could, when it is in force, bring around 5 percent extra growth in European Community GDP. And so the outcome of the meeting in the Birmingham Declaration and in our conclusions is of importance to our future and to our prosperity.

    Let me start with economic and monetary cooperation. Firstly, we have reaffirmed our determination to reduce inflation, to control budget deficits and pursue open market policies, not I emphasise just for their own sake but because each of us in the Community believe that that is the basis for recovery, the basis for social and economic cohesion and the basis for the creation of new and lasting jobs.

    Secondly, we have all put our authority behind the work set in hand by Finance Ministers following the recent turbulence in the currency markets. We believe that is important and we believe Finance Ministers and Bank Governors are the right people to carry it out.

    Thirdly, we have endorsed the progress made by the Commission in negotiating a settlement of the Uruguay Round and we have given them authority to work for a conclusion to that round by the end of this year. And I cannot stress how important such a settlement would be for recovery – an extra 200 billion dollars in wealth created every 10 years – that is the scale of the prize that hangs there if we can get a successful outcome to the Uruguay Round.

    Fourthly, we have in the Birmingham Declaration taken important steps towards giving the Community back to the people to whom it is answerable. That I think when people study the declaration will meet many of the concerns that have been expressed not just in the United Kingdom but in France, in Denmark and in countries right across the Community.

    And fifthly, we have taken a significant initiative to set up our humanitarian aid to Yugoslavia.

    In our discussions today right the way round the table there was a real sense that the success of the Community depends upon decisions being taken as close as possible to the individual Community citizens. President Delors in a presentation today highlighted a number of new commitments by the European Commission:

    – firstly, Community legislation should be more limited, should be clearer and should be better explained;

    – secondly, there should be more consultation by the Commission, we have in mind by White Papers and by Green Papers, a system of consultation very familiar to us in the United Kingdom and very welcome;

    – and thirdly, a Commission work programme each year which national parliaments would each and all be able to discuss. And Commissioners also should be designated to liaise with each national parliament.

    A common theme in the interventions by the European Community Heads of Government was that we should move together as a Community of Twelve, I emphasise that, a Community of Twelve, no inner core, no fast track, no slow track, no-one left behind, no inner groups, that was a constant theme of our discussions this morning.

    In our discussions a number of practical suggestions were made as well. I illustrate perhaps just two. President Mitterrand suggested we should hive off some decisions which had gone too far and should look between now and Edinburgh for specific examples of issues which need not be dealt with at the Community level. Chancellor Kohl, if I may give another example, urged the need for decisions to be taken at the level appropriate to that decision. And everyone had in their mind in those remarks the sort of unnecessary interference which all of us – the Commission, the Council, all of us – must now do our best to stop.

    All of that is set out in the declaration in what I hope will be seen by people not as legal language but as a simple straightforward easy to read guide to the sort of objectives we are going to seek. We are looking for a more open Community, a Community that respects national traditions, a Community which only acts where member states have given it the power to do so and then only when it is necessary to do so, a Community which has the lightest possible form of legislation with maximum freedom for member states.

    Those are some of the principles we have agreed today and those principles that we have agreed today will be translated into concrete action by Edinburgh. Some of the work is in hand, more of it will be put in hand so we can reach firm decisions, not pious hopes, firm decisions by the time we get to Edinburgh.

    In coming to Birmingham today the European Council has brought Europe right to the heart of Britain, I thoroughly welcome that. It is through Europe that the economic lifeblood of our country increasingly flows these days. We shall soon have a single market of over 350 million people in the European Community. Outside the Community other countries – Austria, the EFTANS, in due course some of the East Europeans – all wish to join the European Community. The market over time will get progressively bigger, progressively more valuable and progressively more vital to our national interest and the national interest of every European nation.

    After the squalls of the last few weeks it was necessary for us to meet and re-set our course, re-emphasise what it was we were about. There are difficult times now in each country in the European Community. And so today’s meeting was not just about the Maastricht Treaty, it was not just about subsidiarity, bringing things nearer to people, it was about reaffirming and re-ensuring an open Community that is open and viable politically and viable economically. That was what was in the minds of the Heads of Government, the Commission and everyone else present today and it was on that basis that we reached the decisions set out in our Council conclusions and in the three declarations – the Birmingham declaration and the declarations on Yugoslavia and on Somalia – which no doubt you have seen by now.

    1. DELORS:

    Ladies and Gentlemen, now the Prime Minister has two press conferences, one after the other, so I do not want to hold you up. May I just say that this exceptional meeting of the European Council was indispensable as the President of the Council has just stressed. It enabled us to raise the level of trust and confidence among the Twelve and to have a joint assertion to press ahead with the building of Europe on a basis which is understandable to the citizens of Europe and with a confirmed and resolute determination. I think that was necessary.

    I myself expressed fears that given the events of the last few weeks a lack of trust could have emerged between member states and now I am reassured and today’s discussion, particularly this morning, was extremely rich and politically useful. and I think it augers well for the future of the Community.

     

    QUESTIONS AND ANSWERS

    QUESTION (James Blaze, Radio VIP International, Mexico):

    Prime Minister, you talk about looking forward to a single European market in the future, Mexico has just signed the North American Free Trade Agreement which is involving Mexico, Canada and the United States, what is your reaction to the signing of the NAFTA and do you think that a single European market would mirror many aspects of that?

