The Rt. Hon. Sir John Major KG CH

Tag: Economy

  • Mr Major’s Speech to the European Parliament – 16 December 1992

    Below is the text of Mr Major’s speech to the European Parliament in Strasbourg, made on Wednesday 16th December 1992.

    PRIME MINISTER:

    The British Presidency of the European Community

    Introduction

    The European Council at Edinburgh took place at the end of one of the most difficult periods in the Community’s history. It was Britain’s responsibility to steer the Council to a successful conclusion. With the help of our partners, we did that.

    We never expected our Presidency to be easy. Many of the challenges we faced were not unique to our Presidency. We took the chair as the Community began to come to terms with the Danish referendum on Maastricht. Serious recession was afflicting most of Europe, indeed most of the world. A stormy referendum in France was just beginning. At the end of that campaign, we experienced great volatility in the currency markets, which has continued. The need for a GATT agreement had never been greater, but the obstacles to overcome remained formidable, as the Munich Summit showed. War was raging in former Yugoslavia and instability gripped the rest of Eastern Europe.

    Against that background, we knew what our objectives were; we set these out clearly at the start of the Presidency. Even as difficulties have increased, they have not blown us off course. During the British Presidency, a series of complicated negotiations has come to a head; many of the negotiations inter-locking; all of them complex.

    As Douglas Hurd made clear to this Parliament in duly, we set ourselves a number of tasks: to complete the single market; to agree a future financing settlement; to implement subsidiarity, and to make the Community more open. Externally, we wanted to get a GATT agreement; to launch enlargement negotiations; to tackle the problems of former Yugoslavia; and to develop relations with the emerging democracies to the East.

    The Community has tackled all these priority areas. Of course, some problems remain to be solved; but we have solved the main problems confronting the Community now. The Community can go forward more confidently as a result.

    Economic Recovery

    Underlying this agenda is the need for economic recovery. At Edinburgh, we agreed on supportive action at the Community level, as part of a growth initiative to stimulate new investment and new jobs in every country in the Community.

    The most important element of this is, of course, the Community’s success in completing the single market on time – the biggest free trade project in history. Some 500 measures have been passed since the programme began in the mid-1980s, breaking down barriers to trade and enterprise across the Community. This means new opportunities for all Europe’s businessmen; and competition to make the most of those opportunities should mean lower prices and more choice for Europe’s consumers.

    At the start of Britain’s Presidency, the single market was already 90% complete. Inevitably, some of the toughest pieces of legislation were left until last. Nonetheless, political agreement has been reached on a string of key directives. After 31 December, there will still be areas where more can and will be done, for example, in transport, energy, telecommunications. But the cumulative work of the last six years, covering the Presidencies of all twelve Member States, amounts to a magnificent achievement. I pay tribute to the contribution made by the European Commission and to the cooperation with this Parliament in enabling this body of legislation to be adopted. The single market is now opening for business.

    The agreement between the Community and the United States on agricultural issues was a breakthrough in worldwide trade negotiations. Much work now needs to be done speedily in Geneva. But negotiations have resumed among all the parties to the GATT. The Commission is playing a positive and leading role. As the European Council confirmed, the Community must press for an early, successful and balanced conclusion to the Uruguay Round.

    An OECD estimate puts the benefit to world income at something like $200 billion per year. What is more, benefits will be general, not specific to manufacturing countries such as EC members in the North. Trade is worth much more than aid to boosting economic growth in developing countries.

    At Edinburgh, we added a third element to the Community’s endeavour to promote recovery and prosperity. We agreed to set up a new European Investment Fund to guarantee loans to infrastructure projects and small and medium sized businesses, and also a special loan facility at the European Investment Bank. These will be able to support a total of new investment of up to £24 billion. Taken together with other Community agreements to reduce the regulatory burdens on business, and national programmes to encourage investment and new jobs, this should give a new boost to confidence and economic recovery.

    Recovery can be helped by action at the international level but conditions must be right at the national level for international action to be effective. National action is crucial. We all agreed at Edinburgh that we must improve efficiency, reduce subsidies and enhance competition. Sound finance, low inflation and firm control of public sector wage bills help to create the conditions for reductions in interest rates. And we agreed on the need to give priority to capital spending and incentives to private investment.

    The Maastricht Treaty

    To be effective, the EC needs the right institutional framework, the right relationship with its citizens. At Edinburgh, we found a solution to the problem of Denmark and the Maastricht Treaty, enabling the Community to move forward as Twelve.

    Maastricht is the best achievable basis for the Community’s development. All twelve agreed that. It will improve the working of the Community – making the institutions more accountable; strengthening the rule of law; giving the principle of subsidiarity a legal base.

    By the end of this year, ten countries will have ratified. In Britain, the House of Commons is now looking at the Treaty in great detail. We are committed to completing our ratification before the present Session of Parliament ends next year.

    At Edinburgh, we had to tackle three Maastricht-related issues: the Danish issue; subsidiarity; and openness.

    We had a specific Danish problem and we found a solution particular to Denmark. No-one, including the Danes, wanted renegotiation of the treaty, nor a new ratification process. But Denmark required an additional, and legally binding, instrument. So we confronted a delicate conundrum. And we solved it. We agreed to a decision, binding in international law, which will enable Prime Minister Schluter to go back to the Danish people and recommend a ‘yes’ vote in a second referendum next spring. This takes up the concerns in the Danish memorandum in a way which is consistent with the Treaty. The solution is designed specifically for Denmark.

    The ratification process this year had thrown up doubts across Europe about the way the Community was developing. There seemed a general fear that the Community was in danger of becoming too remote. The Community had to become more open; decisions in the Community had to get closer to ordinary people. For the first time, the principle of subsidiarity is being formally enshrined in an EC treaty. People everywhere, it seemed, were a little baffled by a paper principle; they needed to be persuaded by practice. So, in advance of formal implementation, the Commission is showing us what that principle will mean.

    I congratulate the President of the Commission for his work. The presumption is, as the Commission document puts it, on national action, not Community action. But subsidiarity will operate without disrupting the institutional balance. The Commission has published lists of proposals which will not now take forward and of existing legislation which it wishes to see repealed. Subsidiarity will be judged by actions, not assertions. Community action here is both positive and persuasive. The European Council welcomed the Parliament’s ideas for a new Inter-Institutional Agreement. The Council are now committed to negotiate a new one with the Commission and this Parliament.

    Openness is just as important. At Birmingham, Foreign Ministers were asked to find ways of opening up the Community’s work to greater scrutiny. Now the Commission have agreed on more consultation in advance of legislation; and the Council have agreed to publish voting records and to let television cameras into some important Council discussions. This is a solid start.

    In the future, Community institutions are going to need to cooperate even more closely. At my instigation, the Edinburgh Council was the first where there was a substantive political discussion with the President of the Parliament at the beginning of our discussions, putting those discussions clearly into their wider context. Herr Klepsch made a valuable contribution. I am confident that this will set the pattern for future European Councils.

    Sites of Institutions and Size of the European Parliament

    Two decisions will be of particular interest to the European Parliament. We settled on new numbers of MEPs for Member States. The main reason for this was the need to increase German representation after unification to include the Eastern Lander. But we also had to make sure that the new arrangements made sense in the context of the future enlargement of the Community. The Council took up the Parliament’s Resolution based on the de Gucht proposal, on the composition of the Parliament from 1994. That was the basis for our final decision. That shows the institutions working together properly.

    We also reached a final settlement of the sites of the main institutions. This is of direct interest to the Parliament. We took account of views expressed here, but many interests had to be balanced. The European Parliament shall have its seat here in Strasbourg; twelve monthly plenary sessions will be held here. Additional plenary sessions will take place in Brussels, where the Committees shall be based.

    Although I know that some of you will have been disappointed by this decision, the spirit of cooperation at Edinburgh allowed us to settle an issue which has been contentious for years, and which has held up other important decisions on sites. The clarity of the Edinburgh decision will let you get on with the job of agreeing working arrangements.

    Money

    The Community also needs a financial framework which gives it the resources it needs and which the Member States can afford. At Edinburgh, we agreed the future financing of the Community to the end of the decade. This was possible because everyone saw that any settlement had to balance two requirements: the need for a confident, cohesive Community; and the need to take account of the economic realities we all face. I recognise that this Parliament called for a much higher level of own resources and spending. I recognise too that some – but by no means all – Community spending substitutes for national spending, and so does not add to total spending, and so to additional burdens on taxpayers. But the view of the Council was that the Community could not be exempt from the pressures, to which all member states are now subject, to keep such burdens down. And the importance of reducing national budget deficits, in the interests of convergence and lower interest rates, was stressed by all in the Council.

    That is the background to the Edinburgh decision to keep the present Own Resources Ceiling, the limit on Community spending, for a further two years.

    Thereafter, there will be a gradual increase. Internally, Community spending will increase by over 30 per cent between 1992 and 1999. On cohesion, total structural funds will increase by over 60 per cent by the end of 1999. The Cohesion Fund will be larger than originally proposed by the Commission. Commitments for Spain, Greece, Ireland and Portugal will double between 1992 and 1999. External actions in 1999 will reach 6.5 billion ecu compared with 3.5 billion ecu in 1992, helping to meet real needs in countries as different as Russia and Somalia.

    This final outcome, gives us the sound financial foundation we need. We are committed to cooperating closely with the Parliament and to agreeing a new Inter-Institutional Agreement. I hope we shall also reach a settlement this week on the 1993 budget.

    Relations with the Rest of Europe

    At the end of the British Presidency, I believe the Community can look forward, plan confidently. I hope it will also look outward.

    In the last couple of years we have at times risked becoming too introspective, though in the last six months we have held a constructive EC/Turkey Association Council, a good EC/ASEAN meeting in Manila, and a summit meeting with the leaders of the Visegrad countries. Tomorrow, with President Delors, I fly to North America for the EC/US and EC/Canada Summits. All that is as it should be. But in Edinburgh we set a new external agenda in two important respects.

    First, the way is now open for enlargement. We agreed that it was in the Community’s interests to get negotiations under way as soon as possible. They will start in the New Year with the Austrians, Swedes and Finns. The technical preparations have been laid by the Council. Negotiations will also start before long with the Norwegians.

    A second priority for 1993 is the East. Russia and Eastern Europe are Western Europe’s biggest challenges for the 1990s. The Commission have put forward an important paper on the relationship between the Community and the countries of Eastern Europe. This paper, formally welcomed in the Edinburgh Conclusions, calls for early trade liberalisation and full membership of the Community for those countries with Association Agreements as soon as they are ready for it.

    We are also working to develop relations with the Former Soviet Union. We are in the middle of negotiations for Partnership Agreements with Russia, Belarus, Ukraine and Kazakhstan.

    It might seem from what I have said so far that the Edinburgh Council was the only event of the Presidency. Although many subjects came to a head at the Council, the result rested on work undertaken earlier. Throughout the last six months, we have laid particular stress on the Community’s external relations. With the long internal agenda it would perhaps have been pardonable if the EC had neglected the outside world. But that has been far from the reality.

    In one external area there has been precious little good news: Yugoslavia. The Community has jointly led with the United Nations a determined international effort. In August we called the International Conference on the Former Yugoslavia in London. The EC’s representative, Lord Owen, is co-chairing a meeting of the Conference’s Steering Committee at Ministerial level in Geneva today.

    The former Yugoslav Republic of Macedonia could be the tinderbox to ignite a wider Balkans conflagration. At Edinburgh, the European Council agreed to unblock Community and international assistance to Macedonia which will help stabilise the country. The Commission will allocate 50 million ecu of humanitarian and technical assistance. Other Member States will also provide a matching amount from their own resources. In addition, we unreservedly backed the United Nations plan to put a battalion of soldiers in the Republic to monitor the peace there.

    The Community and its Member States have led the international humanitarian effort. Despite this activity, this determination, the situation in Bosnia shows no improvement. We are all appalled by the systematic detention and rape of Moslem women in Bosnia. The European Council demanded that all detention camps close immediately, that secure access be given to humanitarian organisations.

    It is appalling that, as most of Europe comes closer together, burying old feuds in new cooperation, the Community should see on its doorstep a reversion to a savagery that has no place in the world of today or tomorrow. Those who behave in this way cannot expect any relationship with us, for our Community is built on a system of values to which our common commitment is firm, as firm as our faith in freedom itself.

    Conclusion

    Let me in conclusion add a more positive message. I know that earlier this year many of you in this Parliament were uneasy, as I was, that the Community seemed in danger of faltering. I firmly believe that Edinburgh has changed all that. Edinburgh leaves the Community pointing in the right direction. We have declared the single market open. We have – confirmed our commitment to Maastricht. The solution we have found for Denmark paves the way for a referendum there in the Spring. We have begun the process of bringing the Community closer to its citizens. We have taken a major initiative for economic recovery. We have settled some long-running internal problems. And we have provided the firm budgetary foundation the Community needed.

    So the Community can now lift its sights. That is what our people, and the rest of Europe, expect of us. We can now get on with the crucial business of finalising the Uruguay Round, which the world economy so desperately needs; and with healing the division across the heart of our continent. The end of the Cold War broke down barriers, but the wound was so deep, had festered for so long, that the healing cannot come quickly or automatically. It is up to us to build bridges, spreading prosperity, encouraging hope. It is up to the Community to give a lead.

    Before Edinburgh, the question being asked was “Can the Community give a lead?” The answer at Edinburgh was “Yes” it can. And with your help, it surely will.

  • PMQT – 24 November 1992

    Below is the text of Prime Minister’s Question Time from 24th November 1992. Tony Newton deputised for John Major.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Amess : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton) : I have been asked to reply.

    My right hon. Friend the Prime Minister is attending a lunch– [Interruption.] given by the Lord Mayor and the Corporation of the City of London to celebrate the 40th anniversary of the accession to the throne of Her Majesty the Queen– [Interruption.] I understand that the Leader of the Opposition is also there.

    Mr. Amess : Basildon now being regarded as the barometer for national and international opinion, is my right hon. Friend aware that there is a most favourable reading following the excellent autumn statement and the outcome of the settlement of the GATT round? Will my right hon. Friend take the opportunity to appeal to politicians of all parties to talk up this wonderful country of ours rather than so treacherously talking it down, safe in the knowledge that he bats for Braintree as I bat for Basildon?

    Mr. Newton : I agree that, throughout the county that my hon. Friend and I have in common, the measures announced by my right hon. Friend the Chancellor and the achievement of my right hon. Friend the Prime Minister in relation to GATT have received a great welcome. I am tempted to extend my hon. Friend’s alliteration by saying that my right hon. Friend the Prime Minister is batting for Britain, but in fact he is batting for the whole world economic community and it is time he was given credit for his success.

    Mrs. Beckett : Is the Lord President aware that while the Prime Minister, desperate to have something to show for a lacklustre British presidency, has been scurrying around Europe talking up the prospects of a European growth package, in Brussels today the Chancellor has been steadily talking it down? Which of them speaks for the Government?

    Mr. Newton : My right hon. Friend the Chancellor has been doing no such thing. ECOFIN, in which he participated, had a very important discussion yesterday directed to the growing concern about the recession in the Community and considered how, individually and collectively, the countries of the Community could work to improve the prospects of recovery on lines very similar to those adopted for this country in the autumn statement.

    Mrs. Beckett : But are not the chaos and confusion arising because, even though 1,000 British jobs have been lost in every day of the United Kingdom presidency, the growth package, instead of being at the top of the presidency agenda where it should have been, is a half-hearted afterthought?

