Tag: 2011

  • Sir John Major’s Speech at the John C Whitehead Lecture – 10 November 2011

    The text of Sir John Major’s speech at the John C Whitehead Lecture, held at Chatham House on Thursday 10th November 2011.


    SIR JOHN MAJOR:

    When Chatham House invited me to deliver this lecture, I was delighted to accept.

    I was brought up with an affection for America. My grandfather was a Master Builder who lived and worked in Pittsburgh from the 1860s and helped build the Carnegie Steel works. My father was a dual citizen, who lived in Pittsburgh from his birth in 1879 through his teenage years. His philosophy was simple: if America and Britain were as one, all was well.

    Three hundred years earlier, in 1587, Virginia Dare became the first child of English parents to be born in the New World. On the coast of North Carolina, links to her ancestral home were all around her.

    She grew up amid place names familiar to every Briton: the road between early settlements at Roanoke and Jamestown passed through Suffolk, Gloucester, Portsmouth, York and Surry (sic): all quaint reminders of 16th Century England. Subliminal links, perhaps – but evocative ones.

    Our modern generation has grown up with the Atlantic Alliance.

    For all our lives, the Alliance has been solid and reassuring: so familiar is it, that we take it for granted. We shouldn’t: like every relationship it is flexible; and, as it evolves, it changes. It is doing so now in ways that are liberating, but which reflect the ambitions of two Sovereign nations.

    When David Cameron became Prime Minister he set out a dictum of a “solid but not slavish” relationship between the UK and the US. This is now taking practical shape across a wide swathe of policy.

    Economically, the UK is pursuing austerity, while the US searches for stimulus.

    Commercially, as a reminder that even the best of friends are economic rivals, Coalition Ministers have been boosting trade ties around the world.

    Militarily, a Defence Treaty, agreed with France, has acquired more than symbolic meaning with the close Cameron-Sarkozy response to the uprising in Libya.

    And diplomatically, the Government has taken a harder line than The White House in criticising Israeli policy on building settlements deemed illegal by the international community.

    Some will worry about these distinctions in policy. They need not. One of the strengths of the UK/US Alliance is that, over many years, it has been able to withstand irritants, squabbles and even fierce disagreements: Suez in 1956; the cancellation of Skybolt; and Dean Acheson’s disparaging Westpoint speech, in which he asserted that: “Great Britain has lost an empire and has not yet found a role”.

    Britain’s global role, he added, “is about played out”. There have been differences over Vietnam; and arms embargoes in the Balkans – but none of them caused a permanent rift.

    In looking at policy between Atlantic partners, it is a mistake – a simplification that deceives – to focus only on the US and the UK. For a long time, a third partner – Continental Europe – has been material to the relationship.

    Today, in a world of global transition, so is Asia – especially China and India – and the dynamic of new growing centres of power impacts inevitably upon the Anglo-American relationship.

    These days, America looks increasingly to the Pacific. As the wars in Iraq and Afghanistan wind down, I expect this shift to accelerate. Both Leon Panetta and Hillary Clinton have explicitly foreshadowed this new focus.

    It is not difficult to see why. The Pacific is the growing centre of gravity for future global growth; it is an area of exploding population; and it is the essential force driving global trade.

    This has changed its profile, and every nation – most certainly the United States – must take account of that. The fact that China is now the owner of over 25% of American Government debt, simply illustrates a reality few believed they would ever face.

    The point is simple: no-one can ignore Asia. However well disposed any US President may be to his ally across the Atlantic, he must be concerned primarily with the wellbeing of his own nation.

    As wealth and financial power move to the Pacific, new trade and political relationships will be forged, hopefully friendly ones. In China’s case, America will also have a wary eye on regional ambitions and military capability.

    No-one should be surprised at this evolution. Nor should we shrink away from nuance in policy, and sometimes outright disagreement.

    The tide of history can point friendly Sovereign Nations to different conclusions: it is inevitable and healthy. The Anglo-American relationship is a living entity. It would be a mistake to preserve it in aspic. It is about self-interest and mutual regard, and to drape it in sentimentality is to undervalue it.

    Too often, people talk of a “special relationship”. Every President is advised to use the phrase and courteously does so but – although not intended to be so – it is rather a patronising term.

    President Obama – a post-War child and a post-Cold War politician appears – to the British and European eye – to be less Atlanticist than his predecessors. I don’t say that to criticise; I merely observe it.

    The President can’t ignore the changing world. He would be failing in his duty to America if he did. He is likely to be followed by many Presidents who must take account of strategic realities, however bound emotionally they may be to the ties of the “special relationship”.

    It is time to consign this phrase to history. We don’t need it.

    Despite self-interests that may be diverging, what binds Britain and America together is tangible and reassuring.

    We do a lot of business together. The United Kingdom is the largest single foreign investor in the United States. We are huge trading partners. Our citizens are familiar with each other: millions of tourists travel back and forth across the Atlantic each year.

    We have strong cultural ties. Our shared tastes in music, film, theatre and television keep us close together – emotionally and psychologically. This comes so naturally we’re barely conscious of it.

    I wonder what proportion of people protesting outside the US Embassy at any given moment, head home via Pizza Hut or Kentucky Fried Chicken, stopping off on their way to pick up a Budweiser beer, before settling down to watch yet another re-run of “Friends” on their television sets.

    These shared cultural tastes are mirrored by shared political views. Our outlook on the world – our ambitions for it – are not identical, nor could they be, but they are strikingly similar.

    Security and Intelligence co-operation is profound, vital and deep. When I first attended meetings between British and American military commanders I was astonished at the free and easy exchanges between them. Secrets they would fiercely shield from third nations were discussed without inhibition.

    Our Anglo-Saxon sensibilities place great importance on respect for the individual, the rule of law, the virtues of prosperity and the liberty of progress for all. Instincts like these are made policy flesh; they are what – one hopes and expects – will guide our relations with the new communities coming forward in Tunis, Tripoli, Damascus and Cairo.

    These are not dissolvable links – they are solid. We can continue to rely on them. And yet ….

    It is the “And yet” I wish to focus on: the divergent issues that could strain – even weaken – the relationship, if we permit them to do so.

    “My enemy’s enemy is my friend”, declares an old Arab proverb, reflecting a basic tenet of human behaviour. But what happens to friendship when the enemy is no longer a threat?

    There is no longer a Soviet threat to bind us together. What does this mean for NATO?

    For 62 years, NATO has been the guarantor of security and freedom in Europe. Since the Soviet Union fell apart twenty years ago, its role has been problematic. We know we need NATO, but can’t quite identify why: this has led to a progressive diminution of the European input into the Alliance.

    Understandably, the US is alarmed at this and frankly, the Europeans should be shame faced about it. The future role of NATO may be opaque, but it remains the most visible and tangible military bond uniting Britain and Europe with the US. Europeans would be wise to focus on the comments of former US Defence Secretary, Bob Gates, who warned Europe over relying too much on America. Mr Gates is surely right.

    His discomfort with an alliance where member nations all enjoy the benefits of the grouping, but only a few deal with the “hard” military graft on the ground, is entirely reasonable. It is simply not acceptable for some countries to put limits on their operational commitment to NATO.

    Mr Gates warns correctly, and I quote: “ If current trends in the decline of European defence capabilities are not halted and reversed, future U.S. political leaders may not consider the return on America’s investment in NATO worth the cost …. there is the real possibility for a dim, if not dismal future for the transatlantic alliance.”.

    That could not – would not – have been said before the collapse of the Soviet Union 20 years ago. And it would not have been said publicly by the cautious Mr Gates if it were not being thought privately by policy makers in Washington.

    Since, after the Presidential election, it is likely the US will cut total defence spending, it is a warning that it would be very unwise for Europe to ignore.

    One threat to NATO countries is growing: the danger of cyber-attack. It is probable that more damage is being done to our interests through cyber theft of military, scientific and technical secrets than through any other form of sabotage. To combat that, the UK alone has already spent hundreds of millions in improving our cyber defences. Even so, this is an area that requires the closest possible co-operation between NATO members.

    We know that NATO needs to change. But we need to agree how. To let it wither through neglect would be reckless policy. Although a present threat to the European Continent is highly unlikely, that could change.

    Europe needs to lock America into NATO, not allow policy drift to diminish her commitment to it. It is simply not credible for Europe to sit back, cut defence budgets and blithely expect the US to bear a wholly disproportionate cost of defending her.

    A new settlement on NATO: its role, its funding and fairer nation state contributions, is long overdue. Mr Gates expresses American frustration, but, as American eyes are drawn increasingly to the East, it is Britain and Europe – in their own interests – who ought to be arguing most for early and definitive decisions on NATO’s future.

    There are other potential fissures we should not ignore. In America, I detect a contempt for what they see as feeble European policy. In Europe, I see a similar disregard for aspects of American policy, as well as a lofty disdain for its criminal justice system, with its harsh penalties. Some disagreements may be peripheral, but the mutual distaste is tangible.

    Economic management is a damaging area of friction that could get worse.

