Tag: Inflation

  • PMQT – 26 January 1993

    Below is the text of Prime Minister’s Question Time from 26th January 1993. Tony Newton responded on behalf of John Major.


    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Battle : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    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 making official visits to India and Oman.

    Mr. Battle : Is the Secretary of State for Employment telling the truth when she says that the President of the Board of Trade did not consult her about pit closures?

    Mr. Newton : If the hon. Gentleman thinks that my right hon. Friend was not consulted, would he like to tell me how it was possible for her to announce on the same day a wide-ranging package of measures directed at employment?

    Mr. Rowe : My right hon. Friend will be aware that as our trade with the European mainland constantly increases, a large proportion of it must pass through the county of Kent. Is he aware that the county of Kent and all the district councils in Kent are desperate to have a considerable portion of that freight transferred to the railways? Will he ensure that when Ministers are considering the present proposals for the railways and the channel tunnel rail link, they do everything in their power to ensure that it is made possible for freight to be carried on the railway rather than on the cluttered roads of Kent?

    Mr. Newton : As my hon. Friend knows, it is precisely to improve the efficiency and attractiveness of rail freight that many of our proposals in the context of the future of the railways are directed.

    Mr. John Smith : Given that the crisis in the coal mining industry arises directly from the Government’s rigging of the electricity market, why will the Government not accept that reform of the market to allow coal to compete fairly is the crucial and overriding issue?

    Mr. Newton : I do not accept for a moment the right hon. and learned Gentleman’s suggestion. The problems in the coal industry arise from a long -term decline in the demand for coal which is being seen throughout the western world. The Government’s policies are directed to addressing that and to securing the best possible future for the coal industry.

    Mr. John Smith : It is little short of astonishing that, even now, Ministers do not understand that the crisis arises from the botched privatisation of the electricity industry and not from any weakness in the British mining industry. Are the Government not aware that what the industry and the nation need is not some short-term fix to save the Government’s face but a reform of the electricity market to allow British miners to compete fairly?

    Mr. Newton : My right hon. Friend the President of the Board of Trade will shortly bring forward proposals directed at the outcome of his review of the coal industry. Meanwhile, if I find anything astonishing, it is that on a day when interest rates have fallen to their lowest level for 15 years, the right hon. and learned Gentleman cannot even congratulate the Government.

    Mr. Raymond S. Robertson : Has my right hon. Friend had time to read the Confederation of British Industry’s latest poll, which shows the biggest increase in business confidence for five years? Does he agree that low inflation, low interest rates and a very competitive exchange rate give British producers a real edge in world markets?

    Mr. Newton : I absolutely agree with my hon. Friend. We now have inflation at its lowest level for six years, interest rates, as I said, at their lowest level for 15 years, mortgage rates likely to be at their lowest level for nearly a quarter of a century and a marked increase in business confidence. We need Opposition Front-Bench Members to stop talking that confidence down.

     

    Q2. Rev. Martin Smyth : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I have been asked to reply.

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

    Rev. Martin Smyth : In the light of press reports confirming the “Timewatch” programme and–as some of us have known for a long time–that the Dublin Government supported the growth of the provisional IRA in 1970, will the Leader of the House join the defence correspondent of The Daily Telegraph this morning in urging the Foreign Office and the Northern Ireland Office to engage in a diplomatic offensive against the Dublin Government to defeat terrorism and thus release 10 batallions of the Army to engage in international peacekeeping ?

    Mr. Newton : While I understand why the hon. Gentleman thought it right to raise that point, I have no intention of commenting on allegations relating to events nearly a quarter of a century ago. What matters now is the shared determination of the British and Irish Governments to resist terrorism from whatever quarter, and I know that we have the hon. Gentleman’s support in that.

    Mr. Budgen : Will my right hon. Friend reflect that had we not so fortunately come out of the exchange rate mechanism on 16 September we might now have interest rates at something between 10 and 15 per cent. imposed upon us by the Bundesbank and against the interests of the British economy? Will my right hon. Friend be good enough to suggest to the Prime Minister that the best thing that he could do to revive confidence in the British economy would be to say that we shall never return to the ERM and that we want nothing whatever to do with a single currency in Europe?