    PRIME MINISTER:

    I certainly welcome the North American Free Trade Agreement, I think it is a great step forward, it will be immensely helpful for Mexico. It is an important part of the Americas initiatives that President Bush has followed with I think some success over the last couple of years or so.

    In the single market in Europe, the single market has been something we have sought for some time. We are over 90 percent there. Of the measures that are necessary to complete the single market, 90 percent are concluded, a number are in the course of conclusion and we aim to complete the single market by Edinburgh at the end of this year. And the importance of it is it will remove barriers and it will open up a great deal of opportunity in terms of the United Kingdom, particularly for the City and elsewhere, but extra opportunities for each Community nation.

    When I say we will complete the single market by Edinburgh, I do not necessarily mean that each and every one of the single market ambitions will be concluded, but we will be sufficiently close to each and every one being concluded for us to be able to declare the single market properly open for business, and I illustrated to you earlier how valuable that would be for growth of Community GDP.

    QUESTION (Paul Reynolds, BBC Radio):

    How confident can you be that you are going to conduct your affairs with greater openness in view of the fact that you refused to let TV cameras in for any stage of your proceedings today?

    PRIME MINISTER:

    I think openness comes in many forms, it certainly comes in forms of greater openness in consultation and greater openness in explaining what decisions are, greater openness in contacts with national parliaments. Thus far we have not opened Cabinet discussions to television and lots of other things either. But I do not exclude the possibility of television being there for part of discussions in future, that is one of the matters we are examining, but we have to examine that and reach agreement with all our Community partners about it. My personal view is that I think there is a case for it and I think it would be very wise, for example, to have a general discussion, perhaps in the Foreign Affairs Council once a year where it was entirely open to the public, televised perhaps if televisers wish to televise it, in which we can discuss the principles of the Community, where we are going and matters of that sort. That is certainly something we will wish to continue to discuss with our European partners and I hope we will reach an open conclusion.

    QUESTION (Vincent Hanna, A Week in Politics):

    I was interested in your statement about the idea of a Commissioner being accountable in some way to each national parliament, does that mean that you envisage at some point a Commissioner appearing before Westminster or a Select Committee at Westminster and answering questions and taking part in a debate, that would be unprecedented in our Parliament?

    PRIME MINISTER:

    Not in the Chamber itself, no Vincent. Firstly I should make clear we are not talking about extra Commissioners, we are talking about a Commissioner being allocated who would have a particular responsibility for liaison with one national parliament. I would not envisage that that Commissioner would appear in the Chamber of the House of Commons or Lords, indeed in terms of our constitution they could not, but certainly that they would answer appeals perhaps to appear before Select Committees or Backbench committees of any of the parties at Westminster so there is a different and better relationship. One of the things that strikes me quite starkly about the relationship between national parliaments and the European Community as a whole is the lack of understanding between the two, the lack of coordination between the two, and I think this is one way in which we can improve it. Having said that, I think it would be appropriate to ask M. Delors to comment, for it was his initiative that we should actually look at this particular proposition, and I warmly welcome it.

    1. DELORS:

    It seemed to me that in order to involve national parliaments more in terms of getting them to express their opinions about the Community and get information about the Community, a lot would depend on national practices, relations between national governments and national parliaments and also there was the idea of convening a conference of the European Parliament and national parliaments now and again. But that is not enough. Whether you are talking about Select Committees in the House of Commons or parliamentary committees in other countries, I think it would be useful and that was the proposal I made for these Parliamentary committees to know that among the members of the Commission there is one person who is particularly responsible for liaising with that national parliament who could appear before a Select Committee in order to provide information they need when they need it. Now of course I would make it clear straight away that for example the correspondent from the Bundesbank would not be German and the correspondent for the House of Commons would not be British, it would be better that way because that way they would get to know each other better. After twinning cities we would have twinning personalities.

    QUESTION (Mike White, Guardian):

    British authorities lowered interest rates today, I wondered if that was discussed at all at the Council and whether President Delors thought it was likely to increase the probability that Britain will re-enter the Exchange Rate Mechanism quickly or delay that? Secondly, we had expected to hear a little more about the economic recovery plan and the ideas associated with M. Delors, what has the summit done for Europe’s rising numbers of unemployed, including the British miners?

    PRIME MINISTER:

    The question of British interest rate levels was not discussed and neither in the form you put it was the second matter you raised. As to the rest of your question, I will be holding a domestic press conference immediately after this and I think that is more relevant to that press conference.

    QUESTION (BBC Newsnight):

    Did you identify any concrete areas of common ground where all countries agree that Brussels currently exerts too much power? And secondly, is there anything that you said about subsidiarity that takes the information in the Maastricht Treaty any further?

    PRIME MINISTER:

    We have sought in the Birmingham Declaration to give more flesh to what subsidiarity means. But if I may borrow a very old English saying, the proof of the pudding will be in the eating and we will actually see that when we come to Edinburgh and when we will be able to answer the first part of your question and we will have a specific list of illustrations of the way in which subsidiarity will work. And also we will be able to respond to the point that the Commission are also examining and that is those areas of legislation that previously the Community has been involved in where perhaps in future it need not be involved in. We have to seek the agreement of all twelve nations, work has been going on for this for some time, it is intended that we can reach conclusions at Edinburgh and I hope then that we will be able to put a good deal more detail behind the question you ask. It is the right question to ask, we will be able to answer it at Edinburgh.