    The US blames the global slowdown in large part on the on-going Euro crisis. Mitt Romney attacks President Obama, saying his “answer is to borrow money …. just like Europe. Europe’s answers are not the right solutions”. This is not intended to be flattering to Europe. Indeed, it is dismissive, and – perhaps – with reason. A series of top-level meetings have failed to damp down a crisis that is having a world-wide impact.
    This disregard is two-way traffic. Europeans point derisively at Lehman’s collapse, and its aftermath. When US Treasury Secretary Tim Geithner told Europe to get its act together over Greek debt, he was met with a mixture of public indignation and private scorn. There was much talk of “pots” and “kettles”. Yet it is telling that no-one reacted so dismissively to Chinese Premier Wen Jiabao when he made a similar assessment of the Eurozone.

    Does this mutual disdain between the US and Continental Europe matter to the UK? Yes, it does.

    If it continues, bilateral relations may be weakened. Why so? It is a truth expressed too rarely that the US expects the United Kingdom to use her Anglo-Saxon influence within the European Union. She wishes our shared views on free trade, on deregulation, on low taxation and on fiscal responsibility to be presented within Europe.

    If US links with the EU weaken, if her interest wanes, if she looks elsewhere, the British value to America weakens too, and so, potentially, does an elemental part of the Anglo-American alliance.

    Some will see this differently. They argue that, if the US is disillusioned with Continental Europe, and the UK is frustrated within the EU – both of which propositions are true at the moment – that the solution is simple: the US and the UK should move closer together.
    Some Atlanticists and extreme Euro-sceptics go further: they argue that enhanced collaboration with the US is an alternative to the UK-EU nexus. This is sheer fantasy. The US does not want the UK as a proxy 51st State. It is the sensible, pragmatic Anglo-Saxon voice in Europe that the US welcomes: remove that, and the value of Britain to America diminishes.

    What virtues do the UK and the US separately bring to the relationship? It is – in terms of crude economic and political power – an Alliance of Un-equals. America’s contribution is evident and massive: what does Britain bring to the table?

    I would say a lot: although there is one area – to which I will turn shortly – where we could do better.

    First and foremost, in addition to Britain’s trade and investment role, she is the principal military ally of the US. With her immense military capability, the US could manage without us: but she prefers not to do so. Militarily, we are her first – and most reliable – partner.

    The UK has historic knowledge and niche abilities that complement American influence. As American author, John Updike put it: “America is a land whose centre is nowhere: England one whose centre is everywhere”. On 9/11, I was staying at the British Embassy in Washington.

    That night, most of the British intelligence hierarchy were flown in from the UK to brief and consult with their American counterparts.

    And the UK has a wide diplomatic reach. American diplomacy is more persuasive and compelling if it has British diplomacy alongside it. Any superpower, acting alone, can seem isolated, can be characterised as the bully on the block. With a strong ally, arguing from conviction for the same policy, that risk is diminished.

    There is one further role the UK can offer: that of the candid friend. A candid friend is more valuable than an unquestioning echo.

    We shall never know for sure but, perhaps, if the UK had been more candid in expressing doubts about the second Iraq War, events may have unfolded differently.

    At the outset, the general assumption was that Saddam did have WMD. I’m sure that was the intelligence served up to the then Prime Minister.

    But the real questions were: what sort of WMD? Were they deliverable? How imminent a threat was Iraq? And did any threat require action against such a tight deadline?

    Several facts are relevant. On the basis of an IAEA assessment, the UN Security Council almost closed its file on Iraq’s nuclear programme in the late 1990’s. And, as we now know, the British Government were advised in 2002 that Saddam’s nuclear programme was frozen – and Iraq was at least five years from producing a useable nuclear device.

    With this information, a candid friend might have cautioned against precipitate – I emphasise precipitate – action. But they did not.

    Upon mature reflection today, I would argue that the UK’s apparent unquestioning support for the US, did not serve either country well. We could have done better.

    Close as we are, we do not have to march in lock step. Our relationship is such that we can – and should – sometimes strike an independent stance as in the recent air campaign over Libya. The US was heavily involved, but it was the British and the French who took the diplomatic and military lead.

    We might want to get used to more independence – especially in our dealings with the Muslim world. It may be helpful – and prudent – for the US to “lead from behind” in some circumstances. We cannot – and must not – place the burden of leadership unfailingly on her. Others should share responsibility where they can.

    I believe the UK and Europe could also take a more pro-active role in the MEPP. The Quartet has not made advances. Indeed, after a total of twenty years of negotiation, we seem as far away from a solution as ever.

    But it seems to me – as I look forward – that Israel needs a settlement every bit as much as the Palestinians. The present sour atmosphere, worsened by Israeli settlement policy, is isolating Israel and – if the Arab Spring leads to more democratic governments in the Middle East – will isolate her further and, perhaps, dangerously so. This is unwise policy.

    In the last few days we have seen the IAEA report confirming that Iran is most probably developing a nuclear weapons capability. I believe this justifies a tough international response. I would suggest upgrading the present sanctions on proliferation to incorporate more financial sanctions, sanctions on oil and gas as well as designation of named individuals involved in the weapons programme.

    Ideally these would be UN sanctions but, if China or Russia block that, EU sanctions as a fall-back. It would be a tragedy if hostility to Israel inhibited that: Israel may feel alone but in truth she is not – but she does need to mobilise international support, not alienate it.

    There are many reasons why we need progress on the MEPP.

    UNESCO’s decision to admit Palestine as a full Member State – despite diplomatic pressure not to do so from America and the loss of the US sixty million dollar budget payment – is an indication of widespread unease over the present impasse. Entry into UNESCO is likely to be followed by Palestinian applications to the World Health Organisation and other UN bodies.

    This rejection of American policy – for that is what the UNESCO decision is – is an indication that much of the world blames the present stalemate, in part, on internal politics within the US. No doubt, because of US power, this point is put only sparingly to American policy makers, but it is put scathingly to third parties. Once again, the candid friend should tell America this.

    We might too, be more candid with Israel. At present, their policy – and that of the Quartet – is not to engage with Hamas who, as senior Israeli Ministers correctly point out, fire rockets into Israel.

    I understand this view – especially with the present polarisation of opinion in the country. But here, I think, the UK can offer valuable advice from direct experience.

    The IRA bombed Northern Ireland and the UK mainland for many years. For as long as we held the position of never negotiating with terrorists, the bombs kept coming. It was only when we engaged the IRA directly – albeit initially through intermediaries – that we began a process that led to peace. Talking and talking and talking – continually, and without huge gaps in time for backsliding – can bring together the most intransigent positions.

    “We won’t negotiate with terrorists” is clear-cut policy and, one could argue, high-minded. But it makes it easy for the rocket attacks to continue. The more difficult decision is to try to negotiate, even against provocation and domestic criticism: it may be the unavoidable preamble to settlement.

    After Iraq, Afghanistan and Libya I doubt there is much appetite – except as a last resort – for more military involvement. We may be moving into an era where diplomacy and soft power will take a higher profile. If so, I welcome that. It plays to British strengths. And, since UK and US objectives are so often the same – or similar – it should help both our countries.

    I would like to see the UK extend our diplomatic reach and our ambitions for diplomacy. As our “hard” power softens, our “soft” power must increase.

    I claim – immodestly for the British – that embedded in our national character is a gift for diplomacy. We should use it, encourage it, enhance it – both for trade and political purposes. We live in a tough world. We should use all our assets to advance our interests.
    I don’t view “soft power” as a “soft option”, nor as some ill-defined “third way” that exists only to soothe the conscience of liberal elites. Diplomacy requires patience and determination, and is characterised by intelligence, pragmatism, empathy and the transparent rule of law.
    It should be backed by stick and carrot: by a willingness to use economic and political pressure in pursuit of our objectives. “Soft power”: Yes. “Soft attitude”: No.

    This is an area that can achieve so much – for Britain and America. Where it fails, it doesn’t exclude military action in appropriate circumstances. But if it precedes military action, it helps justify it.

    In our inter-connected world, it is through “soft” power – and painstaking negotiation – that the really big challenges will be resolved – most obviously in making international bodies relevant to the modern world, and in the areas of energy security, climate change, aid policy – and peace-making as opposed to peace keeping.

    Soft power will embrace new alliances that unite the dominant global players. At the foundation of those alliances, Britain and America – with their common view of the world – will be likely to stand shoulder to shoulder.

    They will do so – not as the by product of a “special relationship” – but as pragmatic colleagues and candid friends who can bring others along with our shared vision for progress and prosperity – for all the 7 billion of us, and rising – who share the same resources of the same planet.

    And, if this comes about, perhaps even Dean Acheson will finally be confounded: Britain will have found a role.

  • Sir John Major’s Statement on the Queen Elizabeth Diamond Jubilee Trust – 28 October 2011

    The text of Sir John Major’s statement on the Queen Elizabeth Diamond Jubilee Trust, issued on 28th October 2011.


    SIR JOHN MAJOR:

    I am delighted and honoured to accept Chairmanship of The Queen Elizabeth Diamond Jubilee Trust.

