Category: 1993

Below is the text of Mr Major’s speech at the Manchester Chamber of Commerce, held on 2nd April 1993.

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PRIME MINISTER:

Thank you for your warm welcome. I am delighted to be here. 250 years ago Daniel Defoe called Manchester “the greatest village in the country”.

Today it is a great city of Europe. That is not politician’s wholesale civility. This is the city of English commerce. This is Brindley and Crompton country: where faster transport met an eightfold increase in yarn and cloth production. Together that sparked the Industrial Revolution and sold shirts to the world!

But why is it a great city? Because leading not following, Manchester has changed with the times. We all face a similar challenge. “The times, they are a’ changing”. In our interests we must lead that change and fast.

The captive market is an inscription on a headstone. And the lordly assumption that it is a privilege to buy from the British has passed into history. Japan and the countries of the Pacific rim are giant manufacturing powers. China is set to become a huge industrial power. That’s the competition; so let’s not flinch, let’s not run. Our job is to beat the competition.

So we must not make the mistake of falling for the alternative to complacency, the British gift for graceful despair. We can compete brilliantly and we are now well placed to win in the world’s market place. Step back a moment from the painful necessities of the last two years and consider the position today. Listen, please, to the scores Britain chalks up and you don’t hear enough about:

– we have inflation below 2%, better than most of the European Community and most of the G7;

– we have a highly competitive exchange rate;

– interest rates are the lowest in the European Community and the lowest for 15 years

We have not seen that combination for nearly 40 years. I believe industry and commerce have recognised that reality better than many others:

– manufacturing output is up, so is investment;

– productivity is rising fast;

– you have kept wage costs competitive – doing better than Germany or Japan, better than any time for a generation.

As the Chancellor said earlier this week, Britain is set for two years or solid growth, growth that is the fastest in the European Community big league. We have every reason to be confident about our economic prospects.

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

The recovery will benefit every bit of Manchester’s increasingly broad-based economy. A diversified and successful base that is represented here so well tonight. Your region’s service sector is vital to the nation as a whole – and, as an employer, your financial and business services alone provide work for nearly a quarter of a million people. More, now that Mercury is bringing an extra 500 jobs.

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

That’s not just an investment for the future. Education is a key part of the service economy of today. A service economy that is also showing its paces abroad.

The North West Chambers show that service exports have sharply improved over the last quarter. I applaud that. If the recovery is to last and prosperity to grow, we have to win and continue to win right across the market place. Vital though services are to our prosperity, we cannot depend on them alone. We need a vibrant, thriving manufacturing base.

So, Mr President, I want to say a few words about the importance of manufacturing and just a bit about our export success.

The British have managed a fanfare without trumpets. We are exporting more now than at any time in our history. But in the export market we operate like Jeeves – we just shimmer silently! We export discreetly. We don’t tell anyone; it might give offence. But I think we should.

We British export £400 per person per year more than the Japanese: £1,800 for every man, woman and child, compared with £1,400 for the Japanese. What are we to do with the Gordon Glooms who always say British industry is crumbling? Listen, in financial services, pharmaceuticals, chemicals, the water industry, power generation, areas of food processing, the drinks industry, garments, aerospace and defence equipment, the oil and gas industry, mining equipment, biotechnology and international construction, we lead the pack.

British companies account for ten out of the top European twenty companies by profitability and eleven out of the top twenty by size. And though the trade gap is still too wide, we are seriously engaging with the competition. We export televisions to Germany, lace to Brussels, cosmetics to the French, cars to Japan, and with a brass neck which would have delighted Richard Arkwright, we sell pizzas to Italy! The balance of trade in the motor industry will be revolutionised over the next few years; in partnership, of course, rightly in partnership, joining and beating!