    QUESTION:

    On the question of the GATT your declaration seems to be positive and urges a GATT agreement by the end of the year. However, the American administration wish to achieve a breakthrough on the GATT by 3 November and this looks like it will not meet that request. Also the French President told us a few minutes ago that he had insisted that the term under the present mandate be maintained in the statement and that seems to limit the Commission’s freedom. Can you give any reason why Americans should not think this is a backward step on the GATT rather than the forward step it looks like?

    PRIME MINISTER:

    No it is not a backward step, most certainly it is not a backward step, and there was complete unanimity in the European Council about the economic advantages of reaching a conclusion to the Uruguay Round, not only the advantages of reaching it but the very severe disadvantages that could follow if we did not reach it.

    As to the timing, let me firstly say something about progress. There is absolutely no doubt whatsoever that in the meetings last week between the Community negotiators and Mrs Hills and Mr Madigan very substantial progress was made, not just in agriculture but in services, market access, financial services, a whole range of issues, far more progress than we have made in meetings for a very long time indeed. The negotiators believe more progress can be made. The end of the year is the target that has been set but it may be well in advance of that. The negotiators will be meeting again next weekend but of course that is the bilateral negotiation between the Community and the United States. They would then need to go to Geneva in order to sort out the details of their agreement with the other participants to the GATT agreement, of which there are a large number. But I think there is more optimism about the prospects of making progress today than there has been for some time and certainly a good deal more optimism than there was before the meetings over last weekend.

    QUESTION (Dutch TV):

    The Dutch Prime Minister has just said that the Danes are very close to a conclusion about Maastricht, in fact that they will come with concrete proposals within two weeks, can you now tell us when Maastricht will return to the House of Commons?

    PRIME MINISTER:

    Yes I have indicated some time ago that the preparatory debate that we have to have in the House of Commons before the committee stage can come back will be held shortly after the House of Commons returns. Once we have had that debate we can make a firm decision about the return of the bill to the House of Commons. But the bill will return and will go through the House of Commons in the present session of parliament.

    QUESTION (Boris Johnson, Daily Telegraph):

    On the GATT, this is surely a French political problem more than anything else, you rightly allude to the progress made on Monday night and I wonder whether it was ever part of your strategy, given that both you and the Foreign Secretary have been at summits when the British Government has been quite ruthlessly isolated and voted down over an issue in the name of European Union, and that given under Article 113 of the Treaty of Rome it is possible to decide agricultural issues by qualified majority vote, did it ever occur to you that it might be advantageous at this stage to simply proceed to a vote on the question of agricultural subsidies with the French and vote them down at this summit or did you think that was not the way we did things?

    PRIME MINISTER:

    We have not got an outcome of the negotiations to determine yet. The negotiations on the agriculture element still continue, there are still some differences about import substitution and cereal production levels and export subsidies, there are still some differences in those areas to be resolved so it is not possible for us to determine how to reach an agreement until we have actually got an agreement that the Community collectively can decide upon. But it is the Commission that has the negotiating rights for the Community.

    What was vital today was to ensure that the Commission were given a continued mandate, to continue their negotiations firstly with the Americans bilaterally and ultimately thereafter to go straight off to Geneva and see if they could conclude a GATT agreement. That is the mandate that the Commission has and it means that the negotiations for a GATT agreement remain on track and proceed. Once the Commission are in a position to recommend a conclusion to us then we have to decide how it is determined, how it is agreed by the Community and as you rightly say that can be by qualified majority vote.

  • Mr Major’s Comments on Coal Mine Closures – 16 October 1992

    Below is the text of Mr Major’s comments on coal mine closures, made in an interview on Friday 16th October 1992.

    QUESTION:

    [Mr Major was asked if he would scrap the coal mine closure because of opposition].

    PRIME MINISTER:

    No-one likes to see closures of this sort and we would not have done it unless we felt it was absolutely unavoidable. There are something like 40 million tons of coal lying at the top of the pit head that nobody wants, there is an extra million tons being added to that each month, the total production of coal is twice as high as we are remotely likely to be able to sell. That is the reality. What we need to do is firstly deal with that problem, painful though it is, and I understand that very well, and then start to put in place measures that will provide permanent jobs and regenerate those areas that at present face difficulties. It is not a decision that could have been delayed forever, it seemed to us to be cleaner, more clear cut and more honest to say frankly what the difficulty was and to seek to deal with it.

    QUESTION:

    [Mr Major was asked if he knew the dismay about the closures and if he would resign if defeated in the Commons on this].

    PRIME MINISTER:

    Who would not be dismayed? Who would actually have wanted to implement closures like this? I certainly would not. Michael Heseltine said earlier this week it was one of the most painful decisions he had ever been connected with, I would echo that. If we could have avoided it we would have avoided it. Right at the very last moment, before the decision was taken, I called the appropriate Ministers together and we had a complete representation of the entire case, whether there was a strategic demand for that coal or likely to be in the future, whether there were marginal pits that could have been saved. We looked again, and again, and again to see if we could change the decision.

  • Presidency Conclusions on the Birmingham European Council – 16 October 1992

    Below is the text of the conclusions of the Presidency on the Birmingham European Council, concluded on 16th October 1992.

    The European Council heard a statement by Mr Klepsch, President of the European Parliament, on the main questions under discussion by the European Council.

    The Maastricht Treaty

    The European Council reviewed progress on ratification of the Treaty on European Union signed on 7 February and reaffirmed the importance of concluding the process as soon as possible, without reopening the present text, on the timing foreseen in Article R of the Treaty. It agreed that the Community must develop together as Twelve, on the basis of the Maastricht Treaty, while respecting, as the Treaty does, the identity and diversity of Member States.