    The Queen has dedicated her life to public service, a remarkable 60 years of which have been on the throne. Through its activities, the Trust will create an enduring tribute to one of our longest-serving Monarchs, who is held in enormous affection by many millions of people around the Commonwealth and the wider world.

    The Trust will place great emphasis on enriching the lives of individuals, by focusing on areas such as the tackling of curable disease and the promotion of all forms of education and culture.

    It is our hope that people of all ages, and from all corners of the Commonwealth and the wider world, might become involved – and feel part of – the Diamond Jubilee celebrations. But the Trust will provide a lasting legacy, in the name of HM Queen Elizabeth II, and I look forward to announcing the Trustees, and to providing full details of the Trust’s aims, objectives and operational plans, in due course.

  • Sir John Major’s Article on Fiscal Union – 26 October 2011

    The text of Sir John Major’s article on fiscal union, published by The Financial Times on Wednesday 26th October 2011.


    SIR JOHN MAJOR:

    The crisis in the eurozone was inevitable but has been accelerated, and worsened, by the banking collapse. It will not be solved easily or quickly. When it is, it may lead to a very different European Union.

    The root of the present chaos can be traced back to bad politics taking precedence over sensible economics. At Maastricht, which I attended as prime minister, the assumption was that – before the euro was born – the economies of member states would converge: that is, operate at broadly the same levels of efficiency. Safeguards were set: it was agreed national fiscal deficits should not exceed 3 per cent of gross domestic product. Later, a Stability & Growth Pact was enacted to ensure sound fiscal policies. Yet, when the founder members launched the euro in 1999, the wise preconditions were ignored.

    After the birth of the euro, some southern states over-indulged on low interest rates and racked up debts. So did their citizens, without hindrance from their governments who basked in the popularity of the boom. When Germany and France over-stepped the criteria on debt without any penalty by the commission, the criteria became toothless. Debt soared. This would have led to a crisis on its own, but it was hastened by the 2008 meltdown.

    Hindsight is often graceless. But it is a fact that sterling did not enter the euro because we foresaw flaws in its structure. We believed monetary union without fiscal union was risky; that convergence of the powerful northern economies with southern Europe was unlikely (especially once Germany had absorbed her Eastern lender). I had a political objection as well: that entry into the euro, and the abolition of sterling, would remove key policy options from the British government. That is why, at Maastricht, I opted out of the euro.

    It was not easy. The opt-out was only obtained by threatening to veto the treaty. Our European partners were unhappy. Some thought we were acting in bad faith: they had agreed to the British initiative of a single market, and argued that monetary integration was necessary to accompany trade integration. They were upset that we had implicitly endorsed monetary union in the Single European Act of 1986 and, in 1988, had appointed the Governor of the Bank of England to help the Delors Committee examine it. All this was true. But, on the euro, our interests diverged from theirs which caused a policy schism. That may be about to happen again, with far-reaching consequences.

    As I write, the eurozone has an immediate dilemma. Policymakers must stabilise the eurozone banks, permit Greece to default and remove market fears of other defaults. Agreement on this is essential, but insufficient. The euro’s flaws will remain. The powerful German economy is still locked within the same currency as weaker economies. She racks up huge trade surpluses within the eurozone while others have comparable deficits. Since Germany has an estimated 30 per cent currency advantage within the euro, this seems likely to continue. It is undesirable and unsettling.

    In a sensible world, the southern states would devalue to become competitive – but they cannot. They are locked in a single currency. And because they cannot devalue their currency, they must devalue their living standards and promote reforms to enhance efficiency. This will take years. Meanwhile, wages must fall, unemployment will rise and social unrest will increase. The severity of this medicine may not be bearable in a liberal democracy.

    Most obviously, this has an impact on Greece. Of course, it has behaved foolishly. But that does not mitigate the present pain. As salaries are cut, new taxes are imposed and other taxes rise. It is no wonder people are frightened. Some ask: why is Greece in the eurozone at all? The ease of her entry exemplifies the follies of the founders. France insisted: “You cannot say no to the country of Plato.” Maybe not, but every European is now paying the price for admitting an economically unfit nation to compete in the eurozone.

    To safeguard the eurozone in the longer term requires a fundamental change of policy. It must become a fiscal union; a union of transfer payments to off-set regional disparities; or it must shrink. The latter option – essentially expelling Greece – has political consequences.

    There is no mechanism to do it. What would Greece’s future be? Would she remain democratic in the chaos that might follow? Pushing Greece out is not a risk-free option.

    Nor is a transfer union. Germany would hate it and transfer payments would institutionalise inefficiencies. That leaves fiscal union as the most likely destination. But it has huge political consequences. It implies a far greater level of integration, and is an escalator to a federal eurozone. This may be sensible economically, but it is profoundly undemocratic. It would drive voters and decision-makers dangerously far apart. More top-down Europe imposed by a remote elite could provoke a powerful antipathy.

    A more integrated eurozone will also provoke non-euro members of the EU by driving them further away from core decision-making. They will react adversely – which is why an early announcement of fiscal union is unlikely. Instead, judicially enforceable controls over deficits, early harmonisation of corporate taxes and a permanent chairman of the eurozone are likely early moves. We are drifting towards full fiscal union: only the timescale is flexible.

    This has consequences: non-euro members will not wish to be marginalised and may sniff suspiciously at euro-core proposals, rendering decision-making even more of a hurdle. If the eurozone integrates and co-ordinates policy, non-euro members may co-ordinate too. Confrontation looms. Deeper eurozone integration may encourage non-euro member states to seek to repatriate key policies they can’t influence. The UK will not be alone in this. In the next decade, a federal eurozone will change Europe’s mosaic. Within the eurozone it will become more prescriptive; outside, a looser union could emerge. A pattern of variable alliances is likely. EFTA countries may move closer to non-euro members. One thing is certain – the EU will not remain the same.

    In the UK, and elsewhere, many are pressing for their nation to leave the EU. This is an extreme option that would throw up far more problems than it would solve. For the UK it would be a dangerous mistake but, even so, our relationship within the EU will shift. Cool heads and clear minds are needed: our future depends on it.

  • Sir John Major’s Comments on the Thirtieth Anniversary of Cricket for Change – 12 October 2011

    The text of Sir John Major’s comments on the thirtieth anniversary of Cricket for Change, made on the 12th October 2011.


    SIR JOHN MAJOR:

    I warmly congratulate Cricket for Change on its thirtieth anniversary.

    Its founders realised at the time that cricket had great healing properties, that it could do a great deal socially, as well as being a sport that people could enjoy.

    They’ve now spent thirty years developing that theme. Cricket for Change was born out of the Brixton Riots in 1981 and since then the amount of work that has been done has been quite extraordinary as the founders have used the healing properties of sport, and especially cricket in order to bring people together. A great deal has happened in that time. I remember hosting a fund-raising dinner in Downing Street in the early 1990s, and at that time I think there were just four members of the charity exclusively involved with London, there are now well over twenty.

    The development of the expertise has been so great that the UNICEF, the ICC and other bodies now turn to them for help. The original concept, as we’ve seen with the troubles in our own country this summer, is still needed.

    I believed in the aspects of this charity from the outset, I believed its aims was right, I believed its focus was right. I believed it could do a great deal. So far it has achieved all that’s been asked of it, and I’m sure there’s a great deal more to come.

    I warmly congratulate them again on their thirtieth anniversary and I look forward to what they can achieve in the next thirty years that are still to come.

  • Sir John Major’s Comments on the Financial Situation – 9 October 2011

    The text of Sir John Major’s comments on the financial situation, made in an interview on 9th October 2011.


    QUESTION:

    [Sir John was asked if the economy was in a serious state].

    SIR JOHN MAJOR:

    I think it’s pretty serious, but I think if you can reach a conclusion to the Eurozone crisis you’ll change the level of confidence and I think that will make a material difference. But at the moment you have the Eurozone pretty flat as an economy, you have American flat, you have the Chinese economy slowing and we don’t know how much it will slow, and you have the British economy teetering between no growth and tiny growth, so plainly it’s serious. And it is a different sort of recession from before because of the debt overhang.

    So yes, I do think it’s very serious.

    QUESTION:

    [Sir John was asked if the Bank of England Governor was right in saying the recession was worse than in the 1930s].

    SIR JOHN MAJOR:

    I think he’s looking at the scale of debt, if you actually look at the United Kingdom as an example, in 1997 – to pick a date at random – we had a national debt of about 350 billion, by 2010 it was 900 billion and on unchanged policies by 2014 it would be 1.4 trillion. So you begin to see the scale of the problem, and the fact it is absolutely unavoidable that you make changes in order to bring down that level of debt, because that overhang could be with us otherwise for generations.

    QUESTION:

    [Sir John was asked if everyone would have to work harder and cut back].

    SIR JOHN MAJOR:

    Certainly for a while, I don’t think there’s any doubt about that. There’s no point in pretending that the situation is suddenly going to magically come good with a bit of growth. I’m afraid we need a good deal more than that. And we’re going to have to restructure a great deal of what has happened, not least in the Eurozone which is crucial to us because we are not part of the Euro because, as you rightly say, I opted out in the Maastricht Treaty, but the Eurozone is 40% of our exports and the rest of the European Union as a whole is 50% of it, so their health is crucial to our health.