    Mr. Newton : If there is any chaos and confusion, it is with Her Majesty’s Opposition, who fought the election campaign on a programme which they have since acknowledged would have made the recession significantly worse, and who continue to advance measures- -a minimum wage, a payroll tax, the social charter–which would end all prospects of recovery.

    Mr. Bates : Will my right hon. Friend join me in congratulating the employees of Nissan UK, who have achieved the European car of the year award for the British-built Micra? Does he also agree that that further demonstrates a transformation of the British car industry from one renowned for poor quality and militancy under a Labour Government to one renowned for high quality and high achievement, of which we can all be proud, under this Government?

    Mr. Newton : Yes, indeed, and it is an achievement that I view with particular pleasure in view of the connection that I had with the economic problems in and around Sunderland some years ago. It is a major achievement for the new industries that we have brought to that area that Nissan has won the award for its car. It will form part of an achievement to which I look forward–that of this country becoming a net exporter of cars for the first time in many years.

     

    Q2. Mr. Raynsford : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    Mr. Newton : I have been asked to reply.

    I refer the hon. Member to the answer that I gave some moments ago.

    Mr. Raynsford : Is the Minister aware of the report published yesterday by the Engineering Employers Federation, which highlights the urgent need for a strategy to regenerate Britain’s industrial and manufacturing base, and its conclusion that the Department of Trade and Industry lacks both the competence and the commitment to achieve that? If the President of the Board of Trade is not going to intervene before breakfast, before lunch and before tea, will the Leader of the House urge the Prime Minister to do so when he gets back from lunch?

    Mr. Newton : I have just referred to the achievements of an important part of British manufacturing industry, which is significantly more successful than it has been for many years and certainly more than it was under the administration of Opposition Members. If I ask anyone to read anything, I shall invite them to read the hon. Gentleman’s recent article, in this month’s Fabian Review about the Opposition, entitled, “Sleepwalking Into Oblivion?”

    Dr. Liam Fox : Does my right hon. Friend welcome reports that the Germans will, after all, play a full role in the European fighter aircraft project, with all the implications that that has for British jobs? Does not that and the GATT round negotiations imply a triumph for the Prime Minister’s quiet style of international diplomacy?

    Mr. Newton : I believe that it does and, referring back to a previous question, it shows the efforts made by my right hon. Friends the Prime Minister and the President of the Board of Trade and my right hon. and learned Friend the Secretary of State for Defence to advance the interests of British manufacturing industry.

     

    Q3. Mr. Winnick : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    Mr. Newton : I have been asked to reply.

    I refer the hon. Member to the answer that I gave some moments ago.

    Mr. Winnick : Does the Leader of the House accept that it shows no lack of respect to the Queen to suggest that the full cost of restoring Windsor castle should not fall entirely on public funds? Will that be considered by the Cabinet, and can the Leader of the House tell us whether the Cabinet have ruled out entirely the possibility of the Queen paying at least some income tax on her vast investment income?

    Mr. Newton : On the latter part of the question, I have nothing to add to the reply given by my right hon. Friend the Chancellor of the Exchequer to the hon. Member for Coventry, South-East (Mr. Cunningham) on 3 November. On the first part of the question, the position is well known. The fabric of Windsor castle is state property and has long been recognised as such. All that my right hon. Friend the Heritage Secretary said yesterday was in acknowledgement of that simple fact.

     

    Q4. Mr. Riddick : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    Mr. Newton : I have been asked to reply.

    I refer my hon. Friend to the answer that I gave some moments ago.

    Mr. Riddick : Does my right hon. Friend agree that the measures contained in the autumn statement to help industry, along with the recent reductions in interest rates, are beginning to provide that vital ingredient–confidence–among industrialists? Does he share my pleasure at the somewhat unexpected support for the autumn statement last Thursday evening–either out of incompetence, which seems likely, or out of conviction, which seems less likely–from Her Majesty’s loyal Opposition?

    Mr. Newton : I share my hon. Friend’s view of the autumn statement’s reception–not least its emphasis on capital programmes and the measures directed towards the housing market, to the release of local authority receipts, to capital allowances and to export credits. There is a long list of comments from people in British industry supporting those measures. I am bound to wonder whether the occupants of the Opposition Front Bench could produce a list of any length in support of what they have put forward.

     

    Sheffield

    Q5. Mr. Michie : To ask the Prime Minister when he next plans to visit Sheffield.

    Mr. Newton : I have been asked to reply.

    My right hon. Friend the Prime Minister is making plans for a series of visits to all parts of the country– [Interruption.] Wait for it! He hopes to include Sheffield among them.

    Mr. Michie : I am sure that we can cope with that threat. Indeed, we look forward to the right hon. Gentleman’s visit. Is the Leader of the House aware that we hope that, during that visit, the Prime Minister will go around Sheffield’s housing stock in the public sector, which is in need of repair, rebuilding and refurbishment? Is the right hon. Gentleman further aware that it is to be hoped that, during that visit, the Prime Minister will display the same generosity in the provision of money to pay for repairing those houses as he has displayed towards Windsor castle, bearing in mind the fact that the tenants of those houses actually pay rent and taxes and that everyone’s home is their castle?

    Mr. Newton : I have already commented on the indirect thrust of the hon. Gentleman’s question. With regard to help for Sheffield, the Government provided £26 million of assistance for projects associated with the student games.

     

    Engagements

    Q6. Mr. David Evans : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    Mr. Newton : I have been asked to reply.

    I refer my hon. Friend to the answer that I gave some moments ago.

    Mr. Evans : Will my right hon. Friend send a message to the Prime Minister saying that we on the Conservative Benches have total loyalty to Her Majesty the Queen– [Intervention.] and her Prime Minister?

    When will the Asylum Bill become law? Is my right hon. Friend aware that 28 people were arrested for having 70 false identity cards? We know that the lot opposite could not care less whether the number was 700, 7,000 or 70,000–“Let them all in,” they say–but the British people and I want to know when the Bill will be on the statute book.

    Mr. Newton : The answer to the first part of my hon. Friend’s supplementary question is that I shall take the greatest possible pleasure in communicating to my right hon. Friend the Prime Minister my hon. Friend’s great declaration of loyalty and the support that it drew, I judged, from both sides of the House.

    The answer to the second part is that while I cannot give my hon. Friend an exact date, his question contained a message that I can also communicate to the Home Secretary, to urge him on in his efforts, and perhaps a message for Her Majesty’s Opposition in terms of the importance that is attached to the passage of that measure.

    Ms. Corston : Why has the Prime Minister, as President of the European Community, put Tory party unity before the needs of the EC in such a way that it has caused the French Trade Minister to describe the British presidency as the “most calamitous” that he had ever seen?

    Mr. Newton : It is clear that, as a result of his presidency of the European Community in the past few months, my right hon. Friend has played a crucial part in achieving the GATT settlement that is now in prospect.

     

    Q7. Sir Anthony Durant : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    Mr. Newton : I have been asked to reply.

    I refer my hon. Friend to the reply that I gave some moments ago.

    Sir Anthony Durant : Does my right hon. Friend agree that my right hon. Friend the Prime Minister deserves our support and congratulations for what he has done on the GATT round and that that has been an important achievement for most of the world, including the underdeveloped territories? Does he further agree that it would be wrong for a small group of French farmers to hold up that vital agreement?

    Mr. Newton : My hon. Friend makes an important point. In congratulating my right hon. Friend the Prime Minister, perhaps we should also recognise the contribution made by Mr. Andriessen, Mr. MacSharry from the Community, Mrs. Hills– [Interruption.] It is right that we should recognise that the part played by my right hon. Friend has contributed to the efforts of others in an important way, including those whom I mentioned and Mr. Madigan from the United States. We have ensured that that negotiation now has a chance to reach a conclusion. I share the hope that my hon. Friend has expressed that it will not be frustrated by people in whose overall interests that agreement is.

     

    Q8. Mr. Michael : To ask the Prime Minister if he will list his official engagements for Tuesday 24 November.

    Mr. Newton : I have been asked to reply.

    I refer the hon. Member to the answer that I gave some moments ago.

    Mr. Michael : Is the Lord President aware that the reply given to me yesterday shows that the level of aid to Somalia was less than during the years of bloody dictatorship under Siad Barre ? Will he undertake that the Government will at least restore total aid to the level of 1987 and meet Britain’s historical responsibility to the people of Somaliland in the north?

    Mr. Newton : I understand that the principal problem in Somalia is not the shortage of funds but the difficulty in distributing the aid that we are keen to provide. As the hon. Gentleman well knows, the aid budget for next year was effectively projected in the autumn statement.

  • Mr Major’s Speech to the Lord Mayor’s Banquet – 16 November 1992

    Below is the text of Mr Major’s speech in London to the Lord Mayor’s Banquet, held on 16 November 1992.

    PRIME MINISTER:

    My Lord Mayor, My late Lord Mayor, Your Grace, Your Excellencies, My Lords, Aldermen, Sheriffs, Ladies and Gentlemen.

    May I begin by thanking you for the toast this evening and congratulating you on your election. Let me give you a message of good cheer. I hope the six months after your election are less eventful than the six months after mine. And may I say, on behalf of all of us here, how glad we are to see the Lady Mayoress at your side tonight, and how much we admire her courage after her recent accident.

    It is a time-honoured tradition to speak to this audience about foreign affairs. I can imagine how much you are looking forward to a detailed exposition of Title 6, Article KI, Clause 2, Line 3 of the Maastricht Treaty.

    But tonight I would like to break with tradition. I will talk about the international situation for a while, but primarily I intend to talk about confidence. About recovery. About the future of our country. About how to generate growth and bring lasting jobs and prosperity.

    It is fitting to do so here – surrounded by so many who have a leading role in commerce, in industry, in the media, in the professions. All have a vital part to play in building up our confidence in our country and our future.

    It is only three years ago that Western leaders spoke with euphoria of a “New World Order”. They looked forward to a new age of prosperous, stable democracies.

    The Cold War has gone. The Soviet Empire has gone. The Berlin Wall has gone. But so have their simple certainties. The collapse of the Communist system has left a vacuum and it will take time for freedom and the market to fill it. Throughout history, such circumstances have been fertile breeding ground for extremism and unrest. We must work to ensure the late twentieth century is an exception. But the genie is out of the bottle, and that narrow line between patriotism and nationalism is in danger of being overstepped in many countries.

    So there is great hope – but greater uncertainty. And we are living through a fundamental reappraisal of how the West should respond in difficult economic circumstances.

    Britain is in a unique position to influence that response. As a permanent member of the Security Council, as a member of NATO, the CSCE, the Commonwealth and the European Community, we are at the centre of the overlapping groups of nations which seek to order the world’s affairs. Our role as a leading power in Europe has brought added value to our relationship with the United States.

    And let me pay tribute here to President George Bush. There are many dangers in today’s world. But the world is safer today than when George Bush first took office four years ago, and much of that is due to his leadership and his values. As we congratulate President-elect Clinton, let us not forget our old friend George Bush, and say to him: you have been a true friend to our country and you will always be an honoured guest here.

    As we look at our overseas responsibilities we know we have a special responsibility for Hong Kong. There is no one better than Chris Patten to lead Hong Kong through to 1997 with energy, skill and wisdom. I hope the Chinese Government will look at his proposals for Hong Kong, not with suspicion, for which there is no cause, but in the spirit that we and he intend. “One country, two systems”, was what Deng Xiaoping promised. Our proposals are entirely consistent with that philosophy. They do not threaten China. They do benefit Hong Kong. And we want a happy, prosperous and confident Hong Kong to be our enduring legacy to China after 1997.

    There are few greater human tragedies than in Yugoslavia. Over recent months Britain has led the international community in a search for a peaceful settlement and in efforts to bring humanitarian relief to those in need. We have sent trucks, mechanics, winter shelter, medicines, food and clothing. And our RAF pilots have led the repeated air lifts into Sarajevo with great courage and tenacity for many months. In August we mobilised the world community on behalf of peace in Yugoslavia. We have sent British troops – the Cheshire Regiment – to help deliver humanitarian aid in difficult and dangerous circumstances. We owe that help to the innocent victims of the conflict. We owe it also to ourselves, for if the conflict spreads it could spread far beyond the borders of the former Yugoslavia itself.

    It is a moot point whether the Yugoslav war would have begun if the Soviet Empire had not collapsed. But it is in our long-term interests that a new democratic Russia emerges confident and free. Last week President Yeltsin visited London and agreed a Treaty of Friendship and five other agreements. It was the first such Treaty between our countries since George III and Catherine the Great.

    President Yeltsin sees clearly that Russia’s future can only lie in democracy and a free market. There are powerful forces ranged against him. No one alive in Russia today knows first-hand what a modern market economy is. The Russian people are being asked to make enormous short-term sacrifices for the longer term gain.

    The route mapped out for them by Boris Yeltsin is a hard one, but it is the only one. The alternative would be to turn the clock back to the grisly apparatus of repression. Back to the old structures which once supported the Soviet State and have now gone, and – hopefully – gone for good. I hope that for their own sake as well as for ours, the Russian people will follow the lead that President Yeltsin has set them. It will not be easy. We cannot bear their sacrifice for them. But we can help them. Support them. Encourage them. And so we shall. Because we have the chance in our generation to fashion a new Europe from West to East. One where inter-locking trade interests enable future generations to live in greater security than we have known before. There is no greater prize than that.

    Of course the Russians and others are struggling to reform against a uniquely difficult background of world recession. In America – as in Britain – consumers and businessmen have been battling to reduce their burden of debt, built up in the boom years of the late 1980s and impeding recovery today.

    In Japan, growth is stalling. In Germany, people are facing what Chancellor Kohl recently called the “hour of truth”. In Italy, the Government has had to take drastic measures to restrain the growth in public debt. In France, unemployment exceeds 3 million and yet their real interest rates are nearly twice as high as ours.

    There is evidence of an instinct that is dangerously strong in times of economic difficulty: to look inwards, put up the shutters and slam the door on the free trade that has brought prosperity to the post-war world.

    My Lord Mayor, you referred to the GATT round. I agree with you. It is vital we get an early and comprehensive settlement. It is not tolerable for the world to fail to agree. We cannot let a handful of oil seeds or a sack of grain get in the way of the boost such a settlement would give to the world economy. At a conservative estimate, it would add nearly 200 billion dollars to world output. Two hundred billion dollars of prosperity, income and jobs.

    Nor is an agreement merely an economic necessity. It is a moral imperative. Because it is not only the businessmen of Europe and America who stand to gain from the successful completion of the Uruguay round. Developing countries in the third world, aspiring market economies in eastern Europe: both need the opportunity to sell, so they can earn their way to the prosperity we tell them will follow from economic reform.

    We, too, stand to gain enormously from a successful outcome. The stakes are high. Of all the successive rounds of negotiations to liberalise world trade that have lubricated post-war economic growth, this is the most ambitious. It needed to be, because trade today takes new forms, susceptible to new and less visible barriers. Of course, the old battle against tariffs is not over. British manufacturers still face some swingeing imposts, not least in the United States, where a successful Uruguay round will open up new opportunities to our textile, chemical and ceramic industries.

    As the City well knows, British financial services meet more subtle but no less damaging national restrictions. Our “intellectual property” – books, cassettes, discs, software – is still counterfeited in many countries. Our foreign investments are hampered by some countries’ dog-in-the-manger restrictions on the repatriation of profits. All these trade barriers and abuses are being tackled in the Uruguay round that now hangs in the balance.

