Below is the text of Mr Major’s speech to the Canning House Group, held in London on Thursday 10th March 1994.
PRIME MINISTER:
One of the great delights of expressing your view as a politician is that you can always be sure it will be accurately reported [laughter and applause] I had some experience of this recently as you will have read. I had actually rowed out to the centre of the Serpentine, the boat stalled and I appeared to be stranded. Clearly, I did the only thing that any self-respecting politician could do in the centre of the Serpentine, I got out and I walked across the waves right to the shore! There was a good story the next day in most of the papers – “Major can’t swim!” [applause].
David, I am delighted to be here on the 50th anniversary of Canning House not in Canning House but on that very remarkable anniversary of Canning House. This occasion and indeed the House itself commemorates a very great Conservative and one who had this country’s strategic interests earlier and more comprehensively defined than any of his contemporaries. Not for nothing was he called “The eagle in the dovecot of British politics”.
He and I have quite a lot in common: we have both held the offices of Foreign Secretary and Prime Minister. There is, however, one difference if I may to which I would draw to your attention: he was Foreign Secretary for a long time and Prime Minister for a very short time [applause] I was Foreign Secretary for a few months and you can complete the thought for yourselves!
Canning’s mother, of course, like mine, earned her living at one time on the stage; she was the second wife of an actor. He faced in those days the sort of thing that can only happen in the 19th century, a remarkable amount of hostility to many of his policies, but he came through. He fought a duel with Castlereagh, a former War Minister though I, for the avoidance of doubt, should confirm to you all that my relationship with present and past War Ministers is extremely warm.
Mr. President, this year is also the 500th anniversary of the Treaty of Tordesillas, an important treaty, one under which the lands of the New World were divided between Spain and Portugal and Canning House was established of course to promote our relations with both the countries of Iberia and those of Latin America and I hope this evening our Spanish and Portuguese friends will forgive me if I concentrate tonight on our relationship with Latin America.
Canning’s name is a remarkable name in British history but like that of Cecil Rhodes, Thomas Raffles, George Curzon is a British name probably better known abroad that it is at home, in his case of course in Latin America and I don’t find it remotely surprising that he was revered there. He was a staunch supporter of countries in the region as they strove for independence many years ago and the independence of those young Latin American countries brought remarkable opportunities, opportunities for British men and for British trade. A large number of young men from Britain crossed the Atlantic to try their luck, British firms built roads, railways, they invested in shipping, in mining, in telegraphs, in cables, our trade relations with the new nations grew steadily from those early beginnings right up to the turn of this century and yet curiously after the Great War, for whatever reasons, the British presence in Latin America steadily year upon year began to decline and that relative decline went on for quite a few decades. In the ’80s of course, there was the trauma of the Falklands conflict and the Latin American debt crisis but I believe in the last few years things have begun to change and change quite dramatically.
Latin America itself is changing. The region has enjoyed a political renaissance over the past decade every bit as striking as its economic recovery. It has become a serious player on the world stage. We saw that, for example, in the Uruguay Round negotiations last year, at the Rio Conference on the Environment the year before and at the growing Latin American contribution to United Nations peacekeeping operations in areas throughout the world.
The relations of the whole of Europe with Latin America are changing; technology, greater ease of travel and mass communications, all have brought Latin America and Europe closer in trade and cultural and diplomatic terms than they have ever been before and for my own country Britain’s relations with Latin America are changing as well.
It is for Britain a vast and expanding market, a continent rich in many ways, rich in resources and richer still I believe in opportunities for the future. There is a greater potential for political and economic cooperation than most people I believe have yet begun to grasp and equally a greater potential for two-way trade between the United Kingdom and the countries of Latin America and it is those opportunities, particularly perhaps the trading opportunities, that I wish to dwell on for just a few minutes this evening.
One thing I passionately believe: the last decade has seen the most remarkable changes in this country but I believe the current decade and the decade beyond that will see the pace of change in a world that becomes economically more competitive as year succeeds year bring ever greater changes and amongst those changes will be an increasing need for this country to be competitive. If we are not competitive, we will not succeed. There are no world markets out there waiting instinctively to buy from us simply because we are British. If we are the best they will buy from us, if we are the most economic they will buy from us, if we can deliver on time they will buy from us and in this competitive world we need to look to every corner of the globe for those markets and I believe the prospects in Latin America are mouth-watering. [Applause].
Mr. President, I wouldn’t deny to this audience for a second the fact that the last four years have been difficult, difficult for us here in the United Kingdom and difficult in truth for most of the world’s economies. The chill of economic recession has seemed from time to time to be almost everywhere but in fact that is not wholly true. There are bright spots and amongst them Latin America shines particularly brightly.