    QUESTION:

    [Sir John was asked if the Germans would transfer more money in].

    SIR JOHN MAJOR:

    I think it’s very unlikely, and the Germans have expressly been told that they won’t move towards a transfer union which is essentially what is being talked about.

    QUESTION:

    [Sir John was asked if the Eurozone would fracture].

    SIR JOHN MAJOR:

    I think it’s extremely unlikely that the European Union will fracture with nations dropping off the edge.

    QUESTION:

    [Sir John was asked if Greece would default].

    SIR JOHN MAJOR:

    It’s conceivable.

    QUESTION:

    [Sir John was asked if Greece would default within the Eurozone].

    SIR JOHN MAJOR:

    I think that is exactly what will happen and should happen. But I think that it is unlikely that the Eurozone will toss out a member, it’s conceivable that it could happen, but it would certainly be against their wishes.

    I think by far the most likely proposition, firstly you have to look at the short-term problem and then the longer-term problem. In the short-term the banks needs to be recapitalised and Greece needs to default. The sooner that happens and Greece defaults, the sooner you remove something, the overhang in the markets.

    QUESTION:

    [Sir John was asked what would happen if Greece defaulted].

    SIR JOHN MAJOR:

    What would happen is that if Greece defaulted and couldn’t pay its debts, all the Greek bonds that are held in other banking systems across Western Europe would suddenly have no value. You could, as a knock-on effect, create a banking crisis in Western Europe and French and German banks have most of the bonds. That would be absolutely catastrophic if that happened. So the Greeks mustn’t default until the Western European banks are in a position to absorb any losses that there might be without creating a banking crisis.

    QUESTION:

    [Sir John was asked if banks would be given money to fund this loss].

    SIR JOHN MAJOR:

    I think the way they may do it, I think there are two things that they could do, the first thing I think they could do is turn the European structural facility from a structural facility into a bank, give it a banking licence, let it leverage.

    QUESTION:

    [Sir John was asked if this would mean a new European Central Bank].

    SIR JOHN MAJOR:

    No, it would be quite separate from the European Central Bank, let it borrow money as banks normally can from the European Central Bank and either buy up the Greek bonds to remove the danger, the contagion from the Western banks, or use the resources to recapitalise the banks so they can bear the losses.

    That seems to me to be the first thing that has to happen, and then it would be thoroughly desirable, in my view, to get the Greek default out of the way. It’s a terrible overhang in the market, it’s partly priced-in, let’s get it done and then we can move on to the longer term.

    QUESTION:

    [Sir John was asked why he didn’t join the Euro].

    SIR JOHN MAJOR:

    There were three arguments, the first was that if you had a monetary union without a fiscal union it’s like a two-legged dog.

    The second argument, at Maastricht we produced some safeguards – although I opted out at Maastricht, we produced some safeguards – one of them was that no European nation would have a fiscal deficit of more than 3%, and the second was that before the Euro was formed the economies of those nations going into the Eurozone should converge, and by that piece of jargon we meant that they should operate at broadly the same level of efficiency. That didn’t happen.

    In the late 90s the French and Germans began to worry whether the Eurozone would ever happen, so they went into the Euro without the convergence. That was the tragic mistake, it shouldn’t have happened.

    Thirdly, when the Germans and the French went beyond the 3% deficit, the Commission took no action against them and everybody else did too, so you got this burgeoning level of debt that began to spread everywhere.

    QUESTION:

    [Sir John was asked if the Euro would change].

    SIR JOHN MAJOR:

    It will have to change, I think it will have to change.

    QUESTION:

    [Sir John was asked about the flapping of white coats].

    SIR JOHN MAJOR:

    No, the flapping of white coats was on a quite separate matter – and I don’t withdraw the remark. The substance of the argument is exactly the same as I advanced at Maastricht.

    QUESTION:

    [Sir John was asked whether the Euro-sceptics had been right].

    SIR JOHN MAJOR:

    They were partially right, but only partially right, and I will come to the situation as I saw it. The need for fiscal union is something we foresaw at Maastricht, which is why we opted out at Maastricht, that was right and is right.

    What is now I think going to happen, albeit in a crab-wise fashion, I think the Eurozone members will have to move towards a fiscal union. I don’t think they will suddenly say they are going into full-scale fiscal union, it would need a treaty and all sorts of other things.

    What I think they will do is produce legislation within the European Union that makes the control of fiscal deficits, the harmonisation of tax and matters like that, much more controlled from the centre. So they will be moving towards a federal state within the Eurozone and they will be moving to it out of failure and not out of success, that is the point.

    It then gets to the position where you have an inner-core within the Eurozone that is operating much more deeply and closely together than the rest of the European Union. And if you remember in the 1990s, Douglas Hurd and I, we called it variable geometry, and we saw a much looser European Union in which people opted in instead of opting out, and it wasn’t such a tremendously prescriptive union which everybody had to be a part of.

    That is the direction over the next decade, slowly, in which I think we will be going.

    QUESTION:

    [Sir John was asked if there would be a referendum on a new treaty].

    SIR JOHN MAJOR:

    There won’t necessarily have to be a treaty in this country for fiscal union. In terms of fiscal union it is conceivable that there will be a treaty just among the members of the Eurozone, so don’t overlook that possibility.

    QUESTION:

    [Sir John was asked if the referendum could be about a federal Europe that Britain wasn’t a member of].

    SIR JOHN MAJOR:

    I think that is conceivable. There are a dozen different ways in which this could unwind and frankly nobody can be certain which way it will go at the present time.

    But it is possible that there will be a fiscal union amongst the Eurozone members, they would have their own treaty. But at some stage there will be another treaty because if there’s fiscal union in Europe, it changes our relationship with Europe. That is the fundamental point.

    QUESTION:

    [Sir John was asked if powers should be transferred].

    SIR JOHN MAJOR:

    I think it gives an opportunity for two things, firstly, it gives us an option to negotiate for the looser form of Europe that I would like to have seen in the 1990s and we got no traction when Douglas Hurd and I argued for that then. I think it presents that opportunity. And secondly, I think there are some areas that are worth looking at, and this isn’t anti-Europeanism or Euro-scepticism. There are some areas which it would be worthwhile to repatriate.

    Fishing is one. There are elements of employment law, it used to be in the Social Chapter and has now spread, you will recall that I opted out of that in 1992 because I saw it as a job destroying mechanism. Now it has changed but the things like the working time directive, which I think is a very foolish piece of legislation, we could look at repatriating part of it.

    Clearly, financial services is another area. There has been a lot of talk about the financial transactions tax, I don’t think that will happen, for a range of complex reasons, but even so, financial services are crucial to the well-being of the British nation, it is what drove our growth – over-drove it as it happened – over the last twenty years or so.

    We really don’t want a whole series of restrictive notions damaging our financial structure in this country.

    QUESTION:

    [Sir John was asked if this was a new opportunity for Britain].

    SIR JOHN MAJOR:

    Europe changed fundamentally when the Europeans ignored the safeguards in the Maastricht Treaty and proceeded to an unsafe Eurozone, which they did in 1999 without any bark of protest from the United Kingdom. That changed it, that changed everything, because the Eurozone was no longer going to be a stable instrument, we were going to be outside it, but it could have been stable and it wasn’t. And that was a significant change and now I think there is an opportunity.

    I don’t see this as a Euro-sceptic attack on Europe, I see that with 27 nations within the European Union it has to change. It cannot be the same as with 15 nations or with 6.

    QUESTION:

    [Sir John was asked whether quantitative easing was right].

    SIR JOHN MAJOR:

    It isn’t George who has just quantatively eased as it happens, it’s the Governor of the Bank of England, and I think the Governor is right to do so.

    When you consider how much of our economy is driven by exports and you then see what is happening to our markets overseas, I think the Bank of England are right to quantatively ease. I think he is right. But more valuable might be the proposals put forward by the Chancellor himself to direct money specifically to parts of industry.

    QUESTION:

    [Sir John was asked about Liam Fox and what the Prime Minister should do].

    SIR JOHN MAJOR:

    It’s extremely difficult to handle these, either natural justice requires that you have to wait a long time and you’re then said to be incapable of making decisions if you operate under natural justice. Or you move too speedily and you’re said to be ruthless, so I don’t know what the situation is, the Prime Minister has asked for the facts to have a first look on Monday, and I think that is right.

    From the Prime Minister’s perspective he has to balance natural justice and the truth, rather than the gossip, the rumour and things that may be true, but I’ve no idea whether they are or not.

    QUESTION:

    [Thank you].

    SIR JOHN MAJOR:

    Thank you, my pleasure.

  • Sir John Major’s Statement on the Mull of Kintyre Crash – 13 July 2011

    The text of Sir John Major’s statement on the Mull of Kintyre crash, issued on Wednesday 13th July 2011.


    SIR JOHN MAJOR:

    The crash into the Mull of Kintyre in 1994 was a terrible tragedy. Many lives were lost, and many families left bereaved. It was especially painful for the families of the two pilots who were blamed for the accident.

