Category: 1994

Below is Mr Major’s speech held at Leeds Chamber of Commerce on Friday 28th January 1994.

PRIME MINISTER:

When I sat down here at this top table this evening, I learned the moment I heard that remarkable Grace that this was going to be a special evening, a very classy evening, something perhaps just a touch out of the ordinary so I listened to what the Rector had to say and in the midst of that excellent dinner I thought I might reply for a moment in kind so let me have a crack at doing exactly that:

The Rector spoke tonight in rhyme and captivated us all the time; It even made me forget that he in times past once worked for the BBC. [Laughter and applause]

That made him feel distinctly odd but thankfully drove him back to God!

So I thought I’d follow his lead and say my message in the very same way:

My call tonight is clear and bright: “Don’t worry boys, the country’s all right!

Interest rates down and inflation low, exports up and we’re ready to go.

Things are better and they won’t get worse, we can even accept the Grace in verse! [Applause]

So Rector, into the pulpit and say: “God Bless Britain, we’re on our way!” [Applause]

You can go home now! That’s it! We may say it more elegantly, perhaps in better grammar, perhaps in a bit more detail but that’s it so those who wish to leave may decently do so and no offence will be taken!

It is always a great pleasure to escape from that chattering circle around Westminster and find out what is happening in the real world (Hear! Hear!) – I see you have been there! [Laughter] – How wise of you to come back!

I have had a most enjoyable and interesting day in the area and I’m delighted to be here this evening and to see, if I may say so, so many of my friends from the House of Commons on both sides of the House here this evening and I am delighted to see them all here.

Your President mentioned David Curry, the new Minister for Leeds. I would simply single him out for this reason if I may: in Leeds centenary year what we have is one of our youngest and best Ministers to look after your interests at Westminster and I have not a shred of doubt he will discharge that responsibility admirably. [Applause]

Over the years, like many people who were born down south, I have observed the changing face of the north but I am in no sense the only person to have done that. Consider, for example, the observations of an Italian journalist back here in Britain after ten years’ absence abroad and what did he find? He found here a Britain transformed for the better but with one big failing, a failing touched upon by your President. This is what he said:

“The British seem unable to appreciate any of the achievements of modern Britain. Not once was I told how good British theatre or the BBC World Service still are or how impressive Marks and Spencers and British Airways have become. There are many examples of the British failing to appreciate what they do well and concentrating instead upon what they do badly. The British have managed to turn grumbling into an art form and are kilometres ahead in it than anyone else.”

But this wise Italian had one shining exception. He went on:

“The north of England has stopped moaning, has rolled up its sleeves, displaying some of the grit and determination which astonished the world 150 years ago.”

Mr. President, I agree with that and today in this area I saw some of that grit and determination and I have not a shred of doubt about your future in this part of the country.

But if an Italian can stand back and look at our country, so can we. It is our country, so let us for a few moments do that this evening and take a clear-eyed look at ourselves, focus on what we do best and then build on what we do best.

My overriding priorities for 1994 are the economy, education and building a safer and more ordered society. These, Mr. President, are the basics and tonight I will concentrate on the first two.

First, the economy. Getting back to the most basic basics of all, lower borrowing, lower unemployment, low inflation and more growth. As you so rightly said, Mr. President, we have to break the inflationary psychology which has so bedevilled our prospects in this country for so long and everyone must understand that competitiveness is the route of our future prosperity, that unless we in this country are the best others will take our markets and steal our profits and as a nation we must steel ourselves to do whatever it takes to win in those international markets.

The underlying message is very simple. If business succeeds, Britain succeeds; if business fails, we will drift on but not with the same prosperity, not with the same enthusiasm, not with the same belief in ourselves and not with the same political clout in the world and above all the route to future success lies with low inflation. I have always believed that. If you have ever been in a position where you can’t pay the bills at the end of the week, then you feel strongly about inflation and that is why on the very first day I became Chancellor of the Exchequer I was determined to take action that would break the inflation habit for good.

There is in this country what I personally believe is a cynical view, a cynical view that a little bit of inflation is good for you, people feel better, wages go up, benefits rise more, asset values go up and people have a little bit more money but if that little bit of inflation is higher than your competitors it isn’t good for you and if you are poor or on a fixed income it is deadly for you; like a drug, it makes you feel better for a while but then you need bigger and bigger doses and soon you are hooked on a very nasty addiction indeed.