    After a full discussion on bringing the Community closer to its citizens, the European Council agreed the attached Declaration (Annex I). It noted the Danish White Paper and welcomed the Danish Government’s intention to present within the next few weeks ideas on the way forward. It asked Foreign Ministers to examine these ideas and to report on them to the Edinburgh European Council, with a view to agreement there on the framework for a solution. The European Council heard a presentation from the President of the Commission and asked him to elaborate the proposals he had made, and to present a report thereon to the Edinburgh European Council.

    Economic and Monetary Cooperation

    Heads of State or Government agreed that Member States face common economic challenges, and were concerned at lower growth and increasing unemployment. Strong coordination at the Community level will help to ensure that the economy of each Member State is strengthened by the success of other Member States. It is important for Member States to continue policies to reduce inflation; to carry through programmes for controlling budget deficits; and to improve the efficiency of their economies through open market policies. Firm and sustained implementation of these policies establishes the basis for recovery, for social and economic cohesion, and for the creation of the new and lasting jobs that are needed.

    The European Council underlined the importance in this context of reinforcing the convergence process among the Member States’ economies, which is crucial for maintaining monetary stability and for creating the framework for sustainable growth and rising employment. Strict adherence to the principles of sound economic management, as set out in convergence programmes, formulated by Member States so as to fulfil the criteria set out in the Maastricht Treaty in order to realize the movement towards economic and monetary union, would enable the Community to meet its objective of proceeding together in its development. The European Council reiterated too its commitment to the European Monetary System as a key factor of economic stability and prosperity in Europe.

    The European Council endorsed the view of the Economic and Finance Ministers that the recent financial turbulence calls for reflection and analysis in the light of developments in capital markets and in the European and world monetary systems. It invited the Economic and Finance Ministers, assisted by the Monetary Committee and with the involvement of the Commission, to carry this work forward with the Central Bank Governors. It should cover recent economic and financial developments within Europe and in the major industrialized countries as well as the implications of changes in the general economic and financial environment in recent years, notably the impact of the increasing size and sophistication of financial markets and greater capital liberalization.

    GATT-Uruguay Round (GATT)

    The European Council reaffirms the importance of a fair and successful GATT agreement for strengthening the multilateral trading systems and increasing trade flows. This would give a non-inflationary boost to the world economy and would benefit industrialized and developing countries.

    The European Council heard a report by Vice-President Andriessen on current EC/US talks, indicating that, while gaps remained, real progress had been made. It invited the Commission to work within its existing mandate for an early, comprehensive and balanced GATT agreement by the end of the year, in the interests of the Community and of .the world economy, as well as for an early settlement on oilseeds.

    Yugoslavia and Somalia

    The European Council adopted the declarations in Annexes II and III of this document.

     

    Annex I – Birmingham Declaration – A Community close to its citizens

    1. We reaffirm our commitment to the Maastricht Treaty: we need to ratify it to make progress towards European Union if the Community is to remain an anchor of stability and prosperity in a rapidly changing continent, building on its success over the last quarter of a century.
    2. As a community of democracies, we can only move forward with the support of our citizens. We are determined to respond to the concerns raised in the recent public debate. We must:

    – demonstrate to our citizens the benefits of the Community and the Maastricht Treaty;

    – make the Community more open, to ensure a better informed public debate on its activities;

    – respect the history, culture and traditions of individual nations, with a clearer understanding of what Member States should do and what needs to be done by the Community;

    – make clear that citizenship of the Union brings our citizens additional rights and protection without in any way taking the place of their national citizenship.

    1. Foreign Ministers will suggest ways, before the Edinburgh European Council, of opening up the work of the Community’s institutions, including the possibility of some open Council discussion – for example on future work programmes. We welcome the Commission’s offer to consult more widely before proposing legislation, which could include consultation with all the Member States and a more systematic use of consultation documents (Green Papers). We ask the Commission to complete by early next year its work on improving public access to the information available to it and to other Community institutions. We want Community legislation to become simpler and clearer.
    2. We stress, the European Parliament’s important role in the democratic life of the Community and we welcome the growing contacts between national parliaments and the European Parliament. We reaffirm that national parliaments should be more closely involved in the Community’s activities. We shall discuss this with our parliaments. We welcome the Commission’s readiness to respond positively to requests from national parliaments for explanations of its proposals. We underline the importance we attach to the Conference of Parliaments and to the Committee of the Regions.
    3. We reaffirm that decisions must be taken as closely as possible to the citizen. Greater unity can be achieved without excessive centralization. It is for each Member State to decide how its powers should be exercised domestically. The Community can only act where Member States have given it the power to do so in the treaties. Action at the Community level should happen only when proper and necessary: the Maastricht Treaty provides the right framework and objectives for this. Bringing to life this principle – “subsidiarity”, or “nearness” – is essential if the Community is to develop with the support of its citizens. We look forward to decisions at Edinburgh on the basis of reports on:

    – adapting the Council’s procedures and practices – as the Commission for its part has already done – so that the principle becomes an integral part of the Community’s decision-making, as the Maastricht Treaty requires;

    – guidelines for applying the principle in practice, for instance by using the lightest possible form of legislation, with maximum freedom for Member States on how best to achieve the objective in question. Community legislation must be implemented and enforced effectively, and without interfering unnecessarily in the daily life of our citizens;

    We shall also have a look at the first fruits of the Commission’s review of past Community legislation with examples.