In Latin America, economic expansion now exceeds population growth, inflation is down, tight fiscal and monetary policies help stabilise economies, structural reforms of a sort undreamed of fifteen or so years ago to labour laws, in privatisation, incentives to inward investment have improved competitiveness right across the whole region. Trade liberalisation even before December’s GATT success has brought growth right across the continent and the overall picture shows a clear and continuing upward trend. The World Bank estimates that GDP in the region could grow at up to 3.9% a year up to and including the turn of the century.
In Britain, too, after the traumatic period through which we have passed, I believe the outlook is bright, indeed far brighter I suspect than many people have yet begun to imagine, certainly brighter than it has been for some time. We are now clearly out of the recession and we have come out of it with prospects a good deal better than before. We have succeeded in getting inflation down and keeping it down, we have brought unemployment down and we have pushed GDP up – it is in fact now back up to where it was at the peak of the boom in the late 1980s. Growth has exceeded expectations; it is set to be 2.5 to 3% this year, not of course as fast as some of the fastest-growing Latin American economies but faster than anywhere else in Europe as it was in the year just past, as it will be this year and as we expect it to be next year as well and so both Britain and Latin America have every reason to look up and look forward with confidence, to look up, to look outwards and to look to one another for a greater trade and investment flow in the years ahead.
Mr. President, I mentioned some moments ago the British entrepreneurs who recognised the opportunities which Latin America had to offer in George Canning’s day. I am delighted that British businessmen today are showing the same enthusiasm for that continent as their forbears. It is interesting to see what has begun to happen. In Brazil, British firms increased exports last year by over 50%, we have continuing high levels of investment there. To the south, the Chilean and Argentinean governments are supporting a private venture to construct a gas supply link across the Andes. At the turn of the century, British companies helped to build and operate the rail link across the Andes and today British Gas is taking the same route happily supplying gas to Chile.
Two years ago in the trip you mentioned, David, I visited amongst other place Colombia, the first serving prime minister I think ever to have visited that country and there right on the edge of the mountains in Colombia I saw how BP are helping the Colombians develop the Cusiana oilfield and I know from discussions earlier this evening over drinks out there how much that development has prospered in the period since I last saw it – probably two or three billion barrels worth and some of the highest-quality crude in the world and we have just signed an investment promotion and protection agreement with Colombia which I hope will encourage far more companies to follow the BP example.
In Mexico, we see North West and Severn Trent International who both have won significant contracts to provide water Services in Mexico City. Communications are good, not only good but they are getting better; last year, British Airways opened new routes to Buenos Aires, Mexico and Chile to add to existing services in Venezuela, Colombia and Brazil and in each of those circumstances British firms are working closely with Latin American partners.
In 1993 we increased our exports to Latin America by nearly a third and in line with our investment performance worldwide, the highest as a share of GDP, Britain placed over a billion pounds of new investments each year for the last decade in Latin America.
Those figures are beginning to be impressive but the reality is that the prospects far outmatch anything that has been achieved thus far and there is the prospect of us doing far better still. In terms of exports to Latin America, we still don’t match our main competitors and British firms should make the most of developed businesses and trading structures which Latin America offers.
These are countries that understand trade, they know about trade, they have a thriving private sector. Government policy in Latin America now welcomes market access for foreigners, they recognise that regulation and intervention will deter investment so I believe that British companies can be increasingly confident of doing business in Latin America and they can be confident when they seek to do so that they will have the backing of the British Government in those ventures.
Mr. President, I dare say many – perhaps most – of the people here this evening will have seen the recent “Economist” survey of Latin America. “Under construction” – that is what the headline said – “Under construction” and below is a picture of frenzied construction work against a backcloth of the Andes. Still under construction perhaps but what a building is emerging in Latin America and it is good to know that British firms are a part of that process but it isn’t a one-way process. The way is equally open for Latin American business to come to the United Kingdom and I believe there are many and good reasons why they should seek to do so. Perhaps of all European nations, we here in Britain welcome inward investment from all over the world. We have a liberal trade and investment policy. We have the lowest business taxes in Europe and the most far-reaching labour reforms.
I don’t find it remotely surprising that more American and Japanese companies have chosen to invest in the United Kingdom than in any other countries and there is plenty of room for Latin American companies to join them for Britain is an ideal base for operations in Europe.
Let me give potential investors a practical reason why that is so: if you look at the cost of operating in a country, consider for example the social on-cost of investing in a European nation. The social on-cost of investing in Germany, France or any Community nation other than the United Kingdom is for each employee about 50% of the cost of that employee; in Japan and in the United States it is 25% which gives them a sharp competitive edge; here in the United Kingdom it is about 30%, not quite as good as America and Japan but markedly better than the rest of the European Community and it is precisely for that reason that I believe we are absolutely right to say “No!” to the increased social regulation that the European Community would seek to impose upon the United Kingdom economy [applause] so let me say to our friends in Latin America much as we look forward to greater trade between us and investment in your countries, you too are welcome to invest in the United Kingdom.