    Mr. Newton : I do not think that, however enticing it is, I shall follow my hon. Friend into speculation about what would have happened if something that already has happened had not happened. He will know what my right hon. Friend the Prime Minister has said about the ERM and I do not propose to elaborate on it now.

     

    Q3. Dr. Berry : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I have been asked to reply.

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

    Dr. Berry : Taking a more serious perspective on the economy than previous comments from Conservative Members, will the Leader of the House explain to the 4,637 unemployed people in my constituency of Kingswood and the 5,000 in his constituency of Braintree how it is that they are “a price worth paying” for the worst economic record of any post-war British Government?

    Mr. Newton : What I would say to those for whom concern is mutual on both sides of the House is that the policies that we have been pursuing and which have produced the results to which I adverted a few moments ago are providing the best basis for overcoming those concerns.

     

    Q4. Mr. Peter Bottomley : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I have been asked to reply.

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

    Mr. Bottomley : May I suggest to my right hon. Friend the point that he has made which will get the greatest echo from all political parties? The boost to jobs, the reduction in mortgage payments and the boost to capital investments from low interest rates will make people ask whether it is possible for the Leader of the Opposition to join with the Government in helping to attract more foreign capital investment into this country–and more jobs–so that fewer people will be out of work.

    Mr. Newton : It would certainly be very welcome far beyond the confines of the House if the right hon. and learned Gentleman would give any sign whatsoever that he sees what would be required. Instead, he promises payroll taxes, excessive profit taxes, social chapters and the rest of it, which would keep foreign investment out for good.

     

    Q5. Mr. Tony Lloyd : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I have been asked to reply.

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

    Mr. Lloyd : Continuing with the bipartisan interest in unemployment, may I tell the Leader of the House that in my constituency mass unemployment during the 14 years of Conservative government has resulted in high crime rates, the sale of drugs and its associated violence and individual family tragedies? My constituents are now incredibly angry at the inaction of the right hon. Gentleman and his colleagues. Rather than asking my right hon. and learned Friend to help them out, will the Leader of the House tell us what the Government plan to do about these problems, when will they do it and when can we see some results?

    Mr. Newton : I find that a strange question, especially against the background of our exchanges so far and on the very day that interest rates have fallen to their lowest level for 15 years. What is more, the hon. Gentleman might at least have acknowledged that unemployment in his constituency last month was 16 per cent. lower than in 1987.

    Mr. Butcher : Did my right hon. Friend notice the very welcome announcement by Jaguar in Coventry that it is to invest £700 million in developing three new models for the market? When our right hon. Friend the Prime Minister returns to the House, could he pass to him an invitation to visit Coventry so that he can show his support for the engineering profession and the engineering industry which will spearhead our recovery?

    Mr. Newton : I note my hon. Friend’s request, which I shall draw to our right hon. Friend’s attention when he returns. One of the encouraging signs in our economy during recent months has been the renewed strength of the car industry, in part as a result of the very overseas investment to which I referred earlier and which certainly would not have come here had the Opposition had their way.

     

    Q6. Mr. Gerrard : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I have been asked to reply.

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

    Mr. Gerrard : Does the Leader of the House recall that in March 1991 the Government tried to buy their way out of their troubles with the poll tax by reducing it by £140 a head? They found the money to do that by raising VAT from 15 to 17.5 per cent. Now that the poll tax is finally about to disappear, can we expect VAT to be cut by 2.5 per cent? If not, why not?

    Mr. Newton : The hon. Gentleman can expect the introduction of a system of council tax that will be a great deal better than what his right hon. and hon. Friends are offering with a return to the rates.

    Mr. Tracey : Is my right hon. Friend satisfied that the fullest possible investigation is being undertaken into the behaviour of Lambeth borough council, where one of the greatest frauds ever perpetrated in local government appears to have taken place?

    Mr. Newton : I think–I hope–that I can speak for both sides of the House in expressing concern about the allegations of a breakdown in financial control in the London borough of Lambeth. The proper authorities- -the Audit Commission and the police–will be investigating the matter. As my hon. Friend says, if the allegations prove to be true, it will be a good illustration of some of the problems in Labour local authorities. I hope that the Opposition Front Bench will join us in condemning them.