    The evidence to support this decision – although taken in good faith – was always questionable, and we may never be certain what happened. In these circumstances, I warmly congratulate Liam Fox for exonerating the pilots from blame. Natural justice demanded this outcome, which I am sure will be a great comfort to their families as they – and others – continue to mourn the loss of the brave people who lost their lives over the Mull of Kintyre, in the service of their country.

  • Sir John Major’s Comments at Wormsley Cricket Ground – 10 July 2011

    The text of Sir John Major’s comments made at Wormsley Cricket Ground on Sunday 10 July 2011.


    QUESTION:

    [Sir John was asked about the wonderful Day at Wormsley and whether he was pleased to be here]

    SIR JOHN MAJOR:

    Wormsley is an absolutely magical place, and today of course, with the England Ladies playing the House of Commons to raise money for very good causes. It’s just a wonderful afternoon. I know no lovelier ground than this. I can’t think of anywhere one would rather be on a summer’s afternoon than here. It’s absolutely glorious.

    QUESTION:

    [Sir John was asked about England Women’s Cricket]

    SIR JOHN MAJOR:

    The England Ladies are the best ladies team in the world, they’ve won everything that’s going at the moment. So they’re in absolutely superb form and I think we have every reason to be proud of them.

    QUESTION:

    [Sir John was asked how many cricket matches he had attended]

    SIR JOHN MAJOR:

    I have absolutely no idea, but the only answer that I can give to that is, not enough. Many more to come I hope.

    QUESTION:

    [Sir John was asked if he felt the women’s cricket team was doing well]

    SIR JOHN MAJOR:

    They’re certainly doing so at the moment. Thank you very much.

  • Sir John Major’s Ditchley Annual Lecture Speech (Ditchley Foundation) – 9 July 2011

    The text of Sir John Major’s Ditchley Annual Lecture speech, made at Ditchley Park in Oxfordshire, on Saturday 9th July 2011.


    SIR JOHN MAJOR:

    First, let me add my welcome to Jeremy and Anne Greenstock and John and Penny Holmes.

    Jeremy and Anne have been great servants of Ditchley; John and Penny are already showing they will be. We are lucky to have them.

    When John invited me to speak to you today, I was very reluctant to accept. I was dismayed that, once again – with impeccably bad timing – the Ditchley Lecture clashes with a Test Match. I also recalled some outstanding Lectures at Ditchley over recent years. I nearly said – No.
    I didn’t, because there are things to be said, questions to be asked – and ideas to be floated – that can more easily be done by a former politician than a current one. And where better than Ditchley – for so long a home for rational thought and considered debate? An oasis of calm in a world of frenzy.

    Every time I come here I am reminded of our debt to David Wills – and now, Lady Wills and Catherine.

    I just want to say to Eva and Catherine: we owe you more than we can repay.

    In preparing for today, I took to heart GH Hardy’s observation that one ought never to waste time stating a majority opinion. I will try and follow that advice.

    Accepted opinion is often wrong. Even more often, out of date. And, frequently, complacent.

    Let me say at the outset that nothing I say should be taken as a trial balloon for anyone else. I speak for myself alone and – reluctantly but possibly – will offend political friend and foe alike. Nevertheless, I shall set out what I believe Western Governments must do to secure our well-being, in a world that is moving faster than we are.

    This world is digitalising, urbanising and ageing. It is also migrating. The age of the single language, single culture state is over. Medicine, science and technology are carrying us where we have never been before. Social networks can elect Presidents and foment revolution. Global markets have outstripped the control of nation states.

    The world of 20 years ago, let alone 50, has long since vanished. In every field of human endeavour – and nearly every aspect of life – yesterday’s certainties are today’s imponderables and tomorrow’s dilemmas.

    The future raises uncomfortable questions, and even more uncomfortable answers. Some challenges are domestic, others can be resolved only by collective action. And, even if they are faced, and even if there are successful outcomes – and these are two big “ifs” – they will merely head off future problems.

    Pain now for gain later has never been an easy sell for politicians and, in a social climate that expects instant gratification, it becomes even harder. It was easier being a politician yesterday than today. And it is easier today than it will be tomorrow.

    The core question is: what must our Governments do to ensure our future prosperity? Must we change our policies, our expectations, our tribal politics – or all of these? It simply defies logic that the whole world can turn upside down, while we meander on in the same old way.

    At stake is our material well-being – and our status in the world – in 20, 40, and 50 years’ time.

    Some may say the battle is lost – that this will be China’s – and Asia’s – Century. I don’t believe that is pre-ordained. China, in particular, has many problems. The Communist philosophy is discredited. Her Government is not elected. Its only legitimacy is growth.

    In China and Asia, we are already seeing that rising living standards will bring greater demands – for social welfare, pension and much else besides – that will eat away at their present competitiveness.

    So this economic triumph of the East isn’t assured, but we do know they will be formidable competitors. So how are we placed to respond?

    Our present position, to put it mildly, is uncomfortable. It is axiomatic that every generation has an obligation to pass on to its successor something better than they themselves inherited. In recent times, we have failed.

    We have spent tomorrow’s money on yesterday’s gratification, and there is something immoral in that. And we have presided over a systemic financial collapse that has forced the prudent to bail out the reckless. There is something unjust in that.

    This is a sharp reminder that our democracy doesn’t guarantee efficiency. The democratic checks and balances we so cherish can become roadblocks. The tyranny of the electoral cycle can push politicians to short-term decisions.

    Equality replaces quality. Sound-bites stand in for home truths. It feels odd to point up the short-comings of democracy, when it has achieved so much – but if we don’t recognise them, we can’t correct them.

    Democracy has entrenched an enviable liberty of thought and action and presided over a quality of life our forebears could not have imagined. We are safer and, until now, richer. It has had a civilising influence. We have learned that decent people come in all colours. We abhor racism and bigotry. We have developed good human instincts of care and compassion.

    In due time, electors can vote Governments out and mostly they depart peacefully into Opposition. No wonder it is widely admired and copied. It has served us well but, on its own, democracy will not secure our place in tomorrow’s world.

    ECONOMY

    The financial crisis has highlighted a reality the West can no longer ignore: our days of easy economic supremacy are over.

    The drift is undeniable. The West has lost its competitive edge against China, India, Indonesia and Brazil as well as many smaller countries, notably in Asia and Latin America. Financial firepower is moving from West to East. Thirty five years ago, the fifteen core countries of the EU accounted for broadly 36% of global GDP, and Asia only 16%. Projections suggest that, in twenty years’ time, that will almost precisely have reversed. As we stutter, the rest of the world grows.

    America has, largely, held decline at bay: but, even so, her share of global GDP has fallen from 26% to 23%. Economically, in one lifetime, the world will have turned on its head.

    It’s easy to see why. Where ambition confronts complacency, ambition wins. In countries that are one generation away from poverty I see a passion and drive for success that sweeps away barriers. Even if we are aware of the tidal wave of competition that is coming, we have not prepared for it. We are falling behind and at risk of falling further.

    We shouldn’t deceive ourselves this is simply the fall-out from the financial crisis. It is a long-term trend.

    Some see no danger. They argue that the West can be sanguine about Eastern competitiveness because our quality of life is so far ahead.

    Such people should get out more. Let me cast an unforgiving eye on that complacency: the UK first.

    In terms of GDP, the UK is the sixth most wealthy country in the world. But our national Balance Sheet carries many liabilities. Our physical infrastructure is old. Our health service is creaking. Whilst the best of our education – especially higher education – is world-class, some of it is unforgivably awful.

    We are up to our ears in debt. The Exchequer is empty. The Gold is gone. The post-dated cheques are accumulating interest. We are over-taxed. We have an under-class: poorly educated, poorly housed and unmotivated.

    We are no longer an Empire, nor will be ever again. Today, we are a shrinking military power. By choice, and with majority public approval, we are semi-detached members of the EU. And even America – for so long our closest ally who generally sees the world as we do – is turning her face to the East, as self-interest determines she must.

    There is absolutely nothing here to be complacent about.

    America faces many similar problems – most obviously debt, which was 40% of GDP in 2008, 69% in 2011, and is projected to be 85% by the end of the decade – and rising. Yet only about one-half of the population pays federal income taxes.

    The risk remains of the US Treasury defaulting on its debt as it runs up against the legal limit it can borrow. I daresay a compromise will be reached, but this flirting with brinkmanship is dangerous. The collapse of Lehman Brothers was catastrophic. A Treasury default could be as bad. I hope those playing political games realise that the effect of their actions could spread far beyond America.

    In the foremost free market economy in the world, average household debt comfortably exceeds average annual income. And a rising proportion of that income now comes from the State.

    About 45 million Americans now receive food stamps: the modern equivalent of bread lines. Medical costs threaten to spiral out of control.

    Huge housing debts held by Banks are not written off: if they were, there would be lower profits, and lower bonuses. Total mortgage debt has quadrupled in 20 years. Today, there are two million mortgages not being paid.