    1. Making the principle of subsidiarity work should be a priority for all the Community institutions, without affecting the balance between them. We will seek an agreement about this with the European Parliament.
    2. The Maastricht Treaty will bring direct benefits to individual citizens. All of us – Council, Commission and Parliament – must do more to make this clear.
    3. The European Council, in conformity with the responsibilities given to it by the Treaty, will ensure that the fundamental principles of the European Union will be fully observed.

    Annex II – Declaration on former Yugoslavia

    The European Council agreed that immediate and decisive action was needed in the face of the impending major human tragedy in former Yugoslavia as winter approached. It underlined the importance of providing winter shelter and zones of safety for refugees, and of ensuring the delivery of relief supplies, as highlighted in the Commission’s action plan. It decided that:

    – the Community will speed up EC assistance, for which ECU 213 million is ready for immediate disbursement, including on 120 000 tons of foodstuffs, and on medicines, shelter and 40 trucks;

    – Member States will immediately provide further staff and resources, practical and financial, to strengthen UNHCR’s capacity;

    – the Community and its Member States will immediately establish a task force to support the efforts of the UNHCR to deliver humanitarian aid to the former Yugoslav republics;

    – in order to increase the effectiveness of such humanitarian assistance, the European Council called on the UNHCR to set up:

    – next week, a meeting of technical experts on emergency aid to ensure the practical provision of immediate assistance;

    – next month, a stocktaking conference, to assess the effectiveness of the operation, and recommend further measures.

    Each member of the European Council will appoint a personal representative to supervise this work.

    The European Council called on other international donors to make a commensurate effort to support the UNHCR appeal and to speed up the delivery of assistance under existing pledges.

    The European Council condemned the continuing widespread violence and cruelty and the savage breaches of international humanitarian law in the former Yugoslavia which have caused this human suffering and are now the main constraint on the delivery of essential aid. It noted the unacceptable fact that commitments made at the London Conference had not been put into effect. The European Council expressed its full support for the unremitting efforts of Lord Owen and Mr Vance to bring about an end to hostilities and a peaceful settlement and to secure the implementation of the agreements already reached.

    The European Council strongly endorsed the recent UN Security Council resolutions on the Prevlaka Peninsula, war crimes and a no-fly zone. It underlined the importance of the rapid deployment of forces now under way under Unprofor II, to which a number of Member States were contributing, for humanitarian convoy protection and the escort of detainees from camps. It reaffirmed that sanctions measures and the arms embargo should be maintained.

    The European Council discussed the dangerous situation in Kosovo and urged all parties concerned to exercise restraint and negotiate constructively in the current discussions. It endorsed the work of the International Conference and the long-term CSCE mission of Ambassador Boegh.

    In the light of the deteriorating economic situation in the former Yugoslav republic of Macedonia, the European Council stressed the need for appropriate measures to prevent this republic from bearing the unintended consequences of UN sanctions.

    The European Council noted the recent undertaking by the Bosnian Serbs to remove their military aircraft into Serbia and agreed that in case of violations of UN Security Council Resolution 781 the Security Council should be asked to consider urgently the further measures necessary to enforce the ban on military flights.

    Annex III – Declaration on Somalia

    The European Council expressed its deep concern over the appalling situation in Somalia and the continuing deaths and starvation. It condemned the renewed fighting and called on the parties involved to observe an immediate ceasefire to allow the rapid distribution of aid to the people in desperate need.

    It expressed its full support for the efforts of Ambassador Sahnoun on behalf of the United Nations to achieve a national reconciliation as the basis for a peaceful solution, and for the Belgian contribution to the UN force. It welcomed the outcome of the UN Conference in Geneva on 12 and 13 October, and the creation of a 100-day programme to deliver aid to the worst affected areas. The European Council notes the contribution being provided by the Community and its Member States to relieve the crisis: in addition to other aid, over 100 000 tonnes of food aid has already been delivered and a similar quantity is being sent. Member States are also contributing some ECU 100 million bilaterally.

    The European Council called for the rapid deployment of UN troops to the areas where they are needed. It asked the Presidency to consult the UN Secretary-General on ways and means to expedite these deployments.

  • Mr Major’s Press Conference in Birmingham – 16 October 1992

    Below is the text of Mr Major’s press conference in Birmingham, held on Friday 16th October 1992.

    PRIME MINISTER:

    Let us now move to the second half of this mobile press conference.

    Let me say something about economic and domestic matters and then I will be happy to take whatever questions you have.

    Let me firstly say that I am delighted that the Chancellor has been able to announce today a further 1% reduction in interest rates. Base rates have now been cut from 15% to 8% in just over two years. The impact of those reductions, that they are worth around £9 billion a year off industry’s interest bill and about £100 off the payments of a typical mortgage, has now been a substantial but in my view justified easing of monetary conditions and as a result of that British industry can look forward with more confidence to improving domestic and overseas sales.

    As I said a week ago at the Conservative Party Conference at Brighton, we will be looking to help British exporters take advantage of the new competitive situation in Europe. The Chancellor will be consulting industry in the coming weeks about what the Government can do to help industry further and he will be doing that in the context of our continuing commitment to control public expenditure and contain inflation.