    What is true for Britain is true for Europe. The European Commission has suggested that the Community could quadruple its exports of services with an agreement. European industries have much to gain from success. That is why, during our Presidency of the Community, I have put Britain’s weight behind the effort to secure agreement; supported the Commission’s negotiators; constantly warned our partners of the danger of delay. We have lost no opportunity of pressing for a settlement.

    But, even as President of the Community, Britain is now able to conduct the negotiations. That is the duty of the Commission. Responsibility for trade matters cannot be escaped or buried behind newer preoccupations. Brussels must not fail in this fundamental duty. Britain will give every support to a settlement. Nothing would break the clouds of world recession more surely than the boost to confidence of a successful Uruguay round.

    The GATT settlement is a vital complement to the opportunity opening before Britain in the single European market. 1993 will see the culmination of a European effort in which Britain has taken the leading part. It is a clear example of the cold, hard common sense and commercial self-interest that lies behind our decision to be part of Europe.

    Well over half of all our trade is with the European Community. Inward investment flows here to take advantage of British skills and a flexible British labour market – and Britain’s opportunity to sell into the biggest free trade area in the world. We have the lion’s share of inward investment into the Community; but we get it because we are in the Community.

    The single market in Europe is an opportunity for which Britain is uniquely well placed. We have now put in place the policies and the measures. We must now ensure Britain takes full advantage to advance the recovery we all want to see. As more and more people – businessmen, consumers, house-buyers, investors – start to look forward with more confidence to what the future offers, that will itself provide the engine for recovery.

    Our economic policy objective has always been the same: sustainable non-inflationary growth.

    The essential precondition – lower inflation – is now clearly in place. When I became Chancellor three years ago inflation was rising towards 11 per cent and many feared it would rise still further. Interest rates were 15 per cent and seemed stuck there. How easy it is now to forget the perils of that position. That was why we joined the ERM. For two years that policy succeeded beyond all expectations: inflation fell to under 4 per cent, and interest rates fell from 15 per cent to 10 per cent.

    Our commitment to maintain low inflation remains as strong as ever. Inflation ravages peoples’ savings. And if people cannot be confident even in the value of money, how can they be confident about their economic future? But we now face a world where the inflationary pressures are weak. And that has given us the opportunity to loosen monetary policy and create a more competitive environment for business and industry.

    Since we left the ERM, we have reduced interest rates by a further 3 per cent. Down to 7 per cent, the lowest in the European Community. Down by 8 per cent over the last two years. Down to the lowest level for nearly 15 years.

    This should provide a huge boost to industry. The cut last week will take a further £1 billion off industry’s interest costs – provided it is passed on to borrowers, to small businesses as well as large, as I trust it will be. This brings the total saving to industry to over £10 billion a year. And low interest rates also provide additional spending power for consumers: £145 a month off repayments on an average mortgage.

    In addition, we now have an exchange rate that is fiercely competitive. Not just in export markets but here at home too. And the Government is determined that that competitive advantage should not be frittered away by higher inflation.

    It was against this background that Norman Lamont presented his Autumn Statement last Thursday. And what he set out to do was to demonstrate how the Government’s commitment to industry is right at the heart of our policies. To demonstrate that not just by words, but by decisions. Decisions to give priority to industry in the Government’s spending plans and in our tax policies.

    Support for industry is not – indeed could not be – our only priority. I believe that people right across the country share my view that the poorest and neediest members of society must be protected. So we honoured all our commitments to uprate pensions and other benefits, in spite of the heavy financial cost.

    But this does mean we have to look for some sacrifice by those in work. We cannot turn our back on our responsibilities to those who are not. That is why we have decided to restrict pay settlements in the public sector to a maximum of 1.5 per cent next year. I know that is tough for some. I do not like doing it but I believe it is necessary. I am asking for sacrifices by those in work to help get others back into work. And I believe there is an instinct for fairness in the British character that will understand that and accept it.

    Ministers and MPs should make their contribution too. There will be no increase at all in Ministers’ pay next year and we shall introduce a Resolution in the Commons to provide for no increase in Members’ pay either.

    Salaries in the private sector are for the private sector to determine. But it would be wrong of me not to use this gathering tonight to say very frankly that costs must be controlled everywhere, not just on the shop floor but in the boardroom too. We have set a lead in the public sector. I hope we will see that mirrored throughout the private sector.

    In his Autumn Statement, the Chancellor announced a wide range of measures to help business. We listened to what industry was saying. Industry can only succeed if it is able to adapt to changing circumstances. And Government must be ready to do so too.

    So, for example, Norman Lamont announced huge changes to the rules on private finance for capital projects, giving new encouragement to joint ventures between the public and the private sector. Joint ventures that should help to bring forward infrastructure projects in Scotland, in the Midlands, in the South East, in London, and indeed right across the United Kingdom. Lord Mayor, I welcome your theme of “the City and industry in partnership”. But we should go further: my theme is “the City, industry and the Government in partnership”.

    It was essential that, in settling public expenditure, the Government did not spend more than could be afforded. Industry would not have thanked us for that, if the result had been higher taxes. So it was vital to stick to the remit set down by Cabinet in July. The Autumn Statement did just that.

    It required some tough decisions. But we had to give priority to capital spending and to the needs of industry. So we have provided for the Jubilee Line extension to go ahead, and for British Rail to invest £1 billion next year. We have protected the roads programme – and lower tender prices should permit nearly twice as many new roads projects to be started next year. And there will be record capital spending in the health service.

    Norman Lamont also announced extra help for the housing market and the construction industry. £750 million to buy up empty properties that are overhanging the housing market. And a relaxation of the rules on local authorities’ receipts, to stimulate an extra £1.75 billion of capital spending.

    He also increased ECGD cover for exporters by £700 million, to ensure that they really can take advantage of the competitive opportunities now open to them.

    On the tax side, he announced an increase in first year allowances for investment by industry. And the complete abolition of the car tax. These are measures that industry had been seeking. Measures that will help generate confidence and underpin the economy.

    Lord Mayor, we need to build up our manufacturing base to meet the demands of today’s markets. I do not regard manufacturing industry as a marginal add-on optional extra – it is fundamental to our future prosperity. That does not mean supporting industries whose markets have been irretrievably lost – lost because developing countries now manufacture for themselves what they once imported from us.

    What it does mean is to provide the sort of environment that encourages modern, well-equipped British industry to compete with the best in the world. Our supply side reforms continue to transform industrial relations and strip away many of the inefficiencies that had dogged British industry. We now have an industry that can compete with the best – and beat it.

    My Lord Mayor, I do not have too many prejudices. But let me share with you one that I do have. I am sick and tired of hearing people talk down our country and play down our achievements.

    Modesty may be an attractive quality. But as a nation we carry it too far. Too often we slip from healthy self-deprecation into an unhealthy, self-denigration. I know of no country more tolerant, more free, more open. Too often the Britain I read about is not the Britain I see when I travel around the country. Too often the views and opinions I hear quoted are not the views and opinions I hear direct from the lips of ordinary Britons.

    So let us have confidence in our skills, our design, our ingenuity and – yes, our achievements.

    – With low inflation;

    – With the lowest interest rates in the European Community;

    – With a very competitive exchange rate;

    – With the Single Market on our doorstep;

    – With a GATT deal tantalisingly close,

    There is a great opportunity for British business.

    The Government has listened to what industry has been saying. It has introduced the policies and the measures that industry has been seeking. So let us capitalise on our assets. Throughout this country there is a deep sense of national pride. An overwhelming desire to pull together and work together. We have done it often enough before in our history. Now, in order to recreate confidence and lift us back into growth and recovery we must do it again, in a true partnership for prosperity.

  • Mr Major’s Speech to the Cambridge Chief Executives Forum – 13 November 1992

    Below is the text of Mr Major’s speech made to the Cambridge Chief Executives Forum on Friday 13th November 1992. Several phrases in the speech were inaudible.

    PRIME MINISTER:

    I’d just like to talk about some things that I think are relevant to our situation at the moment, what has happened, what is happening, and what is going to happen in the future. It’s a private occasion, so I will [indistinct] one or two matters in public, and I know that you will respect that. Let me just talk about some of the background. I think it is important to see what the background is to where we are. Two things that happened over the past two or three years. Undoubtedly good news everybody said. In one respect they were. But they had a very material effect in an economic area entirely unsuspected. The first of those two great events was the collapse of the Soviet Empire. We wanted it for a long time. The second of those two great events was the collapse of the Berlin Wall, something all of us found offensive, and were pleased to see the back of.

    There was a great surge of optimism, and understandably so, for who could possibly have defended either the Soviet Empire or the maintenance of the Berlin Wall. But what has been the practical effect of those two? Take the collapse of the old Soviet Union first. The obvious illustration is simply this. Would Yugoslavia be in flames today if there still had been the Soviet Union? And the answer is no. And so one sees that with every great and worthwhile event – and I’m not seeking to reconstruct the Soviet Empire – but I do point out that for every action there is a reaction, and one of the reactions of course is what has happened to Yugoslavia. It is a bitter, nasty, savage war. It is in danger potentially of spreading down to Kosovo, bringing in the Albanians, the Greeks and others. And it is immensely dangerous. And it is for that reason that we’ve sent some British troops there to help with the delivery of humanitarian aid, and we’ve spent a great deal of money – far more than I think most people realise – it must be well over a hundred million in the present financial year – in terms of easing the particular problems that exist in Yugoslavia. And yet despite that, this winter, despite the enormous amount of UN aid, the UN High Commissioner for Refugees, the British troops that are out there, the money we’ve spent, the aid we’ve sent, the risks the RAF pilots have taken to get into Sarajevo Airport, and they got in, I’m bound to tell you, when nobody else could or would – repeatedly day after day. Despite all that, at least a hundred thousand, and possibly a quarter of a million noncombatants in Yugoslavia this winter, men, women and children, will die. Through hunger, through lack of medicine, through cold, as a result of that particular problem. And it has destabilised an important part of the world on the very outskirts of the European Community of which we are a member.

    And then there is the collapse of the Berlin Wall. We all cheered, we all watched the television pictures, we all knew it was a historical inevitability which had to happen. But the impact of it happening has been very profound, for Europe and for business. Of course, there were two colossal political and economic discussions that I believe were made by the German Government after the collapse of the Berlin Wall. The first was the one to one swap Deutschmark for Ostmark in terms of introducing a new financial system into the new East German Lander. And the second was the belief in Germany that that great all-powerful West German private sector economy will rush into East Germany, invest, build it up, and the problems there would be solved. But East Germany is an environmental sink. And West Germany withdrew from it, and it said we don’t know what the costs are. We don’t know what the reward is. We do know that we can do far better in investing in Czechoslovakia a little way down the road than we actually can in the East German Lander. And so the investment wasn’t there. And because the investment wasn’t there the East Germans began to show signs of wanting to move to West Germany very rapidly where they would have been not welcome, and where there would have been new social problems had they done so. And so the West German Government poured massive sums of West German public sector investment subsidy into East Germany. And the practical effect of that has been German interest rates a good deal higher than they otherwise would be, Germany monetary supply getting out of control, Germany heading into inflation, and German growth in the coming year down to 1%, and still on the downward trend. And there you have one of the three great motives of the world economy.

    The United States in near recession for three years. The Japanese economy in a very sickly state by its own powerful motives in the past. Huge fiscal stimulus in Japan – they’re still not going to meet their targets. Their economy is still going down. Their industrial production in Japan has fallen five times as fast as it has in the United Kingdom or Western countries over the last few years. And there are riots occasionally in Japan because of the state of their economy. So the three great engines of the world economy, the United States, Japan and Germany, all sickly, or declining, and in the case of Germany the ramifications of German interest rate policy as the benchmark of the ERM led to that extraordinary fallacious decision of the French to hold a referendum on Europe brought about that combination of events that gave us Black Wednesday and the rest of Europe a great deal of difficulty. So, springing out of two entirely unconnected events, we see a more uncertain, difficult world, political, security and economic situation than anybody might reasonably have imagined.

    Now where are we in the United Kingdom? Let me just set out an objective that we have. An objective that I have always had. The objective I set on the first day I became Chancellor, way back in the dark ages. You may think it’s only three years! If you’d had my job [laughter] What was it, though, that objective? A fairly straightforward objective, I would have thought, sustainable, non-inflationary growth. There are two ways to get it, and how you get there depends where you start. And once you appreciate that point, you begin to see the necessity for some of the changes of policy that our less educated friends in the press would call U-turns. I’ll explain to them why they’re not U-turns, but they are a straight path to the objective one demands. Sustainable, non-inflationary growth.

    Where did I start on the day I became Chancellor of the Exchequer? With 15% interest rates, 11% inflation and rising. That was where I started at that stage. It was the constant concern of business and commerce that we were heading for hyper-inflation, and that interest rates seemed to be stuck. It was never going to be easy to get them down, and despite the fact we’d been toppled out of the Exchange Rate Mechanism without it, we would not have got them down in the way we have. But we now have a different set of circumstances. We now have inflation at 3.5%. The headline rate of inflation stayed the same, and the figures announced today were 3.6%. A more important underlying rate of inflation fell yet again to 3.8, reducing prices [indistinct] input of inflation is around about 2.5%, on some measures even less. And interest rates down 1.5%, and we now have by courtesy of events rather than management, the most competitive exchange rate. [Indistinct]. But we find ourselves in a different set of circumstances. But given that we now approach the centre of the maze, non-inflationary growth from a different position, we are in a position to operate different policies. Because we are heading on a different route. And it was for that reason, and for one other which I will come to, that I announced about a month ago in some television interviews which seemed to surprise some people that we were looking for a structure and policy for recovery and for growth. Why it should have surprised people – who on earth would have thought I would be looking for a policy [laughter] I have never myself quite understood. But there we are. Such are the ways of the world, that it seemed to be a surprise. For two reasons.

    Firstly, because I now think there is a lot of disinflation out there in the system. It is possible to move more rapidly to a more relaxed monetary policy and to recreate the conditions for investment. But secondly, for this reason. When I looked beyond the United Kingdom economy and the Germany, French, Italian economies, I looked at the economies in the United States and Japan. When I looked at what was happening in the Soviet Union, and its impact on Eastern Europe, 1,500% inflation in Russia, 2,500% inflation in Ukraine, one begins to see a set of economic circumstances coming together that potentially, in the absence of two things I will come to, could have toppled Western Europe through that narrow dividing line between recession and slump, and for that reason I think it was right, though the balance of this lay in that direction, to begin to look for recovery for growth and for stimulating the economy in a different way for the problems we face.

    There are two things the world needs – not just this country. The first, if I may take the lesser matter first, is the completion of the Single Market in the European Community at the Edinburgh Summit. We will have that. We have made great progress in the British Presidency, and we will complete the Single Market, I am sure, at the Edinburgh Summit in a few weeks time. The second is an altogether bigger problem, and more dangerous. And that is the necessity to reach a rapid conclusion to the Uruguay Round and to get a GATT settlement throughout the world. It is not tolerable for the world not have a GATT settlement, whatever the difficulties may be for any individual country or any individual Government. It is not tolerable. And. I would say to you without a single blush on my cheek that I have spent more time in the last month in seeking to get a GATT agreement than I have dealing with the occasional problems we [indistinct] [laughter] now I trust behind us. And the difficulties of the domestic economy.

    Without that GATT Agreement there is a risk of a retaliatory trade war between the United States and Western Europe. And there is only one way in which that can go. That will mean a move from recession to slump in Europe and in America, and it is folly that almost defies belief that that could be brought about for the sake of a handful of oil seeds and a barrel of grain, and it must not be allowed to happen. For that reason I enjoyed the [indistinct] with President Delors [indistinct] [laughter]. I am very pleased indeed that the European Community have now decided that they will re-engage in the negotiations with the Americans, and Mr. McSharry has been disinterred [indistinct] and brought back into the negotiating frame, and he will be off to the United States with Andriesson on Monday. And I hope that he, Mr. Andriesson and Mr. Madigan and Mrs. Carla Hills, [indistinct] that they will come back and settle.