What about the future? Well, I’m a fairly tolerant soul. But I’ll tell you one thing I don’t like. I don’t like to see British manufacturers retreating from the field. I don’t like to see imports monopolising markets. I don’t like to hear defeatists say that radios or kitchen equipment just can’t be made in Britain. Some people said Britain couldn’t stay in computers. Yet today, more than one in every ten PCs made around the world is actually manufactured in this country. We sell £400 million worth of computers a year to the USA; and our software businesses are recognised everywhere. Britain’s car industry has turned retreat into triumph.

Other industries can do the same. And retailers can help them – by looking for good British products and offering them to consumers. Not in rejection of good imported products – but in proper competition with them. Defeatism is most damaging when buyers and retailers won’t even look for a good British source of supply. Now British industry is becoming ever more competitive, there is every good business reason to seek out the home talent.

And why is it so many people have such a low view of manufacturing? I think part of this comes from the outdated image of manufacturing as an employer of large numbers of unskilled people, in sprawling plants, doing heavy manual work: – the ancient, mythical world of the Cloggit and Thump brass hammer works! That’s not a low view of manufacturing, it’s a low understanding. Reality, manufacturing reality is more like the British Aerospace works I saw today; or the factory just 30 miles from Manchester I saw the last time I was here, a factory spinning optical fibres. Modern, expanding, sharp, the biggest producer outside American and selling to the world. These are great symbols but we want more than symbols. We want fast-breeder replication – more, more, more!

The Need for Competitiveness

Improving competitiveness is the key to expanding our manufacturing base. We know that when we’ve manufactured we can sell. As recovery picks up we must make sure there are more and more British goods for customers to buy of the quality and price they want to buy.

There is one other danger waiting. Time and again since the war exports have gone up in recession but when the recovery came companies abandoned the export drive for the warm, debilitating huddle of the home market. Well that must not happen this time. We’re determined to build on our export success. That is why, in the Autumn Statement and the Budget, the Chancellor increased export credit and cut its cost to business. You keep exporting. We’ll keep supporting.

Success requires continuous effort, continuous improvement. We cannot let up. Manchester knows something about this. The fourth generation mill-owners who bought shooting estates, lived in Surrey and wouldn’t replace old machinery, the soft and selfish gentlemen-manufacturers, very nearly destroyed Lancashire. Let us remember them in order not to be like them. Chance not decay must be our creed.

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

Everything we do has to be supportive of you. We want less of a tax burden on the profits that you need for investment. That’s why we’re pressing down on public expenditure.

It is why we have to give priority within that spending to infrastructure projects which spell business. Manchester’s own Metrolink is a very real example. So is the Channel tunnel rail link, so is the Forth crossing in Edinburgh.

It’s why we were reforming education. That’s what tests in schools are about: to find out what the children know and what they don’t. Because we need to know what they don’t know so we can teach them what they should know. They deserve the best, they need the test. You need the best, working for you.

That’s why we’re doing more than ever before for good vocational training. To give our youngsters the best possible start in the best possible jobs. A recipe for the best possible success for Britain.

It’s why science is a Cabinet job and why we are overhauling what we do on science and innovation to ensure Britain’s effort and brainpower backs industrial success.

It’s why in the Budget we’re given extra help to Britain’s exporters, why we’ve cut businesses’ rate burden and cut ACT to boost business cash flow by £2 billion.

And when we have winners we support them everywhere. I did it recently in India and in the Gulf. British firms had done the work. Government helped unlock the contracts. £5 billion worth of orders and 20,000 jobs safeguarded for years to come. I saw the fruits of the partnership earlier today when I met the Gulf Tornado builders at BAe, Warton. I and my colleagues will give that backing. So must all our Embassies throughout the world. Graceful manners and an elegant understanding are surprisingly well suited to the indispensable arts of trade. Pour them out the gins and tonics by all means, but then sell them both bottles.

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

Making a Success of Europe

Mr President, over recent months there has been a tiny frisson of controversy over our European policy. Let me set out my position clearly.

Commercial success starts on our own doorstep. And our doorstep is Europe.

When Europe walks, it walks in shoes exported from Manchester. The new rail terminal at Charles de Gaulle is work done in Bolton.