    Britain’s recovery from the recession we have suffered for so long depends crucially not just on domestic circumstances but on world recovery and particularly upon prosperity in the European Community. Over 60% of our trade is with our Community partners and that is where the new jobs and the growth that we want to see is going to come from and that is why it is so important that the Community progresses on the right lines and why today’s Council in Birmingham was so essential. It is also why the Chancellor and I have made it absolutely clear that even though we have been forced to suspend our membership of the Exchange Rate Mechanism we must match the best inflation performance of our competitors in Europe and I believe we are on course to achieve that.

    Let me say something about British Coal and the announcement of large pit closures earlier this week. In answering questions earlier this week, Michael Heseltine said that the decision to agree British Coal’s plans for closure was about the most difficult decision that he had ever had to make. I can certainly endorse that. It was similarly difficult for me but the fact was that we simply could not ignore reality. The demand for coal is shrinking. The electricity generating companies want to buy only 40 million tonnes of coal next year whereas British Coal would produce 88 million tonnes of coal. Shift after shift, miners have been coming up to see piles of unwanted coal growing day by day. Stocks at the present time are increasing by more than 1 million tonnes every month and as a result of that, we have been spending £100 million a month of taxpayers’ money on keeping pits open even though the products of those pits – the coal – had no market and was not likely to have any market in the future.

    Why did we make the announcement now? We made the announcement sooner rather than later because we felt it right to remove uncertainty and because we did not believe that we would make a difficult decision easier by putting it off. There were rumours, there were leaks. Many people in the industry had been expecting difficulties in their own particular pit for a long time and it was getting to be an increasingly debilitating and difficult position to sustain.

    What we have done is to announce one of the most generous redundancy packages that we have ever seen. It is up to £1 billion plus a package of special measures to help the areas that have been affected by the closures. Those special measures include special training, help in finding new jobs, new factories, assisted-area status for some areas and fresh funds from the European Community. The talk about RECHAR this year overlooks the fact that it will be possible to apply for RECHAR next year from the European Community when the funds in that bloc are replenished.

    Michael Heseltine will be announcing more details about this special programme in his statement to the House of Commons on Monday but I can say to you now that there will be an immediate, closely-targeted programme of assistance led by the Training & Enterprise Councils – the TECS. They are employer-led and they are linked to local communities and we think they are the best mechanism and we believe they will do a fine job in helping in those areas.

    Nobody could do anything other than regret the anguish of the mining families. I understand that and I know and I regret the anguish faced by anyone who finds themselves made unemployed. Whether they were expecting it or not, it is always a shock when it happens but I do believe equally firmly that it would have been wrong to keep producing coal for which there is no market and for which, alas, there is going to be no market in the future. The important thing that we now have to do is to get on with helping the miners and their families and get on with beating the recession and that is what we are seeking to do.

    I know a number of questions arise from that and I will be happy to take as many of them as I can.

     

    QUESTIONS AND ANSWERS

    QUESTION (ELEANOR GOODMAN – Channel 4 News):

    You talked about the reality in terms of the pit closures but isn’t the political reality that you have a large section of public opinion against you, you have a large section of the Tory Party against you and that you are going to have to rethink otherwise you risk being defeated in the House over it?

    PRIME MINISTER:

    Nobody would have wished to close those mines unless it was essential. Nobody would have wished to do that. It is not a pleasant thing to do. Nobody gets any pleasure from it whether you are part of those who face the anguish of being without a job or whether you actually have to make the decision to do it. It wasn’t easy for British Coal, it wasn’t easy for the Government and none of us did it with any pleasure whatsoever.

    What we have seen in the mining industry over many years is the steady shrinkage of an industry because of the collapse of demand. If one takes, for example, the 1970s, there were around 30,000 mining jobs lost each year on average right the way through the whole of that decade simply because of shrinking demand.

    What we need to do is to deal with the problem, remove the uncertainty and seek to regenerate hope and employment in those areas and if I can give you a practical illustration of this, just a few weeks ago I visited Wales and I visited the site of the old Shotton Steelworks and many of you will remember that at the beginning of the 1980s, 10,000 jobs all on a single site were lost in a single day.

    What has happened as a result of the regenerative measures there is that there is now a modern industrial estate there providing secure, permanent employment for the people who once worked in the Shotton Steelworks, mainly medium-tech, high-tech, exporting all over the world and providing a rich diversity of employment for the people who work there. Misery and despair when it closed – a better prospect for the future as a result of what has subsequently happened. That is what we will seek to do in the areas that have been so badly affected by this closure but I repeat the point: it is not possible to continue to produce something for which there is no market and for which there will be no market and the money that would have been spent on artificially subsidising that for whatever length would not be available either for regenerating those areas or for any other public expenditure purpose.

    QUESTION (Peter Riddell – THE TIMES):

    Prime Minister, two parts: one, what has changed since earlier in the week when the Bank of England signalled that there would be no change in interest rates and the Chancellor was cautious to the Treasury Committee to justify a one-point cut in interest rates? Secondly, what form will the Chancellor’s discussions with industry take and what type of areas does that imply?

    PRIME MINISTER:

    The Chancellor’s discussions with industry will be with leaders of industry and they will be face-to-face discussions. The Chancellor will be inviting them to meet him and discuss a range of issues. I think I will leave the Chancellor to set out the details he will cover. The outcome of that I am not prepared to speculate about until we have had discussions.