    Once Europe and the United States have settled, the scene then moves on to Geneva. We have other problems there. Relatively small problems, bananas from the ACP countries, is it? A tricky little problem. It’s actually a tricky problem for those countries and for us, and a very serious one. But they are problems that will not hold up the GATT Round. And there’s not one single thing in the world that will do more to stimulate world trade and growth and confidence and prosperity and earnings and profits than a GATT Round. And for those countries who seek to hold it up, for one domestic reason or another, whilst with their other hand they pour out aid to the Third World, I am bound to say to them, the whole of official aid from the whole of Western Europe to the Third World is but a drop in the ocean compared with the importance to the Third World of opening up the industrial markets of the West to their products. And it is a moral matter, as well as a political and economic matter, that we get that GATT Agreement and the opening of those markets.

    So those are some of the things that are important. Let me turn to the measures the Chancellor announced yesterday. What actually lay behind them. I think there is a certain amount any Government can do to stimulate the right economic [indistinct] I don’t kid myself for a second that the Government can do it all, for we can’t. The people who produce this country’s growth and prosperity and jobs are the people like you who run businesses, predominantly medium-sized businesses, from one end of this country to the other. Our job as Government is limited to trying to produce the right economic [indistinct] and trying to produce the right psychological atmosphere or confidence which has been so sadly lacking over the last few months.

    We have passed through, are passing through the first ever south-east based white collar recession that we have ever known. It is a recession that encompasses the homes of the opinion formers. Very easy for the great denizens of Fleet Street not to worry about the recession closing a steel works up in Scunthorpe. But it’s actually putting out of work the man with the Mercedes who lives next door. It comes a lot closer to home. And it engenders a different atmosphere among the opinion formers. And – I don’t know if any of you remember Itma – it’s being as gloomy as keeps you going – an expression, if given the choice, I would pin from one end of Fleet Street to the other. For surely it is the way in which they have conducted their writing on economic matters over the last few months, and getting [indistinct] out in a quite damaging way, it does make it more difficult to [indistinct] interest rates, it does make it more difficult to encourage growth, and that psychological belief that we are actually in a position to be confident, to be successful, to grow, is vitally important.

    I have very few prejudices, though those few I have are increasing in number. But one prejudice I assuredly do have. I am sick and tired of the British habit of writing down our country, its prospects, what it is, what it stands for, what it can do. You don’t see that in other countries. They instinctively beat their chest in favour of their country, whereas the dear old British laconically lay back and say well, yes, we don’t do that very well. You can’t expect us to deliver on time. It’s not the way we treat it. And all this nonsense. But the reality is it is nonsense. And it’s damaging nonsense. And it is actually time that we started standing up and saying this is a brutal and competitive world, and we have got to stand up for ourselves. By we I mean the politicians, business, opinion formers, the media, actually stand up for Britain and say we can do things better than other countries, and you just watch what we’re going to do. Because that is the way in this increasingly competitive world that we’re really going to make our mark. The measures that Norman Lamont introduced yesterday were very sharp, three-quarters of a billion [indistinct] empty properties to lift that overhang by the housing market, help to re-stimulate the housing market, improve the balance sheets of many people in doing so.

    The change in the first few allowances in manufacturing industry. I must admit to you a heresy that I hold and have long held, held in the Treasury when I was overruled – more difficult to overrule me today [laughter]. I do not myself believe manufacturing industry is an add-on extra, and our policy is going to reflect that in a way it hasn’t in the past, and if that is a culture shock to a theologian or two in Great George Street, it is a culture shock he or she will have to live with [laughter]. And then I think beyond that the reduction in car tax to help the engineering industry was self-evident and a straight forward point. The addition of an extra £700 million of export credits to markets, if we’re going to take advantage of the export opportunities that actually exist. That is there. There is a risk with an export credit guarantee, a taxpayer [indistinct] risk, but I think in present circumstances it is acceptable. And the idea of releasing the future accumulated receipts of local authorities is two-fold. Firstly, to encourage them to sell the land and buildings and homes they no longer need, and secondly, giving them the opportunity to utilise that money to construct new properties, construction industry, and to deal with renovations and repairs in their existing properties, for that is peculiarly intensive in labour terms.

    So those are some of the measures that Chancellor mentioned. There are two others to which I would turn very briefly, for I think the impact of them has not yet. When I first went to the Treasury I was confronted by something called the Brierley rules. The Brierley rules were a set of rules developed by a great and good mandarin, Sir William Brierley, to set as many road blocks as it possibly could to any relationship between the public sector and the private sector on infrastructure subjects. And it was a very important piece of Treasury theology that there was that dividing line, and if you go across it these rules made jolly sure that [indistinct]. And I had the privilege of meeting Sir William Brierley just after he retired. And I asked him about these rules, and I said, “what d’you think of them?”, “absolute rubbish, he said”! What we have now done is go a long way further. It is actually to set out a series of circumstances in which the public sector and the private sector can combine to produce the right sort of infrastructure.

    I do mean things like the Channel Link, the Birmingham road, new developments like the [indistinct] Dartmouth crossing, like underground railway, large-scale infrastructure projects in partnership with Government and the private sector. A concept we haven’t seen before. Areas of the public sector leasing rather than buying to enable the right sort of capital development to proceed without being artificially delayed by public expenditure considerations in the short term. It is pragmatic, it is difficult, but I think it is highly practical. And not only do I think it is highly practical, I think it is very much in our own commercial and industrial interests to develop the sort of infrastructure that will make sure our British economy is as efficient as any economy anywhere.

    So there is a great change. It will take a while to come about, the East-West, the whole series of other projects that otherwise might not take place probably will take place now over the next few years as a result of this important change. And there’s one other that will have a mixed blessing. Some will dislike this next point very much, but I see great advantage. And that is that we are producing a Green Paper to look at the capacity for tolling roads, taking decisions like that, in order to improve the physical infrastructure. Why not let the private sector build roads, and toll them, and take that expenditure wholly out of the public sector and improve our infrastructure at the same time. It happens in France, Italy, it happens right the way across Europe. It doesn’t happen here. Take that money over 15 years out of the public sector figures, and you have extra resources to help elsewhere, to research and development and science, with education, the health service, and people will actually have a better physical infrastructure as well. So we are producing a Green Paper, another huge change of political theology. It has not yet been fastened upon by the opinion formers and others, and the Green Paper will come out in the course of the next few months.

    These are not short term measures. These are not measures to get us over Christmas, or over the next week or over the latest scandal that undoubtedly will erupt somewhere around the world. These are matters addressed to the medium and the far distance. With one single shining objective in the middle of them. To make sure that we have the right structure for British business, British industry, and British commerce, to maximise its opportunities, its profits, its prosperity, its growth, and its employment creating new jobs. Many years ago the old CBI had a slogan. I thought it was the best slogan the CBI ever had, and I myself am sorry that they didn’t stick with it from the 1970s when they thought of it till today, Britain Needs Business was their slogan. Gloriously ambiguous. But it is true. Britain is a [indistinct]. We are a trading nation. We always have been. We never had our eyes fixed down at our bootstraps. Our eyes, our prosperity, have been fixed on markets overseas, on innovations, on developments, on research and development, on new ideas. More Nobel Prize winners for science and industrial matters in this country per head of population than any nation in the world including the Japanese who always get the credit. Because Britain does need business. Our prosperity does, our future does. Unless we are able to recreate that entrepreneurial spirit we had in the ’80s, and it slipped away from us, at the end of the ’80s in the excessive boom that was created and inevitably followed by the recession as people who had over-borrowed got trapped into high interest rates as the Government tried to force down the inflationary [indistinct].

    So it is a great change. People will accuse us of a U-turn in policy. I don’t [indistinct]. It is a policy going the direction I have always wanted. It is upon that British, industrial, commercial, and, yes, manufacturing base that our future depends. And you may expect the direction in which Norman Lamont went yesterday to be the direction in which the Government will move in the future. And I for one believe two things. [end is indistinct].

  • PMQT – 12 November 1992

    Below is the text of Prime Minister’s Question Time from 12th November 1992.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Garrett : To ask the Prime Minister if he will list his official engagements for Thursday 12 November.

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

    Mr. Garrett : Today’s unemployment figures confirm that Britain is in the longest recession since the 1930s and is still heading for the deepest recession since the 1930s. How would the Prime Minister describe his stewardship of the economy, when to most people it has been incompetent and callous?

    The Prime Minister : I think that the hon. Gentleman has been in the House long enough to know the difficulties that are faced not only here but elsewhere across Europe and beyond Europe. What the hon. Gentleman characteristically forgot to mention is that, this morning, notwithstanding the fact that every single figure in the unemployment increase is a personal tragedy, that increase is smaller than the average monthly increase has been for some considerable time. I hope that that will prove to be a welcome trend. My right hon. Friend the Chancellor of the Exchequer will set out some measures later on today of which I think the hon. Gentleman may approve.

     

    Q2. Mr. Devlin : To ask the Prime Minister if he will list his official engagements for Thursday 12 November.

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

    Mr. Devlin : Is my right hon. Friend aware that, since his recent chat with Mr. Delors, it was reported in yesterday’s American press that the French Government are hinting that a compromise on GATT may now be only just around the corner? I do not know what my right hon. Friend said to Mr. Delors when he popped into Downing street recently, but, for the sake of all those manufacturing industries in the north of England, will he keep on saying it please?

    The Prime Minister : I shall certainly keep pressing the case for an early conclusion to the GATT round. I certainly welcome the assurance that the President of the Commission gave me last Friday about an early resumption of talks with the United States. I am delighted that that has subsequently been endorsed by the full Commission and equally pleased that Mr. MacSharry will be rejoining the talks. We will certainly continue to press for a very early conclusion. I believe that the Commission hopes to regroup on 20 November. It would be very agreeable if it were able to report a success with the United States so that the matter could then go to Geneva for final settlement.

    Mr. John Smith : Will the Prime Minister tell us when he first knew that the Government guidelines on the export of arms-related machinery to Iraq were being breached?

    The Prime Minister : Let me try, for the sake of the right hon. and learned Gentleman and a number of other hon. Members of the House, to disentangle the true issues from some of the misunderstandings and wilder allegations of recent days. Let me make the first and fundamental point that the issues raised by the Matrix Churchill case have been referred to an independent judicial tribunal. All the papers that the inquiry seeks will be available to it. All Ministers and officials who are asked to give evidence to that inquiry will be required to do so and the inquiry will be free to publish whatever material it wishes.

    The second point relevant to the whole House, I think, is that every relevant aspect of the conduct of all Ministers will be open to scrutiny by the inquiry and I thoroughly welcome that. I will, if I may, clear a third point and that is that Ministers, in claiming public interest immunity, were doing what they were obliged to do by law. They signed such documents only as advised by counsel and the Attorney-General. It follows that they were not concealing information from the court. On the contrary, they were making available the relevant documents to the court. It was then for the judge to decide which of the documents should be protected by public interest immunity and which should not. I hope that that will clarify matters.

    Mr. John Smith : Instead of answering a clear and direct question, the Prime Minister has issued a prepared statement. I remind him that this question goes right to the heart of the credibility of his Government. I ask him it again. When did he first know that the guidelines on arms- related exports to Iraq were being breached ; what date, please?

    The Prime Minister : It is not clear at all that they were breached. The first allegations that they might have been breached were made by The Sunday Times in late 1990. Following that article, I, together with the Cabinet Secretary, had a meeting with Mr. Alan Clark. At that meeting he told me that it was totally false to suggest that he was advising the companies concerned on how to prepare licence applications in such a way as to conceal military use. Mr. Clark took the same position in the written witness statement which he provided to the court. It was not until his testimony in the case, therefore, that I had any reason to believe that what he had told me and what was in the written witness statement might not correspond with his oral evidence.

    Mr. John Smith : Does the Prime Minister understand that if he thinks that the guidelines were not breached, he must be about the only person in this country who has arrived at that conclusion? Will the Prime Minister tell us whether, when he gave replies, in particular a reply to the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel) on the Liberal Benches on a previous occasion about exports to Iran being conducted in the light of the guidelines, that was the whole truth as he knew it at that time?

    The Prime Minister : Every parliamentary answer that I have given or letter that I have dispatched has been based on the position as I understood it to be. I am utterly confident that that will be clear in Lord Justice Scott’s inquiry.

    Mr. Duncan-Smith : Does my right hon. Friend agree with me that it is quite appalling for right hon. and hon. Gentlemen to go on the media and accuse my right hon. Friends of dishonourable conduct before– [Interruption.]

    Madam Speaker : Order. The hon. Gentleman will resume his seat unless he questions correctly. The Prime Minister has responsibility only for Government activities. Will the hon. Gentleman frame his question correctly or not?

    Mr. Duncan-Smith : Yes, indeed, Madam Speaker. Does my right hon. Friend agree with me that all that he has said so far this week indicates that there will be a complete inquiry and that all will be revealed, honourable conduct included?

    The Prime Minister : The House has that complete assurance. Indeed, if I had wished there not to be a complete inquiry and hon. Members to be open to questions, I might have followed the proposal of the right hon. and learned Member for Monklands, East (Mr. Smith) and had an inquiry under the Tribunals of Inquiry (Evidence) Act 1921, which would have made the matter sub judice in the House.

    Mr. Ashdown : Is it not the case that the Prime Minister and the Government knew as early as July–that is, six months before the Prime Minister’s letter to me–that the machine tools being exported to Iraq by Matrix Churchill and other companies were beyond peradventure being used to make munitions for the Iraqi army?

    The Prime Minister : I have replied to the right hon. Gentleman’s letter and the many media appearances that he has made. As he will see when he receives my letter, his second letter shows that he has completely misunderstood the position. [Interruption.] The right hon. Gentleman asked a question ; he might have the courtesy to listen to the answer. The right hon. Gentleman referred to my letter of 6 December and wrongly claimed that I misled him by concealing knowledge of the Matrix Churchill case when I explained the Government’s policy on export licences for Iraq. That is not the case. If the right hon. Gentleman reads my letter, he will see that I refer in the second paragraph to an investigation by Her Majesty’s Customs and Excise which was into Matrix Churchill. I made it clear that I could not comment in case I prejudiced any proceedings. That is the rational explanation for which the right hon. Gentleman asked. He failed to understand my correspondence.

    Mr. Anthony Coombs : Is my right hon. Friend aware that the latest figures, for October, for manufactured car exports show an increase of no less than 37 per cent. on last year? Is he also aware that the Textile Alliance anticipates that the exports of the textile industry from the United Kingdom, at £4.8 billion, will be a record for this year? Does he agree that a newly competitive exchange rate will give British exporters the opportunity to improve even on that excellent performance?

    The Prime Minister : Yes. That is certainly the case, and there is no doubt that car production rose very dramatically in September, and the figures for October, which were released today, suggest that production is holding up. I have no doubt that our present competitive exchange rate will improve that position.

     

    Q3. Mr. Cryer : To ask the Prime Minister if he will list his official engagements for Thursday 12 November.

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

    Mr. Cryer : Instead of passing the buck continually to a vague and unsatisfactory inquiry, will the Prime Minister clean out the cesspit of the present Government by sacking all those Ministers who conspired to pervert the course of justice in the Matrix Churchill case in order to cover up a Government policy of encouraging the sale to Iraq of machinery which they knew was to be used for the manufacture of munitions and nuclear weapons? Or would that involve sacking himself?