    And so the merry-go-round continues: Banks are still lending 95% mortgages on a falling market at a multiple of income: admittedly now – they say – only to more credit worthy customers. No one should assume the financial crisis cannot be repeated: it certainly can. But, if it is, it will be unforgiveable.

    EUROPE

    As for Europe – the word is engraved on my heart. Northern Europe is healthy but Southern Europe is sunk in debt and uncompetitive. The EU as a whole is divided on how to handle budget deficits, the crisis in the Eurozone, control of the Central Bank, nuclear policy, as well as how to react to Libya, Afghanistan and the Arab/Israeli conflict.

    Twenty years ago, led by France and Germany, a confident EU was paving the way for the Euro. The assumption in the European Council was that, before the Euro could be launched, the economies of nations wishing to be part of it would converge: by that piece of jargon, we meant operate at broadly the same level of efficiency.

    But that didn’t happen. It was politics – not economics – that launched the Euro in the late 1990s. Sterling did not join because, in 1992, I had opted out of the Euro at Maastricht. I didn’t do that out of sentimentality for the Pound – nor to placate sceptic opinion. If I’d wished to do that – with my Party or the Press – my life would have been much more comfortable. I didn’t. It wasn’t – because I thought then, and argued then, that the concept had flaws.

    Today, Germany – with its powerhouse economy – is locked within the same currency, at the same exchange rate, as the weaker economies of the Southern European States.

    In a sensible world, the Southern States would devalue but – of course – they can’t and so, to become competitive and stay in the Eurozone, they must devalue internally. Unemployment will rise, wages must fall, and so must living standards.

    This threatens Greece, Portugal, and – possibly Spain and Ireland – with many years of austerity. As we see in Greece, the scale of that austerity may not be acceptable in a liberal democracy. Meanwhile, others power ahead.

    It is not immediately clear how Europe will resolve this dilemma. But the present position is unsustainable. Either the EU becomes effectively a Union of transfer payments to offset regional disparities (as happens in Canada), or it creates a mechanism to shrink the Eurozone. Nothing else makes long-term sense.

    Germany and France will not permit – cannot afford to permit – a reprise of the present crisis. In Germany, in particular, it is causing immense political agony. When the President of the ECB proposed a European Ministry of Finance with power to intervene in national economic policies, he caused commotion. But something will have to be done. Somehow, binding rules will be imposed on debtors.

    Despite Eurozone members insisting they will not surrender fiscal sovereignty, it is not hard to look ahead and imagine a Eurozone with fiscal – as well as economic – union, in practice if not in name. I don’t like this – it was a prime reason for not joining the Euro – but, if it happens, it may have the effect of pushing the UK further away from the mainstream of the EU.

    The UK is often accused of being half-hearted over its commitment to Europe. Continental politicians bemoan our caution. “If only the UK took up its responsibilities” … it is a familiar theme, and we will hear more of it.

    Let me respond. I am not anti-European. I am not a sceptic in the accepted sense. I never have been. I see the nobility of intent in binding together nations that fought one another over many centuries.

    I see the economic advantages of the single market, and the political advantages of extending democracy to nations that were locked in the Soviet embrace. But I am wary of many European policies. If they are flawed, or unworkable, or alien to our instincts, our Government has a duty to question them.

    Where we can work together, let us do so. That is sensible. But the Union cannot succeed if nations are – sullenly and resentfully – bound into policies they believe are damaging to their national interest. Far better to plan for a multi-speed Union, with nations opting-in to policy rather than opting-out. In a 27 Nation Union, I believe we will come to that, although it is far from the ambitions of some of our partners.

    If the UK is semi-detached, that is only, in part, because of British scepticism: it is also because the EU has chosen, time and again, to go in a direction they know Britain cannot follow. Every recent Prime Minister has ended up less European than he – or she – began.

    As to the future – it is difficult to see where Europe is going. Some would like to break away entirely from the EU. In a world in which many policies need collective action, that would be folly. If we are drifting apart, there is cause to beware: it is time to take stock.

    GOVERNMENT/POLITICAL SYSTEM

    In the search for future well-being that is true of our political system as well. At the moment, neither American nor British politics is in a state of grace. It has become too inward-looking. Too short-term. Our systems embrace politicians, and carry them off to a world the rest of us don’t inhabit. It’s time to bring them back. And focus them on the far distance as well as tomorrow.

    There is a fault line in our national policy-making processes:

    When do politicians have time to think?

    There is time to do, based on advice.

    There are policies to advocate, based on conviction.

    There are people to placate, based on necessity.

    But, in Government, too often, senior politicians are fire-fighting yesterday’s problems instead of thinking how to fore-stall tomorrow’s.

    Would it not be better to carve out sufficient time so that – routinely – they can frame policies to safeguard our future in 20/50 years from now?

    And – if they did think and plan far ahead – it would give them time to explain, to cajole and to carry electorates with them in controversial policy. That’s never easy – as we see today.

    To help bring this about, we should encourage governments to devolve more and do less: in some areas, we are ludicrously over-governed. The nanny state may be well-meaning, but it is also stifling.

    I am one-quarter American, so I hope I might be forgiven for speaking bluntly. At the moment, the American political system is dysfunctional.

    It is easier to stop good policy than to pass it. Bi-partisan co-operation is grudging and limited. Moreover, it is getting worse as re-warding of congress and district boundaries makes seats safer for Republicans or Democrats: the inevitable effect is fewer “middle of the road” candidates being elected. The first loser is compromise. The ultimate loser is sensible, non-ideological policy.

    The power of special interest lobbies is excessive. There have been 27 Bills affecting Energy over recent years where the representatives of six States, irrespective of Party affiliation, have voted for the Coal lobby position on over 80% of votes. In the Senate, this has been sufficient to block anything the industry does not favour. This is not in the national interest. It is naked self-interest. Sadly, it is not the only example (in domestic or foreign policy).

    I remember former Presidents bemoaning the introspection of Congress – my expression, not theirs – and their concern that only a minority of its Members travelled overseas to see the world for themselves. Since American foreign policy affects us all, this is lamentable.

    But it’s easy to see why. A competitive election contest in New York, or New Jersey, home to the most expensive media markets, could cost a candidate $10 million. On average, candidates must raise over $1.3 million to fight each campaign. And campaigns come every other year.
    To fight these elections, the average candidate must raise over $50,000 each and every month. No wonder they don’t travel. Such frequent elections also create obligations to donors – and lobbies. They put a premium on short-term populist policies.

    It would make for far better decision-making if elections were less frequent and there were limits on spending. This might also cut down on negative campaign advertisements, the net effect of which is simply to damage the reputation of politics.

    I claim no superiority for the British system.

    For generations, Britain has basked in the glory of our Parliamentary system. Much of the world flatters it as an example of a mature democracy, a supreme Parliament, an independent Judiciary and an impartial civil service.

    I cherish the traditions that add majesty to Parliament. Yet even I, who look at Parliament with affection, can see it must be made more efficient.

    We could begin by widening the pool of talent prepared to enter politics, by removing some of the disincentives to do so.
    I would pay MPs a fixed and generous salary, and cut out all living allowances. This is not entirely fair to Members with remote constituencies, but life is not fair – and such a system would avoid the recent scandals that have done so much harm to Parliament.

    We need, also, to attract to the Commons men and women at the top of their profession. It is one of the oddities of democracy that fundamental policy choices are made by men and women who, apart from the legitimacy of election and a native intellect, have no qualifications to make them.

    How many MPs can bring direct knowledge to how banks should be regulated? Or how hedge funds work? Or are familiar with e-money? Or nuclear energy? Or the social and medical implications of embryology?

    We would benefit from our legislators having more practical knowledge.

    Of course we can hire specialist advisers, but that can never be as effective as influential, knowledgeable voices speaking with expertise in the Chamber, in the Committees, in the tea rooms, in Party meetings.

    There is no solution to this dilemma that doesn’t cut across our traditions, and so I would do just that. Why not elect fewer Members of Parliament and appoint, on a basis pro rata to votes cast in the General Election, a similar number of Members without constituencies?

    I know the familiar arguments against this – a few years ago I would have used them myself forcibly – but, on reflection, I now believe enhancement of the talent pool is so vital it justifies the changes.

    If the Commons baulks at a further reduction in its Members then, as Douglas Hurd and I have argued before, let us appoint unelected Ministers, answerable to Parliament, but without being Members of it. Or, of course, let us do both. Douglas and I have argued also for fewer Ministers and fewer PPSs: we have far too many of each: they could be severely cut back.

    At the moment, all three major Parties are committed to an – at least partly – elected House of Lords. The Lords does need reform. It has too many inactive Members. It is too big and unwieldy. But election is the wrong reform.

    The case for election is democratic legitimacy. However, if we want an efficient legislature, the case against is far more compelling.

    An elected Upper House would cease to be a revising Chamber and would demand more powers that could only come from the Commons.

    There would be confusion and conflict. We should be reducing the number of politicians and adding to their quality. An elected Lords would add more politicians and reduce their quality. That is a bad bargain.

    Does anyone imagine that Chiefs of the General Staff, Cabinet or Permanent Secretaries, Captains of Industry, Chancellors of Universities, Professors of Medicine would stand for election?