    As to the reduction in interest rates, the Chancellor set out in an addendum attached to his press statement today precisely why we thought it was appropriate to cut interest rates at the present time: M0 close to its target range; M4 at its annual rate of growth at 5 1/2% is at the lowest level it has been for 20 years; M4-lending also growing very slowly. We all know the impact of the recession on house prices also showing there is no inflationary pressure in the system. All the surveys of inflationary pressure show that it is continuing to be downward pressure. The Producer Price Index rose by only 2.6%. All of that together suggests that there is scope for an easing of monetary policy and it was when reviewing all that that it seemed appropriate to ease monetary policy now. There is always a choice about whether one does it last week, this week or next week and the reality is you have to make a judgement at the time as to when it is appropriate. Judged by the way the markets have reacted today, they too thought it was appropriate and certainly forward rates would seem to indicate that as well.

    QUESTION:

    Prime Minister, it strikes me that you have no clothes. The Germans subsidise their coal industry, you subsidise the nuclear industry. You are throwing 30,000 miners out of work at once with immediate effect it seems to them. Why can’t you phase it out? Why can’t you act more slowly? Why so precipitate?

    PRIME MINISTER:

    Let me take those points and let me put it in a wider context than you did:

    The Germans will have to phase out their subsidies; they are no longer legal and they will have to be phased out. If one looks elsewhere, you will find in France the coal industry, once a very big coal industry, has now virtually gone. If you look at Belgium, you will find the industry has virtually closed. We will still have in the United Kingdom a significant coal industry, not only a significant coal industry but one that will be viable provided we no longer operate with pits that are not viable that have not only the effect of making losses in those pits but inhibit the profitability of other pits elsewhere.

    I know it is a painful decision. If it could have been avoided, we would have avoided it. At the very last moment before the decision to go ahead was announced by British Coal, we reviewed the whole matter entirely in two aspects: firstly, whether it was right in strategic terms, whether we were certain that we wouldn’t need that coal capacity in the future and secondly, to make absolutely sure that we were not closing marginal pits that could themselves survive and just before the announcement was made called together the Ministers affected and we had a lengthy and detailed examination of everything that underlay that decision to make sure that we could satisfy ourselves that it was a proper decision to take.

    I do believe that the sooner we take those difficult decisions, the sooner we can embark upon the lengthy but necessary task of putting back jobs that are self-sustaining and are there because there is a market for what they produce in the areas that at present are served by those mining jobs which in reality no longer are needed for their product is no longer wanted.

    QUESTION:

    Following the Rio de Janeiro World Environment and Development conference where it was agreed to return emissions to the 1990 level by the year 2000, could I ask two things: first of all is the present closures policy in the coal-mining industry a direct reflection of that commitment given at Rio and repeated in Mr Howard’s White Paper a fortnight ago; and in the reduction of emissions is there a place for the Dutch energy policy which seeks to limit the greenhouse effect by, in line with the Maastricht Treaty, having better European energy grids and for example a cable taken through the Channel Tunnel to make a wide insurance of energy sources so that we may not be dependent, as we have been hitherto, on one particular source?

    PRIME MINISTER:

    On the answer to your first question the answer is no, it is not directly related to any commitments made at Rio or elsewhere. I suppose you could argue in a sense it is indirectly related because one of the reasons why the demand for coal has fallen is that the consumer demand for non-fossil fuel energy has grown dramatically, both nuclear and of course non-coal fossil fuel and gas, the demand for both of those. If you look at the scale of demand by the consumer for different forms of energy you will see that both of those have grown and coal has correspondingly fallen. So I suppose there may be an environmental impact in the demand of the consumer but it was not any part of the decision that the government itself made. We reflected what the market itself was saying.

    As far as the Dutch energy policy is concerned, I am not really sure that I am in a position to answer that with any authority so if you will forgive me I will not attempt to do so.

    QUESTION (Dan Revive, CBS News):

    If I could try again with Elinor Goodman’s question which is on the pits issue, how will you cope with public opinion being against you on this issue as well as some Tory MPs and the press that normally supports you?

    PRIME MINISTER:

    I push aside the last part. It was hardly to have been expected that public opinion would welcome a decision like that, who would possibly welcome a decision like that or having to make a decision like that, of course people do not like it. There is a very great respect in this country for the mining industry, it is not a job which most people would wish to do themselves and if I may say so I have yet to meet a miner who would wish their son to be a miner. So there is very great respect in this country for people in the mining industry and so of course there will be great disquiet at what has actually happened.

    As far as Parliamentary opinion is concerned, of course Parliamentary opinion is concerned about what has happened. But what Parliamentary opinion of course yet does not know are the full reasons behind the closure that will be set out both in the statement next week and in the debate that we will have next week, and also of course the measures that will be taken to assist those particular areas.

    Although it is a tremendous shock when so many jobs of this sort go in a single way, it is the fact, and the miners will concede the fact, that they know that many of those pits had only a limited life and over the last few years there has been a constant closure of pits, whichever government has been in power, as it happens Conservatives have closed rather fewer pits than the Labour Party in government. And the figures I gave you a moment ago, 30,000 mining jobs every single year in the 1970s, is an indication of the economic trend. It is not suddenly something that we have woken up, rubbed our eyes and decided to do something beastly to the mining industry, if it was not economically unavoidable we would not have done it, but since it became economically unavoidable we thought it better to do it cleanly and quickly and then be in a position to put measures to alleviate the difficulty and help regenerate the areas in place. I think that is the right way to do it even though I understand it causes great disquiet and great anguish to the people concerned.

    QUESTION (Chris Moncrieff, PA):

    Is the proposal final, will there be any going back, any amendments or any changes to the timetable?