    The Prime Minister : The hon. Gentleman is one of the foremost conspiracy theorists in the House and an acknowledged expert at muckraking. But not even he can call an independent judicial inquiry anything other than an impartial, clear-cut and independent inquiry. That is what we have ordered and that is what we shall have.

    Mr. Tredinnick : Does my right hon. Friend agree that it is a great scandal that some local authorities are obstructing schools that want to become grant-maintained? Will he join me in welcoming the statement by the Secretary of State for Education that the law will be changed to make that obstruction impossible? Does he agree that most of that obstruction has come from Labour-controlled local authorities?

    The Prime Minister : I think that that is a matter of fact and not conjecture. I very much welcome the action taken by my right hon. Friend in the Education Bill to ensure that parents have a proper choice. It is intolerable that some local education authorities should deliberately scare parents by claiming, entirely falsely, that by voting for grant-maintained status, they will damage their children’s education. It is equally unacceptable that LEAs, as teachers’ employers, should put pressure on staff to resist the ballots of parents.

     

    Q4. Mrs. Mahon : To ask the Prime Minister if he will list his official engagements for Thursday 12 November.

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

    Mrs. Mahon : Does the Prime Minister intend to retain the nurses’ pay review body? If so, does he agree that, if that body is to have any relevance to the pay that nurses actually receive, the Government must accept its recommendations and fund them?

    The Prime Minister : The hon. Lady will be able to hear my right hon. Friend’s statement very shortly.

    Mrs. Peacock : Is my right hon. Friend aware that a private sector proposal to work the Markham Main colliery has been with British Coal for almost three weeks without any acknowledgement? Does he agree that that may suggest that British Coal does not want competition?

    The Prime Minister : I shall pass my hon. Friend’s remarks to the President of the Board of Trade. I have no knowledge of that particular proposal, but I have no doubt that it will be brought to British Coal’s notice very speedily.

     

    Q5. Mr. Don Foster : To ask the Prime Minister if he will list his official engagements for Thursday 12 November.

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

    Mr. Foster : Does the Prime Minister agree with those Conservative councillors in Bath who this week supported a motion expressing dismay at the deterioration of the national health service in Bath? Or does he support the comments of the Secretary of State who, on a recent visit, said of the closure of wards at the district hospital, of the loss of beds for the elderly mentally infirm and of the increased waiting lists for elective surgery that she thought they were “mere teething problems”?

    The Prime Minister : I think that the hon. Gentleman is just a little selective. He makes no mention of the fact that health service expenditure is up by more than 50 per cent. in real terms since 1979 or that, for every pound spent in 1979, nearly £4.50 will be spent this year. Neither did he mention the fact that the national health service will spend nearly £2,500 a year for every family of four in this country. No other Government would have provided those resources.

    Mr. Ottaway : Is my right hon. Friend aware that Sunday trading at Tesco superstore in Purley has resulted in an increased turnover, more jobs and a surplus of staff who want to work on a Sunday, and it is very popular with my constituents? Will he introduce legislation that clarifies that area of the law before an unacceptable compromise is introduced to the House in January?

    The Prime Minister : As my hon. Friend knows, we have a manifesto commitment to bring forward proposals for reform once the European Court of Justice has settled the compatibility of the current law with the free trade provisions of the treaty of Rome. We expect that judgment in the Court in November and my right hon. and learned Friend the Home Secretary will then make an announcement to the House about legislation.

  • Mr Major’s Speech to the Scottish CBI – 10 September 1992

    Below is the text of Mr Major’s speech to the Scottish CBI at the Forte Crest Hotel in Glasgow on Thursday 10th September 1992.

    ALISTAIR MCCALLUM:

    Prime Minister, President, My Lords, Ladies and Gentlemen, welcome to CBI Scotland’s Annual Dinner. I hope you’ll have a very happy evening. The Grace will be said by Dr. William Morris. The Rev. Dr. William Morris.

    THE REV. DR. WILLIAM MORRIS:

    Let us pray.

    Oh, Lord, since these good things are of Thy giving

    Help us to use them all for wiser living

    Each use restraint, reduce inflation

    To be a slimmer, fitter nation

    And not be sunk in deep depression

    When waist and hairlines face recession

    Oh, Lord Thou dost with steady interest wait

    Which of Thy family will devaluate?

    Lord, guide us in our problems from on high

    And, for this evening, bless the CBI

    Amen.

    THE PRIME MINISTER:

    Alistair, thank you very much for your kind words, and perhaps first I can offer my thanks to you and your colleagues in the CBI for your hospitality here this evening. I knew when I arrived a couple of hours ago that this evening was going to be a special evening [Laughter] and so, for one reason or another it has so far proved. I was piped in, I was offered what I was told, in that lovely bowl, was a half glass of whisky. If that was half a glass of whisky, I’m half a Dutchman. [Laughter].

    Then we had what I can only call a rather novel Grace from Dr. Morris …., [Applause]. It’s always good to see the Church join the State in a little battle against inflation [Laughter] so the CBI has lost none of its originality, and none of its hospitality, and then when Alistair and I stood up for the Loyal Toast a few moments ago, you may or may not have noticed, but a part of this platform nearly collapsed. I felt rather like the Nationalists on Election night [Laughter] but let me turn from the ridiculous to the relevant.

    I want, if I may, Chairman, to speak tonight about the economy of our Country, the whole of our Country, every part of it, its role in Europe, and its future prospects, and they’re big subjects all of them, but what I want to seek to do this evening is to put them into proper perspective because far too often comment on the economy is partial, and is narrowly focused. It takes no account of the wider domestic and international scheme. It’s a snapshot, not a portrait; a detail, not a landscape. It’s too often darkly lit because too many always think it’s fashionable to be gloomy about our future. They forget what we’ve achieved so they underrate what we can do.

    Chairman, it’s only two years ago that business was demanding two things from the Government, and, as Chancellor at that time, I remember the insistence of business, and I remember well what they were seeking from the Government. Business wanted a stable pound, and it wanted lower inflation, and it wanted this, I think, for good reasons. Inflation robs people of their savings.

    It impoverishes those on fixed incomes. It wrecks profits and investment. If Britain has higher inflation than our competitors we lose competitiveness and we lose jobs. Inflation loads the scales against us, and business wanted stable exchange rates because it wanted certainty. It wanted a climate in which it could plan for the long term. I believe that business was right to demand low inflation, and stable exchange rates. They are the essential preconditions for sustained economic success.

    Two years ago, before we joined the Exchange Rate Mechanism, inflation was over 10% and seemed to be rising. We forget too readily the alarm that that caused. Now inflation is 3.7% and falling, and we overlook too readily the opportunities that that offers. We saw such figures before. We saw them briefly in the mid-1980’s but they didn’t last. This time I am determined that that regime of low inflation will last [Applause] and as it does so wages are moderating as well. There has been a crucial change in the inflationary climate in industry. Growth in underlying earnings is down to 6%, the lowest that we’ve seen for a quarter of a century.

    We forget also that, two years ago, exchange rates against our European trading partners, where 60% of our trade now goes, exchange rates against our European trading partners were uncertain and volatile. Now they’re kept within a 6% band in the Exchange Rate Mechanism, and, in due course, will move to the two and a quarter per cent band. Sterling still fluctuates, of course, against the dollar and other currencies, as we’ve seen all too vividly in recent weeks, but it does now have a fresh and certain stability against the currencies of our main trading partners.

    Chairman, as the fear of inflation and exchange rate instability has diminished, so the cry of many of the Government’s critics has changed. Now, we have the inevitable chorus of quack doctors peddling their remedies. There is, I think, a difficulty with these remedies. As we’ve learned from experience, miracle cures simply don’t work, never have, and never will. We need to face our problems squarely. It’s too easy to regard Britain’s problems as unique, or to blame them on the Exchange Rate Mechanism. Neither point is true. The problem of slow growth, a difficult problem, one we face at present, the problem of slow growth is not peculiar to Britain. It is, at the moment, a worldwide problem. We’ve seen the same chain of events in the United States, in Canada, in Australia, in New Zealand, and elsewhere, and in all those Countries, not just in the UK, in all those Countries businesses and individuals took on too much debt in the late part of the 1980’s. Asset prices, especially property, rose sharply on the back of that, and general inflation began to accelerate. Eventually, of course, as interest rates rose and debt burdens became intolerable, people’s top priority was to reduce their debts, and, as a result, businesses stopped expanding, and consumers stopped spending. Some of those Countries have lower interest rates than Britain, but as the United States has illustrated in recent months, the problems of adjustment are just as difficult.

    Equally, I dare say any businessman returning from Continental Europe will have become only too well aware of economic difficulties faced there – weakening activity, low confidence, and rising unemployment, so the process of adjustment has been painful everywhere, but it is necessary, and it is not something that Governments can simply wish away. Improvement rests critically on the decisions which individual businessmen and consumers have to make about how they adjust their own finances.

    I will tell you what my conviction is. My conviction is that adjustment is best managed within the framework and the discipline provided by our membership of the Exchange Rate Mechanism. That discipline ensures that we keep in line with our major competitors in Europe. One thing is certain. If we have inflation around 4%, and our principal competitors have inflation around 2%, then we will lose markets, competitiveness, jobs, and prosperity. It would, at this moment, be madness to let our competitors steal the edge on inflation. I am absolutely clear that for us to compete effectively in Europe, we would need our present policies, whether or not Britain was a member of the Exchange Rate Mechanism, and as we have seen in Scandinavia this week, it is a cold world outside the Mechanism for many Countries that one day wish to join it.

    I was pleased to note, Chairman, that the CBI, in your August Economic Situation Report, firmly endorsed the view that our exchange rate against European currencies, is an exchange rate at which industry can compete successfully, and Howard Davies repeated this very clearly when he addressed the TUC this week. I am sure that that is the right view. As the Chancellor has made crystal clear, there is going to be no devaluation, no realignment, and the export performance of many British, and notably many Scottish companies, provides convincing evidence of our current competitiveness.

    I know that things are not easy, even in Scotland – even in Scotland, which has outperformed so much of the United Kingdom in recent years, and sometimes I think we perhaps overlook, pass along and miss the remarkable changes that have come about in many parts of the United Kingdom, not least in Scotland. Anyone coming back, as I’ve done today, to Glasgow, and remembering the Glasgow of 15 years ago, would not recognise the same City, so great have the changes been [Applause] and then for the first time since records began, Scottish unemployment is below the average for the United Kingdom as a whole. Too high, I know, and I wish to see it lower, but when last was it ever below UK average? Never before. It is now as a result of the changing prospects in Scotland, and the enterprise of the businessmen in this room, and their predecessors in recent years in Scotland, so let me take this opportunity tonight to pay tribute to the response that industry has already made, and continues to make, in adjusting to the new disciplines of the Exchange Rate Mechanism. Costs have been brought under control. Exports are at record levels, and so is manufacturing productivity. Those are real achievements, and quite apart from being genuine achievements, they are the surest possible foundation for the future. Of course, there are problems caused by the weakness of the dollar, a dollar that has fallen by over 20% against the Deutschmark, and if that weakness were to persist, it would have damaging consequences, not least the distortion of international trade and investment.

    Let me say this to you, Chairman, for it is something that I believe passionately – all my adult life I’ve seen British Governments driven off their virtuous pursuit of low inflation, by market problems or political pressures. I was under no illusions when I took Britain into the Exchange Rate Mechanism. I said at the time, that membership was no soft option. The soft option, the devaluer’s option, the inflationary option, in my judgment that would be a betrayal of our future at this moment, and I tell you categorically that is not the Government’s policy. [Applause].

    All too often at difficult times in the past the solution was the same. Let the exchange rate go, and every time, sooner or later the result was the same – rising import prices, rising wages, rising inflation, and a long term deterioration in Britain’s competitiveness which offset any short term gain that there had been. Look for example, at the formal devaluation of 1967. The pound devalued by 14%. Did that lead to a sustained improvement in the UK’s competitiveness? It did not. A brief flurry only. Retail price inflation doubled over the following year, and any improvement in competitiveness swiftly ended. No greater competitiveness, and doubled inflation. What sort of target is that for British industry?

    Since the late ‘60’s the pound’s external value has halved. There were some who saw that as a way to steal a competitive advantage. They were wrong. Maynard Keynes, whom I have to tell you I don’t often quote – Maynard Keynes was right when he said, and I quote “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency”.

    There is a question, a question we might usefully ask ourselves – let me ask it, Chairman. Why is the Deutschmark so preeminent in the currency markets of Europe? It’s not because of current German economic performance. It is because the Deutschmark has an anti-inflation record, and maintains its value. Those who want freedom from the influence of the Deutschmark should realise that they can best get it from matching the Deutschmark’s anti- inflation record, and that is what we are determined to do in this Country. [Applause].

    We shouldn’t expect the road to permanently low inflation to be quick or to be easy, and we still have some way to go. Our inflation is above that of France and Germany, our most important competitors. Well over half our exports go to Countries with lower inflation than ourselves, so we must bite the anti-inflation bullet, or accept that we will be forever second rate in Europe. I refuse to accept such a future for this Country. We face difficulties, I know, but we have the prospect of non-inflationary growth, sustained non-inflationary growth in our grasp, and I am not prepared to let it go. There should be no doubt in anyone’s mind, the Government will stick to its policies, low inflation, free markets at home and abroad, low taxes, and firm controls on public spending. Those policies are good for business, and good for Britain, and they are our policies.

    Let me turn to something else that I believe is good for Britain, and good for business, and that is the Government’s European policy. In December, the Heads of Governments of the 12 will meet at Holyrood House in Edinburgh, the high point of the British Presidency. I’m delighted that so important an occasion will take place in Scotland, and I hope the famous, or perhaps in Glasgow I should say, the infamous Edinburgh climate will be benign.

    Earlier this week I spoke at some length about the Maastricht Treaty. Tonight, I would add only this. Britain stayed firm at Maastricht, firm in its determination to resist the encroachment of European regulations into the workplace. We rejected completely the Social Chapter, and we did so because our ambition is to free industry to compete on its own terms in the widest possible market for its products. Free trade is the route to growth. Free trade is the way out of recession, and to our Presidency of the European Community falls the task of completing two great efforts to liberalise international trade, the single market of the European Community, and the Uruguay round of negotiations under the General Agreement on Tariffs and Trade. When completed, the single market will be the biggest free trade area in the world – 340 million customers. A vast opportunity right there on Britain’s doorstep, right there on Scotland’s doorstep, and to us, the British Presidency, comes the responsibility for bringing it about, so we will be working hard for liberalisation, liberalisation in areas like transport and energy, removing barriers wherever they remain, seeking a level playing field for British business, making sure that the single market becomes a reality and not a slogan, and as we do so, we’ll be working at something else no less important, working at the ambitious task of completing the GATT round, and here agreement depends, not just on 12 Nations, but on over 100 Nations from every part of the globe. Nevertheless, progress is critical to the recovery of the world economy. It’s important to Britain. There are still far too many Countries, even rich, developed Countries, which maintain high tariffs against our manufactured goods. We need the new opportunities a GATT settlement could bring to our service industries, and a growth in world trade that a GATT settlement would bring about is a growth that the world in its current economic situation cannot afford to turn aside. The sooner we have that GATT agreement, the better it will be for every Nation in the world. [Applause].