Let me say secondly about the United Kingdom that we are firm believers in bringing trade barriers down and indeed several of you here this evening spoke to me in one sense about that outside over drinks. We have worked consistently to make sure that the European Union is as open as possible to the outside world. I don’t want to see a “Fortress Europe” closing its doors to any part of the world. I don’t think that is right economically, I don’t believe it is right in trade terms and I certainly don’t believe it is right politically for the future and so we are pressing on all fronts to make sure that the Single Market doesn’t mean an exclusive, closed club for a small number of rich nations.
I believe this country fought as hard as any country in the world for a successful outcome to the Uruguay Round, by far the most far-reaching deal in the history of GATT but of course our friends in Latin America fought hard for that outcome too, in particular Argentina, Brazil, Chile, Colombia and Uruguay as members of the Cairns Group. I lost count of the number of occasions I was phoned by the Cairns Group to try and persuade the Europeans to have a positive approach across Europe to reaching a satisfactory conclusion in the Uruguay Round so the Latin American commitment to reaching a GATT settlement was frankly invaluable and I am most grateful for the support that they gave to us but what we now need now that GATT Round has been concluded is to work together to make sure that the deal that was concluded is now implemented and implemented as speedily as possible to ensure that lower tariffs, fewer quotas and better conditions for investment become a reality and we must keep our markets open and resist protectionist measures.
When I was in America just a few days ago, I agreed with President Clinton that we would seek to bring forward the commencement of the GATT deal from the middle of next year to the beginning of next year if that was negotiable. It isn’t of course in the gift of the United States and the United Kingdom alone but I believe we should seek to do that if it is at all possible.
Mr. President, I spoke a little of the economic changes in Latin America but I have to say although their economic success is remarkable what is equally remarkable is the astonishing political renaissance which has grown up alongside that economic recovery. I wonder, even amongst this audience of businessmen many of who are long familiar with Latin America, who of them would have guessed when the debt crisis exploded in 1982 that a whole decade of political renewal was at hand? Not, I suspect, very many and yet one by one the Latin American nations have put their faith in democratic structures from Peru in 1980 to Nicaragua in 1990 and by the end of the decade we had seen several nations conduct successful constitutional elections not once but twice and in some cases three times, democracy becoming established as an intrinsic part of the political landscape and so the political prospects are better there now than ever they have been before and wherever you look throughout the region there are signs of greater democracy and greater stability; old hostilities and suspicions have eased or disappeared and they have given way to political and economic cooperation.
The success of the peace process in Central America is impressive, the recognition of Belize by Guatemala is welcome, particularly with our long relationship with Belize. It is encouraging to see the leaders of Argentina and Chile working closely to establish a firm basis for future cooperation. These are changes few would have imagined a decade ago and they illustrate the impressive speed of economic and political change right across the continent.
Mr. President, that greater democracy, that greater stability is what will underpin Latin America’s continuing economic growth. I believe the future of the region looks extremely bright. Britain and British firms can contribute to that future. We have a joint interest in political stability, in the security of our investments and in a thriving and growing trading partnership. The GATT deal we forged will reinforce those links and freer trade will continue to bring us closer together.
There is a role of course for Canning House. Canning House can play an important part in promoting Britain’s relations with Latin America; it has links with politicians, with businessmen, with academics and with other key figures right throughout the Latin American world and it has established over the years a reputation of which it can be justly proud.
I am aware that David Montgomery and his colleagues have chosen this landmark anniversary to launch an appeal to enable Canning House to press ahead with its work and I warmly wish them well in that endeavour. I am certainly happy to confirm that the Government will be continuing its financial support to Canning House next year. [Applause].
Mr. President, I know that you have decided to stand down from your post at the end of this month. That has nothing to do with our continuing financial support. [Laughter]. You have worked ceaselessly for Canning House for over thirty years, you are known, David, throughout Latin America as a good friend of the region and as an energetic promoter of links with this country. I believe both countries owe you a remarkable debt of gratitude and I for one am delighted that Pat Limerick will be following you for I have no doubt he will be a worthy successor. [Applause].
Let me offer you one brief thought in conclusion for I know that the raffle upon how long I was going to speak at the table over there is reaching a climax! It is easy to tell, looking at them, who has got 16 minutes! Looking around this room this evening, this thought strikes me: I wonder what George Canning would have made of this particular occasion. Certainly he could never have possibly envisaged the Latin America of today but when he said in 1826: “I called the New World into existence to redress the balance of the Old!” he was perhaps more prophetic than he knew. Latin America’s economic growth is fast making it a major player on the international stage. It has, I believe, a great deal to offer Britain and a great deal to offer the Old World and I hope – and here I think after the passage of nearly a century and three-quarters that George Canning would have said the same – Britain has a great deal to offer Latin America.
Canning, of course, is not here this evening but looking around this room at the trade, at the investment and the political contacts that span between this country and Latin America, I suspect that Canning’s legacy is here in this room and for that I believe we should be grateful and I hope we can build on it for the future. [Applause].