    PRIME MINISTER:

    I do not anticipate any. I know many people are very worried, they say well why have you taken such an unpopular decision? If I may say to some of the people who say that, they cannot say to us one day that the government have to take decisions, you must show leadership and take decisions, and then the next day criticise us for doing something that everybody would have wished to avoid. We did it because it was necessary and only because it was necessary and economically unavoidable for the reasons I set out a moment ago.

    QUESTION (Alistair Campbell, Daily Mirror):

    What do you say to a miner who voted for your party because you said vote Conservative on Thursday and the economic recovery continues on Friday, and what do you say to all the others who have been betrayed and let down day after day since the election?

    PRIME MINISTER:

    I think we made it perfectly clear at the time of the election that we thought that recovery was beginning to come, and we were not alone in that. There have been two occasions when recovery has flattered to deceive, in the summer of 1991 and then in spring of 1992. But we still intend to get permanent sustainable recovery. It is very easy sometimes to buy short-term popular decisions at the cost of long-term difficulties. I have consistently made it clear that what we are seeking is long-term, permanent, sustainable growth. I do not want to see inflation take off again and I want us to make sure that we are in the best possible circumstances to weather any future international economic difficulties, quite apart from domestic difficulties.

    Now that is not easy and it is not quick and it is not painless, but that is what we believe we have to do and those are the policies we are seeking steadily and daily to put into place. It is not all that long ago when people were saying: interest rates are 15 percent, when will they ever get down – they are now 8 percent; it is not all that long ago when inflation was nudging 11 percent and people were afraid we were going into hyper-inflation – it is now down to 3.6 percent. Those two things are absolutely key to the recovery that we need if it is to be sustainable.

    As to the general economic circumstances, it is not just a British problem, I do not say that to push aside the British problem, but if you look at what is happening in the United States or Japan you begin to see the scale of what is happening all around the world. If you look at France, they have 3.75 million people unemployed, 13 percent interest rates, 10 percent real interest rates. If you look at Germany their economy is slowing down at an astonishing rate. Nobody here I think will need telling about the economic difficulties in Italy or the problems that exist in Spain. They are very painful, not just domestically, but abroad. And of course all our economies are interlinked, there is an impact one upon the other, and it is a combination of those factors that has made this particular recession so painful and so lengthy in this country and in others. But what we need to do is to stick to the policies that will get us out of it in a form that will ensure we do not dip straight back in it 9 months or a year later, that would be unfair and that I am not prepared to take a risk in doing.

    QUESTION (French Tribune):

    About the decision to organise a meeting between the Chancellor and leaders of industry, is it not the whole point of having a Department of Trade and Industry and a Secretary of Trade and Industry to take the pulse of industry to help them, why do you have to resort today to this somewhat unusual channel?

    PRIME MINISTER:

    It is not that unusual, we frequently meet businessmen and we frequently discuss with them their concerns and what they think is necessary. But we are facing, as I indicated in the question I just answered, circumstances that are not wholly unprecedented but very unusual economically at any stage since the Second World War, so we are in very unusual circumstances. In those very unusual circumstances I think it is wise to step up a gear with the consultation with the people who are in the front line and that does, I think, mean an extra higher level between industry and commerce, both with the President of the Board of Trade, whose regular routine this is, and also with the Chancellor of the Exchequer and that is what the Chancellor proposes to do. I think it is a worthwhile initiative and one that will be welcomed by industry.

    QUESTION (David Langstone):

    This Council was called after what has been loosely termed the turmoil in the markets. We have heard very little discussion whatsoever today about economic matters, I know that you have taken subsidiarity to your heart and shelved that over to EC ECOFIN Ministers, but could you tell us what you have discussed on financial and economic matters today, I cannot believe that you and Chancellor Kohl did not talk about the economy, can you tell us something about the reason for this meeting being called which now seems to have slipped off the agenda? And finally, did you talk about the environment?

    PRIME MINISTER:

    No, we did not talk about the environment, that was not on the agenda today. The substance of this meeting today was set out in my statement earlier, it was not just the question of the turmoil in the markets. The work that needs to be done to discuss that turmoil in the markets is not the subject of a general discussion in the course of one day between Heads of Government, there is a great deal of detailed work to be done. And as I indicated in the earlier press conference I had, we have commissioned that work to be done by the Economic Ministers, by the Finance Ministers and by the Central Bank Governors, that work will be done and then reported to the Heads of Government. It is very important that we got the authority of the Community to proceed with that work, that is what we have done. As to what private conversations I might have had with Chancellor Kohl, I am sure you will understand that I have no intention whatever of telling you about those.

    QUESTION:

    [Indistinct] on the problems of Europe’s economy?

    PRIME MINISTER:

    I think the over-view is self-evident in many of the things we have said, many of the things that are set out in the declaration. The ingredients that are necessary in the European economy I think are fairly clear. One of the ingredients that has gone, not just in Europe but everywhere, is the confidence factor for investment. If you look, to take a British example to illustrate the point, at the savings ratio in the United Kingdom, it has dramatically improved over the last year, that suggests that the very high levels of debt that were built up at the end of the 1980s, which were the principal cause of the recession, are now being liquidated. But because of the continuing uncertainty, people are not spending the extra money that they have got saved and it is when they begin to spend that retail sales, housing and the whole of the domestic market begins to move, and you get that benevolent cycle in which confidence returns.

    You need several things for that, you need general confidence, you need general stability and sometimes there is a catalyst to start it, but that will vary as one comes out of different recessions.