    Of course they wouldn’t, and elected replacements could never bring such a depth of knowledge to the scrutiny of legislation. If the answer is more elected politicians, we are asking the wrong question.

    A better reform would be to improve Parliamentary procedures. Cut the number of whipped votes. And reform PMQs to discourage its vaudeville element.

    I offer only one further of many options. Parliament’s workload leads to legislation being poorly scrutinised, and often shown to be defective. In Criminal Justice alone, 68 sections and 25 schedules of 19 Acts remain unimplemented: many because they are unworkable.

    Why not subject all mainstream Bills to Select Committee scrutiny and public evidence before final drafting? If we did so, we would get better, more relevant, and more coherent, new laws.

    And must the Westminster Parliament oversee so much? I think not. It would be more efficient if it were less over-burdened.

    DEVOLUTION OF POWER

    There are options:

    Pass fewer laws – which is attractive, and to be hoped for: though I’m not holding my breath.

    But we could contract more to local government and devolve more to the Scottish, Welsh and Northern Ireland Assemblies. In a cautious and incremental way, the Coalition is taking action to do this. I welcome that and encourage them to go further.

    Some years ago, I opposed the creation of local Mayors. I was wrong. Mayors do put in place a dynamic and – as successive Mayors of London have shown – they can be effective megaphones for our big cities. But under present plans, Mayors will only inherit the existing powers of Council leaders: in future, I hope their remit can be widened.

    There is one caveat: their power of decision should be real, not illusory, and this implies a funding responsibility to pay for – at least the majority of – their policies. When next we look at local authority finance that should be the objective.

    Devolution can also reduce the Westminster workload. But there is some groundwork to be cleared first. The present quasi-federalist settlement with Scotland is unsustainable. Each year of devolution has moved Scotland further from England. Scottish ambition is fraying English tolerance. This is a tie that will snap – unless the issue is resolved.

    The Union between England and Scotland cannot be maintained by constant aggravation in Scotland and appeasement in London. I believe it is time to confront the argument head on.

    I opposed Devolution because I am a Unionist. I believed it would be a stepping stone to Separation.

    That danger still exists. Separatists are proud Scots who believe Scotland can govern itself: in this, they are surely right. So they point up grievances because their case thrives on discontent with the status quo. But even master magicians need props for their illusions: remove the props, and the illusion vanishes.

    The props are grievances about power retained at Westminster. The present Scotland Bill does offer more power to the Scottish Parliament.

    But why not go further? Why not devolve all responsibilities except foreign policy, defence and management of the economy?

    Why not let Scotland have wider tax-raising powers to pay for their policies and, in return, abolish the present block grant settlement, reduce Scottish representation in the Commons, and cut the legislative burden at Westminster?

    My own view on Scottish independence is very straightforward: it would be folly – bad for Scotland and bad for England – but, if Scots insist on it, England cannot – and should not – deny them.

    England is their partner in the Union, not their overlord. But Unionists have a responsibility to tell Scotland what independence entails.

    A referendum in favour of separation is only the beginning. The terms must then be negotiated and a further referendum held.

    These terms might deter many Scots. No Barnett Formula. No Block Grant. No more representation at Westminster. No automatic help with crises such as Royal Bank of Scotland. I daresay free prescriptions would end and tuition fees begin.

    And there is no certainty of membership of the EU. Scotland would have to apply, meet tough criteria, await lengthy negotiations and would find countries like Spain – concerned at losing Catalonia – might not hold out a welcome for Separatists. And, even if Scotland were admitted, they would find their voice of 5 million is lost and powerless in a Union of 500 million.

    But it must, ultimately, be their choice.

    SOCIETY

    Reforms within politics can – I believe would – improve policy-making, but it is the guts of policy that really matters. I simply observe that in considering future policy every Minister should ask one question: does this improve our long-term ability to compete and grow? If it does – good; if it doesn’t – think again.

    Growth is not just a matter of economic policy. Social policy is a part of the competitive structure – not apart from it. To grow, we need to improve our human infrastructure.

    EDUCATION

    Education and skill attainment are as crucial to economic success as cash investment. In the ancient world, Plato taught Socrates who taught Alexander.

    Rather more recently, Tony Blair famously declaimed “Education, Education, Education”. I had the same priorities but in a different order.

    Neither of us was original. Lenin first said it in 1917.

    And we were all right – except that we failed. And among the alienated and the under-educated, how much talent is lost? How many lives are wasted and unfulfilled? How high is the social and economic loss? Money has been put into education but the return on investment has been disappointing.

    It is a reproach to every Government over the last 40 years that employers routinely bemoan the numeracy and literacy of far too many school-leavers. As a Nation, we can’t afford that.

    A recent OECD survey, based on science, maths and literacy, put America – once top – at 26th, and the UK even lower: eight of the top ten performers were emerging Asian States. This isn’t some remote trend we can ignore: our children and grandchildren will be in direct competition with these young Asians.

    One reason for Asian success seems to be that they have invested heavily in teachers. Paid them well. Trained them well. And built up their prestige and social standing. As a result, they have attracted their brightest and best into the profession.

    Parents, too, have a responsibility for their child’s education. Too many opt out – none should.

    Events in California, in 1996, are suggestive. After positive discrimination had resulted in low graduation results and high drop-out rates, “Proposition 209” banned any reference to race, sex or ethnicity in University admissions.

    Students were selected purely on their Grades. Admissions from Asian Americans soared. The only explanation for this was parental influence. There is a lesson here. However good teachers may be, the role of parents remains the single most important input into any child’s life opportunity.

    If, as most of us accept, the economic future of the West lies, in part, with maintaining a technological advantage, we must produce the relevant skills. But we are just not doing so. China is producing over three times as many engineering, science and IT graduates as the United States. And over three times as many Chinese graduates at the top-most level with PhDs.

    In the UK, in the decade to 2007, there was a fall of nearly one-third in single honours chemistry courses, and 14% in physics. The West had better focus on the fact that Asian manufacture is already moving up the value chain.

    No Government is always right. Or wrong. In the UK, I applaud warmly the high ambition of Ministers in the previous Government who argued for long-term social reform. My only regret is that others, more senior and less far-sighted, sometimes over-ruled their efforts.

    “Thinking the unthinkable” was ditched. That was a pity.

    I welcomed their early ideas – as indeed I should: many of them were my ideas long before they were theirs, and – in some cases – Margaret’s before they were mine.

    That doesn’t matter. In a good cause, I welcome policy kleptomania. As someone who was opening Academy Schools 20 years ago, I was genuinely delighted when Andrew Adonis developed the policy and successfully carried it forward.

    Education is not our only social policy failure over decades. In our broadly prosperous country, there are still far too many graffiti-ridden slums, on soul-less Estates, in run-down areas, that dis-incentivise those who live there.

    There are too many neighbourhoods where unemployment has become a way of life; where an existence on social benefits seems normal.

    For too many people, self-determination has morphed into a belief in self-entitlement, where no-one is responsible for anything, and welfare is a legitimate career choice. America has problems that are similar in character.

    The Coalition is now embarked on reforms to health, education and social security that are long overdue, controversial and necessary. As Labour built on Conservative policy, now Conservatives will build on Labour’s.

    I hope everyone, irrespective of Party, who agrees with these reforms will support them publicly when Ministers face the inevitable protests that are to come. It will be a lost opportunity if they are sacrificed to our adversarial political system.

    Within the compass of my direct experience, I have tried to look forward. I have focused on what is not working well. But I am optimistic.

    The Western democracies always over-estimate what they can do in the short-term and under-estimate what they can achieve in the long-term. If we accept what needs to be done – we can do it. But – as Goethe noted – “until one is committed, there is hesitancy”. We must be committed.

    I would like to see a senior Minister, of Cabinet rank, given responsibility for “The Future”. His or her role would be to cast an independent eye on what needs to be done that is not being done; and what is being done that could be harmful in the future.

    Such a Minister would be the voice of the next generation. The conscience of the Government. The guarantor of the legacy. To do the job well, he or she should be an enormous irritant to Departmental Ministers and the Treasury but, with the backing of a committed Prime Minister, would ensure the interests of the next generation are not sacrificed on the altar of immediate consumption.

    Mr. Chairman, time is a tyrant and I have only skimmed the surface of policy for tomorrow.

    I have not touched on traditional foreign policy issues – much as I wished to: that must await another occasion. On that, and on so much else, there is a great deal to be said and – as my Grace Note – let me observe that those of us gathered here are well-placed to say it.

    CONCLUSION

    We are, or were, the Establishment – or part of it. Some still are. We are winners in the Ovarian lottery. Gathered here are intelligent, civilised men and women, skilled at diplomacy and dispassionate judgement. If the late John Osborne were to categorise us, it would not be as “Angry Young Men or Women”, but as “Mellow Old Achievers”.

    We are, many would say, the past: Neanderthals from the pre-internet age. But we have one huge advantage: we have seen the world as few others have seen it. So I want to end with a plea. It is that – in an age that glorifies youth – we should use our collective experience to help signpost a path for the future.

    We may have a shorter lease on that future than the young, but they are our young, and we have an obligation to care about their future.