    So, it’s not only our self interest that’s at stake. A GATT agreement already, in my judgment, long overdue is vital to the developing world, it’s essential to the survival of a world trading system that’s far too vulnerable to national protectionism. It is, that GATT agreement, one of the engines to restore growth. Negotiation of this in Europe, is a matter for the Commission, but we, the British Presidency, will press them, help them, cajole them, until that settlement is reached, but that is only part of our European agenda.

    We’ve already agreed far-reaching plans to reform the Common Agricultural Policy. We’ve agreed to liberalise air fares, to prepare membership negotiations for the EFTA countries, to put subsidiarity, that principle of minimal interference in national matters, and turn it from a slogan into a reality in practice. We have resisted extravagant plans for increasing the Community’s budget. All these bear tribute to Britain’s influence, an influence, I tell you frankly, that would not have been possible if we had sat carping on the sidelines rather than moving our Country into the very heart of the European Community …..[Applause] and only by that policy, by placing us where we can best maximise our influence, only by that policy can we maximise our influence and our control over decisions that affect our Continent and people. There is no other way, and to those who say, sometimes directly, sometimes subliminally, to those who say, “Withdraw from Europe”, “Pretend it doesn’t exist”, I say to them ,”Where have you been, Rip Van Winkle, that you ignore the largest market for our goods and a principal source of our future prosperity?”. I have not a shred of doubt that if we are to build the prosperity for this Nation that we need, then we need that British influence in the heart of the Community to build the sort of Europe, and the sort of Community that we wish to see: free, open, liberal with trade, and respecting the national identities and cultures of each of its member States. That is the ambition we have for the Community, and that is what we shall press for in our Presidency, and long beyond it. [Applause]

    Chairman, I want to conclude by looking at a different Union, a special Union, that very special partnership between Scotland and England. We should never express the value of that Union in purely economic terms. By the start of the 18th Century we had already shared a Monarch for a hundred years. Since your Stuart King, James VI, went South to succeed Queen Elizabeth, the last of the Welsh Tudors, that Royal bond, that military strategy formed good reasons for a closer Union, but it was the economic opportunities that persuaded many Scots of a necessity of Union with England in 1707, and that economic Union has prospered, and today Scotland can justly claim to have one of the most modern and diverse economies in Western Europe, and since 1707 Scotland and England, with Wales and Northern Ireland, have carried out a remarkably successful joint enterprise. It is the Union, with Scotland’s distinctive contribution, which has made all of this possible. It is since the Union, and because of the Union, that Scottish values, Scottish traditions, the Scottish Church, are to be found around the whole world.

    I believe the result of the General Election showed that there remains in Scotland, a strong desire to keep Britain united. [Applause]. I believe that when Ian Lang and I made that a central plank of our General Election campaign, we reached out above the normal issues of inflation, and mortgages, and education, and health, and touched something that is a very basic instinct for people in every part of these united Islands of ours and I don’t believe it was an accident that while all the other Parties suffered reverses in Scotland, the Conservatives defied the polls and the pundits, and won both seats and increased our share of the vote, but that is in the past. We must look to the future, and now we must uphold, develop, and strengthen that remarkable magical Union that has lasted for so long, and that in essence, Chairman, is what taking stock is all about.

    Ian Lang and Peter Fraser have already met a wide range of groups and individuals, each of whom has a special interest in and particular perspective on the role of Scotland within the United Kingdom. Their door will remain open to anyone with a genuine commitment to the integrity of the Union, and with ideas for making it work better. When I come to Scotland, or when I see Scots South of the Border, I will always be receptive to proposals designed to strengthen Scotland’s place in the United Kingdom, and it is as part of that continuing process of taking stock that I have invited a number of leading Scots from a variety of walks of life, to come and meet me in Edinburgh tomorrow so that we can exchange and generate ideas. I know that what they say will be immensely valuable. I’m looking forward to what I hope will be a wide ranging and productive discussion, and I want to hear myself, personally, from Scots, how they believe we can build up and strengthen that Union. These are matters of immense importance, not just to Scotland, but I think to every part of the United Kingdom. Sometimes I think the debate in Scotland has not focused on a wide enough canvas. It isn’t just a question of keeping Scotland in the United Kingdom. It is not just a question of that. It is a question of the contribution and the importance of Scotland to every single part of the United Kingdom. We would not have the United Kingdom without the support and the strength of each of its component parts. It is that capacity of each of the parts of the United Kingdom to come together with common aims, common purposes, common beliefs, but retaining the distinctive cultures of the English, the Welsh, the Irish, and the Scots, that makes this such a remarkable United Kingdom. We propose to strengthen it and build it.

    Chairman, in the few moments I’ve had this evening, I’ve taken the opportunity to touch on a number of important subjects – inflation, our position In the European Community, our future, and the constitutional links of such vital importance between the component parts of the United Kingdom. I’ve spoken about our policies, our strategy for the United Kingdom, but that strategy is something we can only make together – make together in partnership between Government and industry, Scotland and England, Britain in Europe, Britain and Europe. Those are the partnerships that matter. Those are the partnerships that will build, for this generation and the next, a higher quality of life, a higher standard of living, a more secure present and future than ever we have known at any stage in the past. Those are the ambitions we have. They are ambitions, I believe, that are shared, not just in the instincts of Government Ministers, but in the instincts of businessmen, business women, individuals up and down every portion of our land. Together we can make sure that those instincts can build a better future for all of us.

    Chairman, you are our host, and I have both the privilege and the pleasure of thanking you not only for an excellent dinner, but for a great occasion, and the very great privilege also of inviting everyone to join me in proposing a toast to our hosts this evening.

    The toast – the CBI, Scotland. [Toast]

    The CBI Scotland. [Applause].

  • Mr Major’s Speech in London – 20 July 1992

    Below is the text of Mr Major’s speech, made in London on Monday 20th July 1992.

    PRIME MINISTER:

    I am afraid I have one piece of news for you that you will not have been expecting, we will be playing cricket against our European Community partners and I have some confidence about the outcome.

    Let me say firstly how pleased I am to be here today to present those awards, I know how important they are, I know how hard they are to earn, I know what a remarkable tribute they are to those who actually receive them, and so it is a very special pleasure to be here today to have the opportunity of presenting them.

    I know for some businesses at the moment it is a difficult time, there have been difficult months and for some those difficult months continue. But I think that, if anything, makes it even more important to beat the drum for free enterprise. Free enterprise is the only way in which this country is going to have the strength, the importance, the economic and political authority that I wish it to have, and that point might as well be understood at the low point of an economic cycle as well as the high point of an economic cycle. For at the moment we need that enterprise more than ever.

    But I think the point is really wider than that. We will always need free enterprise, the risk-takers, the go-getters, the people with energy to beat down barriers, create profits, create wealth, create jobs, and I believe that no-one knows that or understands it better than Aims of Industry and I do congratulate you on celebrating your 50th anniversary of fighting for free enterprise.

    I had a Mr Cube childhood, I grew up with that remarkable advertisement for free enterprise, it is I believe a natural part of our heritage and I think you can be very proud indeed at what Mr Cube stood for and what Mr Cube achieved.

    And I think when one looks at free enterprise, considers what it stands for and what it means, no-one illustrates the merits of free enterprise better than the three award winners today whom I congratulate very warmly on their achievements and on their success.

    We talk of free enterprise, it is worth pausing for a moment to ask what it means, what does it imply, what does enterprise need to be free from? Two things, I believe, essentially. First it needs, and you touched upon this in your remarks a few moments ago, it needs to be free of unnecessary government intervention. We are continuing to cut red tape and remove barriers to enterprise, but I share your view, there is still much more to be done and I will return to that in a few moments. But business does need to be free to take macro-economic business decisions about products, costs, markets, investment, and only the private entrepreneur can take those decisions in the interests of their own companies. But second, and in some ways perhaps rather more important, it needs to be free of unpredictable macro-economic cycles. We have broken free in recent years of our corporatist past, not just the corporatism of government picking winners or second guessing the businessmen, we have broken free of the idea that if only government would sit down over beer and sandwiches with the captains of industry and unions to agree a macro-economic strategy, all would be well.

    Well it was not when we did that and it would not be if we tried it again. The old idea that with a bit of tweaking of the money supply here, a little fine tuning of interest rates there, a little bit of spending somewhere else, everything will come out all right and then if all else fails, a massive devaluation to bail us out of our mistakes and to solve our problems.

    Well I must say to you bluntly, it never did and it never will and it is not the way to run an economy. I do not mean in saying that to imply that government and industry have nothing to discuss, of course they do, a great deal to discuss, but it is extremely important to have that informal dialogue and constructive partnership between government and industry on a wide range of issues. And the announcement of a re-shaped Department of Trade and Industry is specifically intended to make sure that the Department relates more closely to sectors of industry and provides us with an appropriate structure. It is not a precursor of an interventionist future for there is going to be no interventionist future.

    We want to see British companies win in the market places of the world. Coming second means coming nowhere, if you are second in a contract you do not get the contract. Unless you come first you might as well not have bothered. And what we seek to do is to strengthen our importance as a great trading nation and I make no apology for the determination of the government to help in achieving that objective.

    Today I have the pleasure of presenting some awards. But I would win a far greater prize for free enterprise if I could raise your eyes and other people’s eyes for a moment to the future and a wider opportunity.

    Let me state as a fundamental fact that I believe we must have consistency of economic policy. Business has been asking for this for decades so let us be consistent. I make no secret of the fact that I believe the economic policy we are following is the right economic policy, we are in the Exchange Rate Mechanism and we are staying in the Exchange Rate Mechanism. And I believe that will bring a very considerable prize within our grasp, that is a stable macro-economy, low inflation, permanently low inflation with enterprise freed not just from petty regulations but from the fear that all your efforts might come to nothing if you lose a gamble on the inflationary cycle. I want inflation to cease to be a matter for discussion in company boardrooms. Stable prices should be given, they should be expected, they have been for many years in the economies of some of our major competitors. Business has a right to expect stable prices and government has a responsibility to seek to deliver those stable prices.

    We are now getting inflation down and we mean to keep inflation down, it is fundamental to the health of the economy, it is fundamental to the health of free enterprise, it is not easy, it is painful, it does take a while but it is absolutely essential that we win that particular battle.

    It is of course in the nature of free enterprise to take risks, but the risks should not be the risks of the roulette wheel, the risks that you take should be those of challenging your competition in a fair race and in that we have a considerable competitive edge. We have always had the best scientists, the best innovators and I believe the best businessmen.

    In the 1980s we dramatically improved our performance in quality, in design, in marketing and in cross-competitiveness. And so in any fair race that might put us, British commerce and industry, among the favourites to win. And in this country we will have the added advantage that the social chapter, with its unwise costs and its unnecessary interferences, will not apply to us as it does to our principal competitors in the European Community. And let me tell you why it does not apply to us, it does not apply to us because I had no intention of removing government from your backs at home to have it reimposed by the European Community in Brussels, whether it be the social chapter or some other unnecessary imposition of that sort.

    But a low inflation economy is going to bring responsibilities for business as well as opportunities, it means greater responsibility for businessmen. Government are not going to bale out inefficiency or poor control of costs and wages by devaluation. There will be no return to the competitive devaluations of the 1960s and the 1970s, I believe they did terrible damage to British industry in the process and I am not going to return to that sort of policy again.

    And that means in future we will have to adjust our costs to the exchange rate rather than the other way around. And by us I include not just the private sector but the public sector. It is essential that we keep public spending under tight control and we intend to do so.

    Now some pessimists, and you see them, read them, hear them day after day, some pessimists, defeatists, have argued that we will never shake off the old ways, they argue that our history and our national character means that Britain will never be as responsible in controlling wage settlements and costs as our competitors abroad. well I believe that is blatant nonsense and if one looks at what is happening now I believe I can illustrate that. Pay settlements are running at about 4 percent, the lowest for many years; unit wage costs in manufacturing are falling and productivity is rising; our exports are at record levels despite the recession which also suggests that the Exchange Rate is not uncompetitive; and trade deficit in the European Community fell from 11 billion in 1990 to 2 billion in 1992.

    The 1980s were a remarkable decade, they were a decade of dramatic supply side reform. Let me pick up the point that you made a few moments ago, Chairman. We have by no means finished those supply side reforms. The President of the Board of Trade will be stepping up the drive against regulation at home and as a key aim of our Presidency, again to pick up the point you made, we will be pushing for more deregulation in Brussels. We are not just looking at less regulation from Brussels in the future, we are also looking to see what existing regulation in Brussels can be removed and removed speedily in the weeks and the months ahead.

    And let me just turn to one other vital supply side reform, and I refer to education. In the case of education, we have only just begun our reforms. John Patten will shortly be publishing further proposals for reform, they will be radical, they will be controversial, but they will be in the very best interests of our children. we will build on parental choice with more opting out, we will take determined action to rescue children whose prospects are blighted in the worst synch schools so often sited in so many of our great cities. A free enterprise culture needs recruits with skills, discipline and enthusiasm, they are the vital ingredients for success and we are determined to continue with our existing education reforms and to build on those existing education reforms to ensure that the education system produces the raw material upon which business can fasten and that will give business the skills that it needs to improve the private enterprise culture in the future. And that does mean an essential concentration on basics. To read, to write, to add up is the very basics of education in the early years of education. It does mean for those who are traditionalists that in terms of study Neighbours are out and Shakespeare is back in, and I must say, I believe that is the right decision.

    Mr Chairman, just let me say a further word to the three winners today. It is not perhaps my responsibility today to detail the remarkable achievements that have led to this award, but I would say this to them. There was perhaps a time in the past when business and business leaders were anonymous, but I do not believe any longer that is the case. The best of our great businessmen in this country are role models, as well as being the leaders of their own businesses, people know far more about them than ever they did before with the glare of publicity that follows both big business and every other aspect of public life these days.

    So their success will not just be a pleasure to themselves, not just important to their families and their shareholders and the country, it actually is a clear illustration to millions and millions of young people out there who see a free enterprise future of what can be achieved with the right talent, the right gifts, the right aptitude, the right consistency, the right innovation and the right luck, and I congratulate them most warmly on what they have achieved for themselves and on the importance of their achievement for those millions of other people around this country.

    Mr Chairman, in conclusion let me just simply say this, and I return to a theme I touched upon a moment or so ago but it is one I feel passionately about. Today I am presenting awards to outstanding examples of what I would call supply side achievement. In the 1990s we aim to add the missing ingredient to the policies of the 1980s and that missing ingredient is an environment of permanently low inflation, that prize is now within our grasp, let no-one, Mr Chairman, be in any doubt whatsoever that the government are determined that we will take this opportunity and keep that low inflation for it is vital to our future success.

  • PMQT – 14 July 1992

    Below is the text of Prime Minister’s Question Time from 14th July 1992.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Bowis : To ask the Prime Minister if he will list his official engagements for Tuesday 14 July.

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

    Mr. Bowis : Does my right hon. Friend agree that some people have still not learnt the lesson that real and lasting growth can come only with an economy that is based on low taxation and low inflation? Is not that the reason why last week’s figures were so good? Will my right hon. Friend keep at it and ensure that his election pledge to lick inflation is fulfilled?

    The Prime Minister : My hon. Friend is entirely right about that. I want to ensure that our record on inflation in the 1990s exceeds that of the 1980s, that we get inflation down to the lowest possible level and that we keep it there. Economic policy is geared to that end.

    Mr. Kinnock : Does the Prime Minister recall his promise in the election that a Tory victory would provide the spark to ignite recovery? Will the Prime Minister now admit that no such ignition has taken place and that there will be no real recovery as long as he continues with the policies that have already brought us two full years of recession?