Curing that addiction has been very painful. I understand that perhaps as well as anyone in this room, perhaps as well as anyone in this country. During the recession, many businesses and many individuals have been hurt but we are coming through that and a very different prospect lies immediately before us.

Inflation over the past year has been 2% or less. No-one under the age of 40 can remember when that was last the case and what is more, while it may rise a little over the months ahead, low inflation is here to stay and what does that mean? It means industry can now invest with confidence but if we, if you, the business people who make the wealth to raise the taxes to support this services of this country, if you are to benefit from low inflation we must also break the habit of paying ourselves more than we should. We have no business any of us – public sector, private sector, it makes no difference – to demand pay increases year after year regardless of productivity, regardless of the market and regardless of the competition.

You in the private sector are keeping your labour costs down while so many of your competitors are seeing them rise. In the public sector too we are keeping tight control of our running costs. We are insisting that any pay increases must be financed out of increased productivity and efficiency. That doesn’t mean no pay increases for public servants; it does mean that the Government will only pay what can properly be afforded.

Everyone in this country without exception wants the benefit of low inflation but no-one wants the costs of getting there. Getting to low inflation and keeping low inflation is the very stuff of political unpopularity but it is necessary. I can only say to you that no prime minister – certainly not me – is paid to be popular and just right now, Mr. President, that is probably rather a good thing, if I may make the point!

I will tell you what I believe about that. I believe it is right to take the tough decisions today that will make everyone better off tomorrow. To bring Government borrowing down, we have had to put some taxes up. I would very much have preferred not to have had to do that but it was necessary because sound finances are the only basis for sustained economic growth. Spending must be paid for, it can’t just go on unless one is prepared to meet that discipline and that is also why we have taken some tough decisions on public spending.

Public spending means either more borrowing or higher taxes or both. We intend to cut borrowing and I do not wish to see higher taxes so I propose to take no nonsense on taxes from politicians who have been handing out promises of extra spending on every street corner. Those promises could easily be made but if those promises are to be kept, they would have to be met by the taxpayer and I remember only too well when the taxman took 98 pence in the pound from savings income, 83 pence in the pound from earnings; remember when corporation tax was 52% and I just have to say this to this audience: tax rates like that cause acute damage to the economy and I believe we must never go back to them. [Applause] It is low direct tax rates that have made Britain a magnet for investment, for enterprise and for skill and that is why other companies are now moving from continental Europe and elsewhere to set up business here in the United Kingdom: low inflation, sound public finance. These policies are right, right for Britain and right for our future prosperity.

Mr. President, lift your eyes from the everyday headlines that you see, stand back a little and just look at the circumstances that really apply in this country at the present time. Do that with a clear and an uncluttered eye and what do you see?

You see, I believe, above all else that we now have in this country the conditions for long-term sustainable growth. Last year, the economy grew by 2% – double what people expected – and I quote: “The world’s largest economic survey shows Britain leading Europe out of recession.” That is official; that is what the British Chambers of Commerce say quite apart from what the Government believes. [Applause] We have interest rates at 5.5%, the lowest for 17 years and amongst the lowest in Europe. The time lost through strikes is now the lowest for over a hundred years since records were kept; unemployment down around a quarter of a million since last January. In the United Kingdom still one-in-ten still without work most of them [Inaudible]

I am not in any way complacent about unemployment, neither do I dismiss for a second the effect that it has upon individuals and their families but that one-in-ten figure is now falling. In other countries that is not the case. In the United Kingdom one-in ten and falling, in France one-in-eight and rising, in Spain one-in four and rising, in the whole of the European Community one-in-nine and rising. We are the only country in Europe seeing more jobs and shorter dole queues and I intend to ensure that we see more jobs and shorter dole queues in the future as well. [Applause]

Set against that background, it is hardly surprising that our flexible labour markets are the envy of many others in Europe. Your President spoke of the Social Chapter. It wasn’t easy to say No to the Social Chapter but it was right to say No to the Social Chapter and however it may come back to us, this year, next year, some time in the future, I shall say No to the Social Chapter again and I will tell you why: not just because it damages competitiveness though it does but because I think it is morally wrong to provide fresh help for those people in work and ensuring in so doing that those people out of work have an even smaller chance of getting back into work at some stage in the future. [Applause]

We have at the moment in the economic circumstances that are coming together – and they have painfully come together, they have not magically appeared, they have painfully been brought together over the past two or three years – some unique opportunities and don’t let anyone kid you that we can’t take them.