    Whether British, or American, or Continental European, the task facing our respective Governments is herculean. We can stand aside, shrug our shoulders and smile benignly on their efforts, our own work done. Or we can pitch in and help them.

    That, surely, is the right thing to do.

  • Sir John Major’s Article on Aid – 5 June 2011

    The text of Sir John Major’s article on the aid budget, published in the Sunday Telegraph on 5th June 2011.


    SIR JOHN MAJOR:

    Cameron’s stance on Aid is right

    Ahead of a global summit in London on vaccinations for the developing world, former Conservative Prime Minister John Major argues that David Cameron’s commitment to Aid is bold, necessary and right.

    It has become fashionable in some quarters to see the Coalition Government’s decision to protect the life-saving Aid budget as a sign of waste and futile modernisation. The argument runs something like this: the Conservative Party’s commitment to tackling global poverty and disease was never anything more than a handy fig-leaf of modernisation, designed to win over liberal-minded voters; now that times are tough it should be discarded. And it doesn’t really matter because – in any event – it’s all wasted anyway.

    This argument is wholly wrong. Its advocates miss two critical points: first, that our Party’s commitment to Aid pre-dates David Cameron and is based on conviction not calculation; and second, that every pound of Britain’s – still relatively small – Aid budget is amongst the best value of any Government spending.

    Our Party’s commitment to protecting the Aid budget was made six years ago when Michael Howard was leader. It was driven – not by electoral calculation – but by a sober assessment of Britain’s place in the world, of the immense need in developing countries, and of the significant changes in the effective use of Aid over the last 20 years. The UK is still, of course, one of the wealthiest economies in the world.

    Let me put this into context: there are around 4 million children in primary school in England – but, in developing countries, twice this number die every year before their fifth birthday . Again, in developing countries, a woman dies from pregnancy or childbirth every 90 seconds . This cannot be morally acceptable.

    When spent wisely, Aid works: UK funding saves three million people from poverty each year. It has helped to eradicate smallpox; reduce polio cases from 350,000 a year in 1988 to just 1,500 last year; and increased the number of people on vital anti-Aids drugs from 400,000 in 2003 to more than 4 million in 2008. A child can be immunised against the killer childhood diseases for less than one would pay for a cup of coffee. It’s no surprise that Bill Gates and Warren Buffett, the high-priests of global capitalism, have chosen to focus their vast philanthropic energies on tackling killer diseases in poor countries. If the private sector can do this, should not responsible Government do so as well?

    Next week, the UK is hosting an international summit to drive new pledges by charities, countries and businesses for the Global Alliance for Vaccines and Immunisations [GAVI]. With the right support, the GAVI Alliance will be able to vaccinate one quarter of a billion of the world’s poorest children, saving millions of lives and giving millions the opportunity to grow up to become healthy, productive members of their communities and the wider world. No decent person would tolerate a British child dying from diarrhoea, yet this is a daily reality for thousands of families across the poor world.

    The Government’s agenda is to drive even stronger value for money from our Aid spend. Andrew Mitchell and his team have led a bold shake-up of Aid, based on a hard-headed assessment of efficiency. Support to under-performing UN and international institutions has been axed, with the savings directed to more efficient and effective organisations like UNICEF. Aid to China and Russia has been stopped and redirected to poorer countries. A programme of total transparency will allow people to track where money is going – and shout if it doesn’t get to the people who need it. A much greater emphasis has been placed on using our Aid to support the building blocks of wealth creation: private property rights; cutting back red tape and overregulation to attract investors and support local entrepreneurs; and promoting free trade within Africa so as to unclog the arteries of trade and growth. Critics of Aid should recognise and welcome these changes.

    Aid is more than just charity. Britain is a global development superpower, respected for the quality as well as the quantity of her Aid. As the Prime Minister has said, most people in this country want Britain to stand for something in the world, and be something in the world. Aid tells the world our nation has a heart as well as a head. Alongside our world-class armed forces and outstanding diplomats, Britain’s support for those suffering pandemics, earthquakes and droughts helps secure us respect and influence that are real, tangible and liquid.

    Aid is not just from Britain, it is also for Britain. If we don’t invest in countries that are broken – like Somalia and Afghanistan – before they reach the point of despair, we end up paying the price if that despair leads to terrorism, crime, mass migration and environmental devastation.

    I am proud that the Government I support has the courage of its convictions on global poverty. Of course these are tough times at home. But there are even greater hardships being suffered by those who live in the kind of abject poverty few of us can ever imagine. The Prime Minister is absolutely right to pursue this policy with vigour. We, as a nation, should be proud that our humanity and generous spirit will reach every corner of the world – and we will all be the richer for that.

  • Sir John Major’s Speech at the University of Kurdistan-Hawler – 29 May 2011

    The text of Sir John Major’s speech at the University of Kurdistan-Hawler, given on Sunday 29th May 2011.


    SIR JOHN MAJOR:

    Thank you, Sarah, Vice-Chancellor, for hosting me in this wonderful auditorium, and for inviting students from the Universities of Kurdistan-Hawler and Salahadeen.

    I am delighted to be here.

    From my own country – a long way away – I witnessed the bravery of the Kurdish people following the end of the first Gulf War. Many Kurds were being brutally murdered by Saddam. In the United Kingdom we were horrified at what we saw, and led the way in establishing “safe havens” in the Kurdistan Region. Seeing all of you here today proves how worthwhile that action was, and that the sacrifices made were not in vain. I feel honoured to be here, with you, today.

    I meet today against a backdrop of momentous events right across the Middle East and North Africa. Young people – just like you – have led demonstrations, uprisings and demands for reform. They are demanding the same freedoms and rights for which Iraqi Kurdistan has already fought – and that you want for yourselves.

    This is a moment of opportunity and risk. The British Prime Minister, David Cameron, has spoken of his cautious optimism at this “precious moment of opportunity” for the entire region. And our Foreign Secretary, William Hague, has described the eruption of this democracy movement as the most important development of the early 21st century. He is right, for it has potential long-term consequences greater than either the terrorist attacks in America on 9/11 or the global financial crisis of 2008.

    You have already had your Kurdish Newroz. It is striking the extent to which I hear echoes of that in the Arab Spring. The events across the MENA have also prompted Kurdish society to look at itself. That is a healthy thing to do. The consensus seems to be that further reforms in governance and public services in Iraqi Kurdistan are needed. I am sure that is right.

    The history of my own Country means we British understand how challenging it is to build and develop political systems. But it is crucial to enable Governments to meet the aspirations of their people: the future of your country depends upon it. The most encouraging aspect for me is that this is being achieved through dialogue and debate.

    We, the United Kingdom, were with you at the birth of a democratic Iraqi Kurdistan. We remember – as your parents will do – that it didn’t happen overnight. Nor will it in other countries now starting along the same road you travelled two decades ago. We’ve been with you as the process has matured, and will continue to support you as you take Iraqi democracy forward.

    The demands across the region for open government, for action against corruption and for greater political participation are the natural aspirations of all people – and they are right to expect them to be conceded.

    There are risks. Governments should respond to such protests with reform. That is the only way that long-term stability can be achieved. A repressive response to peaceful protest is foolish and wrong: it merely reinforces the case for change.

    The Governments of Libya and Syria have violently repressed such protests. They are wrong: and they will learn that the international community will not accept such abuses of power. Nor should anyone. The Criminal Court at The Hague awaits those who murder and repress.

    Some governments have tried to use the threat of Al Qaeda as an excuse for the repression of their people. This excuse doesn’t hold true. The recent death of Osama Bin Laden has struck a powerful blow against Al Qaeda and that is welcome; but the eventual defeat of its ideology will be by the Muslim people. As the Foreign Secretary has said, “The true expression of the Muslim people want was seen in Tahrir Square in 2011, not at Ground Zero in 2001”.

    The United Kingdom supports the reform movements, but we know there are many paths to Democracy. We believe that freedom and the rule of law are the right of every citizen. We believe also that it is the best way to guarantee human progress and economic success. Modern economies will only thrive with open societies, in which economic and political progress go hand in hand.

    Let me turn to the future.

    Many of you here today are English students. You are a rare asset. Over the last 20 years there has been a dramatic fall in the level of English language teaching in Kurdistan and across Iraq. This needs to change: a lack of English will hold back Kurdistan’s participation in the global community. The grow, you must trade. To trade, you must communicate. And English is the language of commerce.

    I hope that, one day, many of you will study in the UK, where you will find a very warm welcome.

    Education is one of the most important areas to which we provide support to Iraqi Kurdistan and – to ease the way – staff in the Consulate-General in Erbil work hard to prioritise visas to successful scholars.

    [indistinct, but as follows]

    WIDER WORLD. Very exciting. To look at the future we must understand the past:

    EUROPE – after WWII, EU;

    RISE OF ASIA – 20 years ago and now;

    LATIN AMERICA – 20 years ago and now.

    What they have done – you can do.

    You will do things, say… know … be things your parents never dreamed of. Ambition. Aim high.

    With luck … ambition … study … work there is nothing you cannot achieve.