The cocktail chatter is that the Government is too obsessed ith Maastricht, when we should be concentrating on jobs. In what world are such people living? Jobs and sales are what being in the heart of Europe is about. What made possible the vast expansion in small and medium sized businesses and new jobs in the 1980s? Where did they find their main export markets? In Europe, overwhelmingly. An example: a Leyland company went into Europe a few years back with one Chesterfield in the back of an estate car. In the single market it now does a million pounds of business.

Have your reservations, by all means. No-one says Europe is perfect. But that story tells why we are there. Since we joined, our exports to it have grown nearly 50 per cent faster than those of our old EFTA partners. That is almost £20 billion last year, 20 exports billions worth of jobs. No wonder the Scandinavians and the Austrians wish to join the Community. What an irony that a nation which sought trade when Tuscan merchants bought raw wool in the Cotswold in 1370 should contemplate holding back from the richest free trade market of them all.

The Chambers of Commerce understand the importance of Europe to Britain’s trading strategy and of the Maastricht process to that strategy. The President of your Association, Christopher Stewart-Smith – who is here this evening – wrote to me recent specifically to support what we are doing. Let me quote:

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

That, Christopher, is it – between the eyes! That is the message business should give to doubters about our commitment to Europe. Maastricht opens the way to the sort of Community we want. Taking that essential step away from centralisation, we gain the benefits of the single market without the drawbacks. At the end of the inky labyrinth of Treaty sub-clauses is a trading Europe. First and last and especially here in Manchester, that is what we want, a trading Europe.

Yesterday, in the House of Commons, we finished the Committee stage of the Maastricht Bill. Let us now finish the Bill and get on with the job of building prosperity for Britain in Europe.

One Stop Shops

Let me say a word about the Chambers of Commerce movement. It is already helping its members win markets. But I think it can do more. I would welcome a bigger billing for the Chambers. It can only help for businessmen to swap ideas and learn from each other. I would like Government to develop the same relationship with the Chambers as with the CBI. The One Stop Shop Initiative is a tangible sign. And naturally, Manchester has won the bid to be one of the pilots.

Manchester’s Olympic Opportunity

Here in Manchester this evening one other issue commands me like a referee’s whistle – the city’s bid for the Olympics.

Manchester’s bid goes beyond pleasing discus-fanciers. Building the Olympic facilities and hosting the games should generate £4 billion of new spending in the region and make 11,000 jobs. But better yet, it will be a shop window beyond dreams. The world would see what North West England has to offer. Manchester is already 8th in the European league of Best Cities in which to locate a business. But it can move up. I know, and everyone here knows, that Manchester has ambitions to be top of the league.

So the Government is shouting (and finessing) for Manchester’s bid. We have put up £75 million for the bid and for the initial construction programme. That starts with the Olympic Arena and the National Cycling centre. We are providing some £40 million funding towards the regeneration of East Manchester this year. And we are backing Manchester’s bid by enduring that all the necessary facilities can be built. A state of the art Olympics for the start of the new millennium: where better than here in Britain, in Manchester?

I am honoured to play my part. Together with Craig Reedie of the BOA and Bob Scott – who has done wonderful things for Manchester – I pressed the city’s case to the President of the IOC just a couple of weeks ago. No-one can be sure what will lie in the minds of the IOC when they vote to decide the location. Because of what has already been done, Manchester is one of the three hot favourites. Beijing and Sydney will make their pitch, but nothing that can be done for Manchester will be left undone.

This bid and the great works that accompany it, are just one sign that Manchester has kept all its flair. Much of the rest of the world may still be going into recession. We are coming out of recession. And we have the edge: low inflation, rising competitiveness. We need the Manchester touch for the great things which are pending.

It was Manchester which took raw cotton from Smyrna, sold it to the fast-bobbin men in Oldham, and the power-loom men in Preston. Then it sold cheap cotton cloth to the world. Manchester knows what must be done. So does the Government. United, we can do it.