You spoke, Mr. President, of people not appreciating what was right in this country and sometimes knocking it. Well here perhaps are a few things that everyone should know:

We export 20% more per head than Japan and 85% more per head than the United States of America; we have more companies listed in the top hundred European companies than any other country and Japanese and United States companies have chosen to invest in the United Kingdom more than in any other European country; they have shown with their cash, their investment and their hopes for their future that they have a vote for this country and the future of this country.

We have seen in the last decade or so massive economic changes for the better. The average family today is taking home around £60 a week more after tax and after inflation. Twice as many of our people in this country have foreign holidays, there are twice as many two-car families. I could spread that list to the corners of this room and back again but it isn’t just the material improvement in our well-being that matters. How many of our young people now go on to higher education? They have more than doubled in the last decade or so. One in every three of our young people now have that opportunity. That was the target I set for the Government to be reached by the year 2000; we have reached that one-in-three target this year – that target has already been met.

And then take another aspect of our lift in this country, charitable giving, again more than doubled and not least from those of you in business.

But if the changes of the last fifteen years have been rapid [Inaudible] the world is changing, changing at a bewildering pace, becoming more competitive for you to operate in than at any time we have seen at any stage in the past. Our markets will change, Europe will change. The countries of eastern Europe may well be members of the European Union, markets for us but also competitors for us as well. The economies of the Pacific Rim will continue to grow rapidly.

In this country, we, you, business are going to have to prepare for that. We have to keep asking ourselves the questions: “Are we meeting demand? Where are our weaknesses? Are others doing better than us? If so, why and crucially, what can we do about it to make sure we maintain our competitive edge?” Above all we need to give businesses more freedom, the freedom to succeed. I tell you what success means: success means keeping business taxes low, keeping business free of rules and regulations, backing British exports, investing in our infrastructure and investing in people and in skills.

We have acted in each and every one of those areas and there is a good deal more still to be done. We have brought corporation tax down, our business taxes are the lowest in the European Union and I intend to keep them that way. But ask any businessman – in Leeds or anywhere else you like – what he really wants from Government! You have given me several answers tonight but if to take your example of the genie, you could have had only one wish, I bet you would have replied like this: “Right Government! Get off my back and get rid of the red tape!” That, I believe, is what business wants from the Government. [Applause]

I agree and we are acting on it. We have a huge Deregulation Bill cutting excessive regulation across Government, in transport, in employment, in environment and in fair trading. The bonfire of the [Inaudible] an end to controls, to forms and to paperwork and I was delighted to hear of your support for that tonight, Mr. President.

We are backing British exports – the opportunities are there and you are taking them. Just this morning, the trade figures have shown yet again that exports are running at record levels and now we have a GATT deal opening new markets all around the world and let me tell you this: very reserved we are we British, we don’t bang our own drum very often, not often enough in fact, so let me do it now:

Mr. President, without Britain I doubt whether there would have been a GATT deal at all nor for sure would there have been a Single Market and yet today as the rest of Europe comes out of recession GATT opens up the world market and we have a Single Market of over 340 million people right on our doorstep. I am determined that the Government will help British exporters make the best of those opportunities. We have expanded insurance cover for exports and lowered premiums, you in business have loaned your whiz-kids to Michael Heseltine so that the DTI can provide the best possible export advice, our embassies abroad are putting more and more effort into helping British exporters large and small; more than ever promoting British interests means promoting British trade abroad.

But business needs good back-up at home as well because to sell the goods you have to move the goods and that is why we are modernising British transport. For years we have had this ludicrous hang-up, this ludicrous belief that big projects can only be done by the State – rot! Who built the railways in the first place? The private sector built the railways – you did and you can do it again in the future.