    The Prime Minister : I shall turn to the right hon. Gentleman’s point in a moment, if I may, for this is the last occasion that we will be able to exchange comments over the Dispatch Box in this fashion. We have done so on many occasions in the past 20 months. We have often disagreed, sometimes we have agreed, but I should like to thank the right hon. Gentleman–[Hon. Members :– He’s going to resign.”] That is quite wrong; I am staying.

    I should like to thank the right hon. Gentleman for his support at times of crisis, for his strong support throughout the Gulf war and for the support that he has given us throughout the difficulties in Yugoslavia. On many occasions when he and I have had to deal privately with matters, without exception he has respected the confidences of those occasions. I am very pleased to have the opportunity to thank him for that and to do so publicly and with warmth.

    In direct response to the right hon. Gentleman’s question, he will know the view of the OECD and of the London business school, both of whose latest surveys forecast that recovery will be under way from the second quarter of this year. We share that view.

    Mr. Kinnock : I am grateful to the Prime Minister for his kind remarks. I consider it a great honour to have been able to serve my country in the way that I could. I know that he shares that vocation, and I hope that the country and its people can achieve greater success in the future.

    I put it to the Prime Minister that his strategy of perpetuating recession, combined with high unemployment, in an attempt to suppress inflation, has all the features of the slump of the 1930s. For the sake of our country, I put it to him that he should now recognise that continuation of those policies will not achieve durable or sustainable recovery, and will certainly not put our country at ease with itself.

    The Prime Minister : I respect the view that the right hon. Gentleman expresses, but I say in all sincerity that I cannot agree with him. The recovery–the jobs, the prosperity and the security–that everyone in this House wants for all our citizens can be based only on sustainable growth and low inflation. Unless we have low inflation as a base, we shall not get a form of growth that is sustainable. I realise that it is not easy, that it is uncomfortable and that it is frustrating when growth does not appear immediately, but I know of no other way to ensure the medium and long-term growth and prosperity of the nation, and I am determined to stick to the policies that I believe to be in our medium and long-term interests.

    Mr. Kinnock : May I say to the Prime Minister, with equal sincerity, that, after two years of recession, there is a very great danger that continuation of the present policies will risk driving the economy down so far as to make the prospect of recovery recede by years. I hope that the Prime Minister will use this summer to think again about the course of that policy and will adopt different policies that can give this country and its people the chance of jobs, growth and success, which we have not enjoyed in the immediate past.

    The Prime Minister : The Leader of the Opposition and I agree about what the objective is, but I regret that we do not agree about the basis that is necessary to achieve it. One needs to look at what is happening. The volume of exports was at a record level in May ; our volume share of world trade has recovered, after being in decline for many years ; car sales are increasing ; producer price inflation is at a very low level indeed. The ingredients are there. I return to the independent view of both the OECD and the London business school that recovery will be under way in the second half of this year. And it will be recovery based on a rate of inflation that is far lower than anyone in this House predicted 18 months ago. It is from that base that we shall get the growth that we all wish to see.

    Sir Michael Marshall : In a week that marks the 75th birthday of the British space pioneer Arthur C. Clarke and his visit to the House of Commons will my right hon. Friend take this opportunity of assuring the House that during our presidency of the EC Her Majesty’s Government will make every effort to take initiatives in the space field to improve the quality of life and assist British industry?

    The Prime Minister : I think I can give my hon. Friend the assurance that he seeks. I welcome the visit of Mr. Clarke to the House. We shall continue to take initiatives, within Europe, internationally and in other forums, in pursuit of space priorities. We are particularly interested in the development of Earth observation systems for the monitoring of the environment and of climate change.

     

    Q2. Mr. John D. Taylor : To ask the Prime Minister if he will list his official engagements for Tuesday 14 July.

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

    Mr. Taylor : May I take this opportunity to register the thanks of the Ulster Unionist party to the Leader of the main Opposition party for the leadership he has given to Her Majesty’s Opposition. It has been a privilege to work with him in recent years.

    Now that the inter-party talks on Northern Ireland have advanced to strands 2 and 3, in which Her Majesty’s Government are no longer in the chair but are equal partners with the other participants, may I ask the Prime Minister whether he recognises that progress towards real understanding, recognition and mutual respect in the island of Ireland depends upon the removal of articles 2 and 3 from the constitution of the southern Irish republic? Will Her Majesty’s Government take the opportunity available to them in strands 2 and 3 to request the Dublin Government to remove their constitutional claim over that part of the United Kingdom known as Northern Ireland?

    The Prime Minister : The hon. Gentleman is right in saying that articles 2 and 3 are important ingredients in the progress that has to be made. I welcome the talks at Lancaster House last week and I look forward to further substantive talks in Belfast later this week. This is an historic opportunity. I have made that clear to the Taoiseach. I think that he shares that view. He was generous enough to do so in a joint message just a few days ago. It would not be helpful for anyone to say a great deal about the talks while they continue, not least because the participants have agreed on the vital importance of confidentiality. But the talks have gone further than many imagined. The position is more hopeful than it has been for many years. We must all hope that the talks can make further progress.

     

    Q3. Mr. Patrick Thompson : To ask the Prime Minister if he will list his official engagements for Tuesday 14 July.

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

    Mr. Thompson : In the light of the harrowing plight of the children of Sarajevo, is there any immediate prospect of medical assistance being sent or provided to help with the terrible suffering which is occurring there?

    The Prime Minister : Some progress has been made this morning. I am pleased to be able to tell my hon. Friend that a team of eight doctors and nurses from the South Manchester accident and rescue team is assembling its emergency supplies. Subject to the necessary clearance from the United Nations, which we expect to receive shortly, the team will fly out to Zagreb later today or tomorrow. It will link up with the United Nations and United Kingdom medical teams already in the area. It will be there both to offer immediate medical assistance as required and to report back to me with an on-the-spot assessment of the best way in which we can help those tragic children.

    Mr. Ashdown : In view of the Prime Minister’s previous statements, can he deny that unemployment will be at or through 3 million by Christmas?

    The Prime Minister : As the right hon. Gentleman knows, no Minister of any Government has made projections of unemployment. I do not intend to start. We shall have some more figures later this week. The right hon. Gentleman will be able to make his own assessment.

    Mr. Alan Howarth : Does my right hon. Friend recall the words of the former leader of the Labour party that “inflation is the father and mother of unemployment”?

    Does he agree that inflation is a social as well as economic evil that has dogged this country for a generation? Does he accept that he has wide support in the country in his determination to seize the opportunity that we have now to defeat inflation decisively?

    The Prime Minister : I believe that my hon. Friend is right. I well recall the quotation that he uses. We have the headline rate of inflation down to 3.9 per cent. and the underlying rate of inflation effectively down to 4.8 per cent. Both are falling. That is very welcome news indeed.

     

    Q4. Mr. Cummings : To ask the Prime Minister if he will list his official engagements for Tuesday 14 July.

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

    Mr. Cummings : Is the Prime Minister aware that tens of thousands of chronically sick and disabled people are awaiting the determination of their application for disability living allowance? Is he further aware that, following a period of 10 months, the family of a late constituent of mine received a determination two days after the lady died? What does the Prime Minister intend to do about that disgraceful state of affairs?

    The Prime Minister : We seek to process such applications as speedily as possible. The Benefits Agency is examining the difficulty and putting in staff to address it as speedily as possible.

     

    Q5. Mr. Devlin : To ask the Prime Minister if he will list his official engagements for Tuesday 14 July.

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

    Mr. Devlin : Is my right hon. Friend aware of the great pride in the north-east of England that Britain is shortly to become once again a net exporter of cars? Is not that a tribute to both the motor industry in general, which has restructured in the past few years, and to the Government’s success in attracting inward investment to Britain?

    The Prime Minister : Yes, I believe that the attraction of inward investment is very important. Among other things, it relies on very low inflation and stable economic policies which do not change and are well understood. There is no doubt that the British car industry has made excellent progress in improving competitiveness and significantly reducing the balance of payments deficit on trade in the automotive industry. In welcoming that, I agree with my hon. Friend about the importance of inward investment, most notably, in that instance, in the motor car industry from Japan.

    Mr. Turner : Is the Prime Minister aware that his notion of the freedom to choose is an empty gesture to millions of people in this country? When they have paid their electric, water and gas bills, they find that they have nothing left for the simple pleasures of life. When will he do something to help those people, instead of helping the better off whom his Government have always helped?

    The Prime Minister : I am not sure that that is the invariable view of people who would call themselves better off. Of course we are concerned to help people who find themselves in such difficulties, and our policies have done so consistently during the past 12 years. What the hon. Gentleman and his right hon. and hon. Friends do not like is choice itself. That is why they did not want to sell council houses, why they did not want people to choose what schools they have, and why they do not like choice in health. The truth is that when people choose, they choose conservatism and not socialism.

  • PMQT – 18 June 1992

    Below is the text of Prime Minister’s Question Time from 18th June 1992.

    PRIME MINISTER:

     

    Official Visits

    Q1. Mr. Sumberg : To ask the Prime Minister when he next expects to pay an official visit to Bury.

    The Prime Minister (Mr. John Major) : I shall be making further visits to many parts of the country and hope to include my hon. Friend’s constituency among them.

    Mr. Sumberg : Is my right hon. Friend aware that at tonight’s annual general meeting of the Bury, South Conservative association we shall celebrate our recent victories in the local and general elections and welcome my right hon. Friend’s recent speech on the citizen’s charter to the Adam Smith Institute, in which he made it absolutely clear that in the battle between the Goliaths, who want greater state intervention, and the Davids, who want greater individual freedom, he backs the Davids every time?

    The Prime Minister : I wish that I could be with my hon. Friend this evening for his celebrations. The people of Bury, South made a wise choice, and they certainly did in the general election. My hon. Friend is right : I want to see a change in attitude in many areas of public services. We need public services that meet what the public want, not what the so-called experts tell them they should have.

     

    Q2. Mr. Austin-Walker : To ask the Prime Minister what plans he has to pay an official visit to Woolwich.

    The Prime Minister : I will be making further visits to many parts of the country and hope to include different parts of London among them.

    Mr. Austin-Walker : Does the Prime Minister share the enthusiasm of the President of the Board of Trade for the economic regeneration of the east Thames corridor? Does he share the views of previous Secretaries of State for Transport that the Jubilee line is essential for that economic regeneration and that it can be achieved at far less cost to the Exchequer than building the east London river crossing and without the environmental damage that would ensue from the road?

    The Prime Minister : I hope that in due course we shall be able to proceed with the Jubilee line, but we shall wish to see the private sector contribution that we previously set as the sum necessary to ensure that we can proceed. Providing we can achieve that, I hope that we will be able to proceed with the Jubilee line. Economic regeneration is welcome everywhere.

     

    Engagements

    Q3. Sir Anthony Durant : To ask the Prime Minister if he will list his official engagements for Thursday 18 June.

    The Prime Minister : This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

    Sir Anthony Durant : Does my right hon. Friend agree that the reduction in nuclear weapons that was agreed between President Bush and the Russian President is good news and is to be welcomed? However, will he assure the House and the nation that he will maintain strong United Kingdom defences within NATO and will continue with the Trident programme?

    The Prime Minister : I warmly welcome the announcements that were made after the meetings in Washington between President Bush and President Yeltsin. We shall certainly continue to maintain our own independent nuclear deterrent. We shall maintain it, build it, arm it and deploy Trident.

    Mr. Kinnock : On this day on which unemployment has gone above 2.7 million again, does the Prime Minister recall that it is exactly a year since he said that economic recovery would begin–and I use his words– “within weeks” and that Britain would come out of recession by the end of 1991? Why was he so absurdly wrong?

    The Prime Minister : The right hon. Gentleman will have been very pleased to see the economic indicators this week in the light of that remark–very pleased indeed. He will have been pleased to see that manufacturing production has risen for three months in a row for the first time in two years, that retail sales are up again, that the rate of increase in average earnings has slowed further to 7 per cent. and is now at its lowest level for 25 years. While the increase in unemployment is very unwelcome, it is clearly now slowing, so I think that the right hon. Gentleman can now see that we are on the road to recovery.

    Mr. Kinnock : I am always glad to see any movement out of the trough into which this Government’s policies have pushed the British people and the British economy, but, after the Chancellor’s statement yesterday that Britain is three years away from full recovery, as he put it, is not it clear that whenever the Prime Minister or the Chancellor have made optimistic comments about the economy, they have simply not been telling the truth to the British people?

    The Prime Minister : The right hon. Gentleman should not be misled by everything that he reads in newspaper headlines ; he should read the speech itself. He should recall that in January he relied a touch too heavily on a press report and criticised me when he was confusing taxes and interest rates. The reality was that what my right hon. Friend actually said yesterday was :

    “In two or three years’ time people will look back and see that it was now, at this critical juncture, that the right decision was taken.”

    He did not say that it would be two or three years before recovery.

    Mr. Kinnock : Is the Prime Minister giving us a date for recovery? He used to be very anxious so to do. I remind him that this time last year he said that it would start “within weeks”. This time last year he said that there would be recovery by the end of the year. Why is he much more coy now, a year later, in giving us a firm forecast on when Britain can rejoin the countries that enjoy some growth, since we have now had two years with negative growth under his Government?

    The Prime Minister : I think that the right hon. Gentleman should now know that we are on our way to recovery, and if the right hon. Gentleman wishes to know perhaps why the recovery was later than it might have been, I quote the words of the general secretary of the Labour party who claimed that the Labour party did not win the election because of the

    “fear of high tax, plus general unease about [Labour’s] economic competence.”

    That did no good at all while the right hon. Gentleman was boasting that he would be sitting on this side of the Chamber.

    Mr. Renton : While I hope that the Irish people will reach a positive conclusion in their referendum today, does my right hon. Friend agree that the holding of referendums on major constitutional issues runs contrary to the practice of parliamentary sovereignty in this country and that further, it would be impossible to boil down the many complex issues of the 134-page treaty of Maastricht into one short, but fair and comprehensive question? Further, has the Prime Minister noted–

    Madam Speaker : Order. One question.

    Mr. Renton : –the recent twists and turns on the European issue by the Labour leader?

    Madam Speaker : Order. The right hon. Gentleman is being very unfair in putting so many questions in a short space of time. I call the Prime Minister to answer the first two.

    The Prime Minister : I entirely agree with my right hon. Friend’s comments on the subject of referendums. I believe that he states the classical position concerning parliamentary democracy.

     

    Q4. Mrs. Fyfe : To ask the Prime Minister if he will list his official engagements for Thursday 18 June.

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

    Mrs. Fyfe : As the Prime Minister says no to a devolved Scottish Parliament, against the wishes of the majority of the Scottish people, and also says no to a referendum on how Scotland should be governed, will he tell us to what, after 10 weeks of taking stock, he is prepared to say yes?

    The Prime Minister : I shall tell the hon. Lady when we have concluded taking stock.

     

    Q5. Mr. Evennett : To ask the Prime Minister if he will list his official engagements for Thursday 18 June.

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

    Mr. Evennett : I congratulate my right hon. Friend on his excellent speech to the Adam Smith Institute, in which he advocated more choice and opportunity for the less privileged in our society. Does he agree that we have a lot to do for our inner cities–and in particular that we must ensure that standards in inner-city schools are raised?

    The Prime Minister : I certainly agree with my hon. Friend about that. We are determined to raise standards in all our schools, and especially to deal with the problem that clearly exists in many of our inner-cities. I believe that school governors and education authorities must act quickly where inspectors’ reports show that standards are unacceptably low. That is too often the case in many of our inner-city schools, and the Government do not intend to stand idly by and see it continue.