So we are now opening-up major projects to private sector investment and private sector expertise. The private sector will help to build the Channel Tunnel rail link and the new Forth Road Bridge, it will modernise the West Coast main line and there is a great deal more to add to that.

But there is a bigger, longer-term issue that will determine whether Britain will lead the world into the next century. You cannot be competitive without the people to compete and they are moulded in our schools, in our colleges, in our universities as well as in the training grounds of British industry. In many respects, the position is good but in others it isn’t and we frankly cannot afford it not to be, quite literally can’t afford it. Illiteracy and innumeracy among the work-force cost you as employers around £5 billion a year and it costs the children themselves through stunted lives, opportunities missed and a life less rich than it should be and that is why getting back to basics in education must be at the centre of our programme.

I intend to work with teachers to build a better educated society. The national curriculum backed by testing will ensure that all State schools concentrate on the basics of education, on grammar, on spelling, on maths, on science, on reading, writing and arithmetic – the three R’s. I believe that is what parents demand, it is what employers ask and it is what I am determined that the education system will deliver.

But I believe there is more still to come. I still believe that we must get rid of the damaging distinction that some people make between white-collar skills and so-called blue-collar skills. What disruptive class-ridden nonsense those distinctions are! Every individual’s different skills and qualities count and they must be made to count in their interests and in our country’s interests and that is why we have improved the range and quality of vocational qualifications for pupils over sixteen.

I now want to work towards opening-up those opportunities, opening them up for children from fourteen upwards who want to take them so that schools will have the chance to teach a mix of academic and vocational subjects each with equal value, each to fit the child and their own aptitude to build a better future for them and help them build a better future for all of us.

That must be true for all young people. That is why we have abolished the false distinction between polytechnics and universities, it is why we have created modern apprenticeships to treble the number of young people skilled as technicians, craftsmen and supervisors.

Mr. President, let me just make the point plain: what we are working for is nothing less than the re-skilling of Britain and anyone who has come up the hard way knows how many others there are who have talent but don’t have the luck, who have talent but don’t break through the barriers, who have talent but don’t have the chance to contribute all that they could from their skills and their will to work. I am determined to give them that chance in the future. Decent education first, good training later – that is the way to let everyone fulfil their potential regardless of who they are or where they may have started.

None of this, Mr. President, is abstract stuff. It is for real. What is at stake is our future as a country and their future as individuals and here in your city of Leeds I believe you know this better than almost anywhere else.

Thirty years ago – not all that long – Leeds could have settled for being just a declining textile city but you didn’t. You acquired new skills and you made the old skills pay. Textiles aren’t a thing of the past, they have a future and Leeds has some of the most advanced plants in Europe. The new industries have a future too: financial services, food processing, defence, medicine and high-tech industries, huge investments coming to Leeds, a massive vote of confidence with other people putting their money and their future in your city because you know here in Leeds what change means, you know you can ride it and you have proved it in the past and I think it is no wonder that independent estimates say that Leeds is the fastest-growing job magnet in Britain for the 1990s.

Yes, competitiveness is about making Britain prosperous and powerful but it is more than that: it is also the means to provide all that is civilised in the life we love. Your two great universities here, your theatres, Opera North, the Leeds Piano Competition, your famous art galleries, you brought together here some of the finest public collection of Henry Moore in Britain if not in the world and I am even told the gallery has been eyeing-up the Henry Moore sculptures in Downing Street but much though I love you, you can keep your hands off my Henry Moore sculptures!

As it is in the arts, so too in sport. Leeds home to Rugby League, football – and here my eyes mist over – cricket, Headingly. I don’t know, looking round this audience, how many cricketers may be here this evening. One or two and I bet every single one of you remembers that test match in Headingly in 1981. It seemed impossible for England but we won but don’t just remember the runs that Botham scored, the resistance of Dilley or the wickets of Willis; remember that it was that gritty Yorkshireman Chris Old who held the show together when it mattered and opened the opportunity for that victory. I still remember at the most difficult moment of all that great Australian fast bowler Dennis Lilley saying this: “I’m betting on England to win!” Well, looking round Leeds today and looking at all of you tonight let me tell you what I am doing: I’m betting on Britain to win and I’m confident that we will. [Applause]