    Mr. Ashdown : What will the Prime Minister do about unemployment, which is now rising inexorably towards 3 million? It is now two months since the election, and only a handful of weeks until school leavers come on to the register. Are the Government so consumed by self-satisfaction and so sunk in lethargy that they offer no hope, no policies and no action for those who are losing their jobs?

    The Prime Minister : I am in no sense satisfied with the level of unemployment in this country, and I have made that clear before. We need the right sort of economic policy, which will sustain long-term employment prospects ; that is what we are putting into place and we shall ensure that we achieve it.

    When the right hon. Member for Yeovil (Mr. Ashdown) asks for action he means short-term subsidy–that is what he is really asking for. His only answer is to subsidise the inefficient, the uneconomic and the out of date. No wonder the Liberal Democrats have so much in common with the official Opposition.

     

    Q6. Sir Michael Neubert : To ask the Prime Minister if he will list his official engagements for Thursday 18 June.

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

    Sir Michael Neubert : Is the Prime Minister aware that a distinguished predecessor and former Minister for administrative affairs– Mr. Jim Hacker–reaches pensionable age today? In the spirit of that great statesman, I, too, welcome the Prime Minister’s speech to the Adam Smith Institute this week. I also ask my right hon. Friend to urge his colleagues at tomorrow’s citizens charter seminar at No. 10 to press forward with further improvements to our public services. In particular, will he tell us whether we can expect the publication of a courts charter, to deal with the interminable delays to which so much of our law is subject?

    The Prime Minister : Yes, my hon. Friend touches an important matter, which causes frustration for many of our fellow citizens. We are proceeding to produce a courts charter and I hope that we shall be able to make announcements about it before too long.

     

    Libya (Sanctions)

    Q7. Mr. Dalyell : To ask the Prime Minister if he will make a statement on representations from Arab countries about sanctions against Libya.

    The Prime Minister : We have had various approaches from Arab countries about sanctions against Libya. We and the Arab League share the same objective–to see a satisfactory outcome to the Lockerbie problem. This, as the Arab League well knows, will require Libya’s full compliance with United Nations Security Council resolution 731.

    Mr. Dalyell : In the light of my two letters to the Prime Minister on this subject, will he consider putting in the Library a response to the cover story of Time magazine–not exactly a publication of the left–which challenges the whole basis of the Anglo-American position? Will the right hon. Gentleman also consider approaching Spain on the legal proceedings relating to Monzer al Kassar, a Syrian drugs and arms dealer?

    The Prime Minister : I saw the article in Time magazine ; I examined it and sought advice on it. The theories about involvement and links with drugs are not new. They were thoroughly examined by the police during the investigation and were discounted at that stage, at the conclusion of the investigation. No evidence has yet been found to link the Syrian, al Kassar, to Lockerbie–but I shall, of course, examine the matter again in view of the hon. Gentleman’s representations.

    Mr. Wilkinson : Can my right hon. Friend enlighten the House about any dealings between Government officials and the Government of Libya over links between the Libyan regime and the Irish Republican Army? Has the IRA received any supplies from Libya recently? Have the Libyan authorities given assurances to the Government that they will not continue to supply the IRA?

    The Prime Minister : The Libyans have provided some information to the Government about their relationships with the IRA ; they did so in Geneva on 9 June. The preliminary assessment of that information suggests that although in places it was incomplete and unsatisfactory, it contains some positive elements which may well prove useful. One positive development is the fact that the Libyans have indicated to us that they wish to cease providing assistance to the IRA. We are not convinced that that is yet the case.

  • Mr Major’s Speech to the Institute of Directors – 28 April 1992

    Below is the text of Mr Major’s speech made to the Institute of Directors on 28th April 1992 at the Royal Albert Hall in London.

    PRIME MINISTER:

    Mr President, Your Royal Highness, Your Excellencies, My Lords, My Lord Mayor of Westminster, Ladies and Gentlemen, I am delighted to be able to be with this Institute so soon after the General Election. It was an historic election. One that has rekindled confidence, and swept away the uncertainty that was holding back recovery.

    If we are to build a better future, then there is only one sure way it can be done. That way is by policies that promote the strength of industry and commerce and the principles of the free market. Experience has shown repeatedly that high tax, high inflation, trade union run, interventionist, and bureaucratic policies are not the way to achieve success. Our job in the years ahead is to persuade more and more people to listen to the truth. If we can remove that pendulum of uncertainty that all too often effects business prospects ahead of general elections, then we will have taken a mighty stride to continuing prosperity.

    Few voices have been more persuasive in pressing the case for free market ideas than this Institute. I am glad to be here today to thank you for the past you have played in winning the battle of ideas. Neither the red rose nor the prawn cocktail ever swayed your judgement.

    You stood firm for what you believed. So did we. I hope we will now go on working together in order to root the values of enterprise, choice, ownership, and opportunity even deeper into the bedrock of Britain. They are the values in which we all believe. We dare not take them for granted and we must never cease to fight for them.

    Throughout the election campaign I believed that recovery was waiting in the wings once confidence was restored. Some may have thought that this was the fanciful kind of thing that people say in the heat of an election campaign. Such things have been known. But I never doubted it. And the world clearly thought that recovery had started on Thursday night – the markets stayed open, and every one of them passed that judgement. In the light of the election result – and the response to it – I am more confident than ever that recovery is underway. We need a recovery that is steady and sustainable, not one that recreates the problems from which we are now emerging.

    Inflation has been going down – down below German levels for the first time since before man walked on the moon. And since April 9th, progress has continued. The pound going up. Tax cuts soon to come through again under a Conservative Chancellor. And let me say, I believe that Norman Lamont has done an outstanding job for Britain, not only in his latest Budget, but over the last difficult year and a half. Never taking the easy road – but always the right one. And rarely getting the credit for it.

    And those tax cuts will be deliberately targeted on those on more modest incomes. Not – dare I say it – on Directors but on people in modestly paid jobs: they might be young people starting out in life, part-time workers, many of them women, or disabled people who often command only modest incomes. But they will all benefit from having more money to spend as they think fit. And business will benefit too as their employees face less punitive taxation.

    Last month, the rise in unemployment was the smallest for nearly two years. Of course, we should not read too much into one month’s figures, but this is a hopeful sign and as recovery develops we can look forward to the figures steadying and then once again coming down.

    Certainly I now expect retail sales to move ahead. Business confidence is seen to be growing in survey after survey. Those are the sure signs of recovery. And as spring advances so will confidence.

    I do not pretend for a moment that the last years have been easy. Recession never is. I know the toll it has taken on businesses and on individuals. That is why I have been so keen to put in place economic management that minimises the risk of such a recession occurring again.

    But the problems should not blind us to the underlying changes which have taken place in Britain over the last decade. Or to the reasons why we have held firm over the last few months and years. Britain has changed immeasurably for the better. And we took the action we did – because we want a strong Britain, one that continues to grow in what will be the most competitive decade we have ever seen.

    In every part of Britain there remains a new spirit of enterprise. The small business sector is alive and growing. Management and workforce in our larger firms working as one to take on the competition and win. More workers having a direct stake in their companies – and I want to see a great deal more of share ownership like that. It has played an important part in improving industrial relations and in spreading wealth far more widely among our workforce.

    I see quality, design, and service once more at the forefront. ‘Made in Britain’ is again a badge of pride. I see British companies pushing forward the frontiers of innovation – in pharmaceuticals, electronics, telecommunications, indeed right across manufacturing industry. I see how productivity in Britain has risen by leaps and bounds.

    Last year the number of days lost to strikes was the lowest ever. Why? Because we changed industrial relations and changed industrial attitudes. The British disease? We can forget all that now. We cured it. And now half the world is queuing up for a dose of British medicine. That’s good for Britain. Good for our name. Good for our exports. Good for investment. Good for jobs.

    The British people did not want to see trade union power restored. That was one more reason why they supported us. People now look to us, as I know British industry does, to complete the work of trade union reform – and I promise you we will.

    We intend to introduce legislation shortly, as we said we would in our Manifesto. We will make automatic deduction of union membership dues without written authorisation unlawful. We will take measures to give individuals greater freedom in choosing a union. We will require all pre-strike ballots to be postal and subject to independent scrutiny, and that at least seven days’ notice of a strike is given after a ballot. And, as we promised in the Citizen’s Charter White Paper, we will give every person who uses public services the right to restrain the disruption of those services by unlawful industrial action. Never again should the hard-pressed consumer be held to ransom by illegal strikes of this kind.

    People also look to us to hold at bay that damaging social chapter in Europe that our opponents were jostling to sign. That, too, I promise you we will do. I believe strongly in deregulation, in getting government off the back of business. I want it to be understood throughout the Community that unnecessary interference with working practices is bad for business. I trust that that message will not be lost when the European Social Affairs Council reaches its conclusions on the Working Time Directive. It does not help the standing of the community when certain matters relating to employment are brought forward on the questionable basis that they are something to do with health and safety. I am not prepared to wave through plans that would add some five billion to the costs of British industry. Our European partners are keen to change existing legislation and place limits on shift patterns, prohibit working for more than 48 hours a week and sharply restrict Sunday working. They have a different structure of employment in their countries. These measures in the proposed Working Time Directive would hurt British industry and destroy jobs. They are not for us. No-one should be in any doubt. A Conservative Government will strongly oppose such damaging regulation wherever it is found and we will not readily acquiesce in any attempts to impose these costs on our industry.

    In the last thirteen years Government policies have made Britain a magnet for overseas investment. By 1990 we had received 40 per cent of Japanese investment in the European Community, five times as much as in Germany or in France. Much of that investment has been in British manufacturing industry, using our manufacturing skills. It is high time people stopped writing down our skills and damaging British manufacturing industry.

    It is true that some older industries have contracted, though in the process some, like steel for instance, have turned from industrial albatrosses into world leaders. But other industries have forged ahead. The output of the chemicals industry rose by 40 per cent in a decade: and that of plastics processing has nearly doubled in real terms. The UK is now the world’s third largest exporter of pharmaceuticals, and the information technology industry is thriving. Nearly one in ten of all the world’s personal computers are now made in Scotland.

    It is scarcely surprising that our share in world trade in manufactures is growing. Manufacturing productivity between 1980 and 1990 grew faster than in any other large industrial country – our best performance in any decade since the war. We should talk this record up, not talk it down. We should tell people that our manufacturing exports are reaching new records. Exports are up by three quarters on levels of a decade ago. We are now even a net exporter of television sets. And the British motor industry is becoming feared abroad for its export challenge, not jeered at, as it once so humiliatingly was, for strikes, poor quality and late delivery.

    That is the measure of the British achievement. And the members of this Institute have played a huge part in bringing it about. I see enormous international opportunities for us in the 1990s. And I want us to take them. Not just as leaders in defence and foreign affairs, but as increasingly powerful competitors in the international market place. Britain is ready to move forward, just when some of our main rivals are running into difficulties, or sliding back. These are opportunities that we must take. I am determined that we will take them.

    I believe the 1990s should usher in a new era for prosperity and for jobs in Britain. Things that they said could not be achieved together are now in prospect together. They will be our targets in the 1990s – stable prices, sustained industrial peace, free enterprise given the chance to compete and to win, lasting growth without the scourge of inflation.

    Our fourth Election victory has cemented the foundations for that success. It has opened up further opportunities. It has enabled business to invest with confidence and create the growing wealth our country needs.

    The completion of the single market in Europe is essential to that. That will be the number one on our list of priorities when we assume the Presidency of the Community in July.

    I make no secret of my view that we want a Europe that is a community of nation states. I do not want a United States of Europe. Such a concept could never be in the interests of the British people. Nor should responsibility be given to the Community when it can better be discharged at national or local level. That is a principle that I fought for at Maastricht. The principle of subsidiarity. You can take it from me that it is a principle to which this Government will hold fast. And to which it will hold Europe fast.

    And you can also be assured of this. The Single Market in Europe must be a genuine free market, right across the Community. Yes, where necessary, there must be common rules. That is essential. But rules, once agreed, must also be obeyed. Some of our partners have been keener on making new rules than keeping them. That is why at Maastricht we pressed successfully for new ways of making those who drag their feet come into line. For the first time, the European Court will have powers to impose finds on member states which do not comply with the rules. I am not prepared to see British business put at a disadvantage in countries that fail to meet their Community obligations. As a result of Maastricht, they will not be.

    Let me also add this. For it is fundamental to my belief about the future of the Community. The borders of Europe do not stop in the centre of our continent. We must not replace the iron curtain that has been torn down with a new regulatory net.

    In my view we have a truly historic decade before us. Who in this room really thought that they would love to see an end to communism? That they would watch on television the miracle of 400 million people being set free at last? Well, in 1992 we are seeing the birth of a new world. It is every bit as remarkable as that discovery of another New World five centuries ago in 1492. This new world will be based on our free market principles of enterprise, ownership, democracy and choice. We must go out there and work to make it secure. The world has made its choice between socialists and free markets. And it has chosen free markets.

    Already many of you are reaching out to these newly free nations of the East – to Hungary, to Poland, to Czechoslovakia, to Russia itself. As you do that, so must the Governments of the West. We must not, in our European Community, look in on ourselves. We must take the historic opportunity that has been offered to us. I want Britain to lead the way to a wider, more open and outward looking Europe. One which brings into the fold, as and when they are ready, not just the old neutral states of central and northern Europe, but the emerging democracies of the East. That is what we are going to be pushing for with the Presidency and beyond. What we must say to them is: when you’re ready to join the Community, we’re ready to accept you.

    And not just for economic reasons. The greatest prize we could leave to the next generation would be to spread to the nations of the east that gift of security and peace which has been the greatest benefit of the European Community. Never again must Europe be the cradle of world conflict. A wider Europe of nations working in partnership, reaching to and embracing Russia itself – that is our goal. That would be a better and a safer Europe. We may not see it in our political lifetime. But that is what I will be working for. And one day, I am certain, it will be achieved.

    Ladies and gentlemen, there are great challenges ahead for the Government and for industry. And also great opportunities. We must be determined to meet those challenges and take those opportunities. I promise you that the Government will be strong in pursuit of all that is in your interest and in that of all our nation.

    To do that we must be sure in our values. Sure in our policies. Sure in our faith in the quality of Britain and in its people. Our policy will be to trust the people. To give them choice. To give them opportunity. And to give them ownership.

    I have no doubt that the people of this country want a low tax, low inflation Britain in which success is possible and ambition rewarded. They want a Britain which recognises indisputably at last that free enterprise – not state intervention and socialism – is the route to national health and personal prosperity.

    That was the golden discovery of the 1980s – proof, here in Britain, that more private wealth means more public wealth too. We cut income tax. But we still created the wealth to spend far more and to far better effect on our National Health Service and on pupils in our schools.

    Private wealth and public welfare growing together hand in hand – it was the secret for which generations had looked in vain. Now in the 1990s, I promise you, we will go on with the policies that have been so successful. “Time for a change”, some said. Yes, but not the changes they had in mind.

    Our objective is a country in which everyone – everyone – feels they belong. Where they can own homes, own savings, and own shares in their industries – and then pass them on to the next generation. Where every child leaves school well prepared for the changing world that lies ahead. Where more young people go into higher education and can choose the training they need. Where everyone feels they have a growing stake in the future of the United Kingdom.

    It is free enterprise that will create the ideas, the jobs, the wealth, the public services that will make all this possible. Free enterprise. Your enterprise.

    Recovery is now under way. Our job is to build it. To make it secure and to make it grow. And that, I promise you, we will seek to do.