     

    Q7. Mr. Hoyle : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I have been asked to reply.

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

    Mr. Hoyle : Does the Leader of the House agree that when considering energy policy, we should look not at short-term market forces but at long- term needs? That applies especially to collieries threatened with closure, such as Parkside. It has always been highly profitable and it has reserves for 70 years. Should not the future of such collieries be based on the future demand for coal, which will become increasingly competitive as other fuels become more expensive?

    Mr. Newton : By now, it must be clear to all in the House that the review is very thorough and is not looking simply at the short term. It is taking account of the reports by Committees of the House and a wide range of independent consultants. The results will be made known in due course, as appropriate.

    Mr. Milligan : My right hon. Friend has just explained the position in Lambeth, but is not Lambeth only one of many similar Labour local authorities throughout the country? For example, Monklands and Sheffield have been misusing taxpayers’ funds, yet they have some of the poorest taxpayers in the country. Has not the time come to have a full public inquiry to discover whether there is a common thread?

    Mr. Newton : As I have already indicated, in the first instance inquiries into allegations of the sort that have been made against a number of authorities–by and large, Labour authorities, as my hon. Friend has said–are matters for the Audit Commission and the police. Were a common strand to emerge, I should expect the concern to be reflected on the Opposition Front Bench, and not just on the Government Front Bench.

     

    Q8. Mr. Mandelson : To ask the Prime Minister if he will list his official engagements for Tuesday 26 January.

    Mr. Newton : I refer the hon. Member to the answer I gave some moments ago.

    Mr. Mandelson : What does the right hon. Gentleman think the behaviour of British Airways towards Virgin Atlantic says about the business ethics of British Airways, and what does he think the failure of anyone at the top of British Airways to resign says about the integrity of that airline’s management?

    Mr. Newton : The hon. Gentleman will be well aware that these matters have been the subject of legal action between Virgin and British Airways. That being the case, it would not be appropriate for me to comment further.

  • PMQT – 12 January 1993

    Below is the text of Prime Minister’s Question Time from 12th January 1993.


    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Olner : To ask the Prime Minister if he will list his official engagements for Tuesday 12 January.

    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. Olner : I thank the Prime Minister for that reply. Many hundreds of skilled workers in my constituency are, unfortunately, out of work at the present time. Quite frankly, they are suffering from the Government’s failure to support employers. Can we look forward in 1993 to no more false dawns but to positive action on jobs so that my constituents and their families can regain some dignity?

    The Prime Minister : We all wish to see recovery–there is no difference between any hon. Members on that subject. We shall get lasting recovery only if we have the right basics. These include low inflation, modest interest rates and the right exchange rate. They are now all in place.

    Mr. Day : Has my right hon. Friend seen reports that the National Union of Teachers is to organise a boycott of tests for 14-year-olds? If those reports are correct, will he condemn such action as disgraceful and highly damaging,

    The Prime Minister : I am certainly prepared to condemn any such call and any such action. I suspect that teachers will be far too sensible to take any such action. Those tests are vital. They are good for children, parents want to see them, teachers need to know how well the children are performing, and parents have a right to know how well their children are performing. Those tests will provide that information.

    Mr. John Smith : Since the wrecking of the Braer is a major environmental disaster and one which could happen again before the inquiries that were announced yesterday have been completed, will the Prime Minister take interim action now to protect our coastlines? Will he convene an urgent meeting with the oil companies to obtain an assurance from them that only the safest routes will be used for the transport of oil while the inquiries are going on? Will he also agree to proposals that have been made to make adequate radar facilities available in sensitive areas so that the continuing traffic in oil can be monitored while the inquiries proceed?

    The Prime Minister : I will certainly invite my right hon. and learned Friend the Secretary of State for the Environment to examine those matters. They may have many ramifications and I think that I should have them examined before I give the right hon. and learned Gentleman a concrete answer.

    Mr. John Smith : I at least welcome the Prime Minister’s decision to refer this to his right hon. and learned Friend, but I ask him to engage himself in this important matter. Will he bear in mind that it is frequently the case in matters of aviation that interim action, such as the grounding of aircraft, may be taken while inquiries are being undertaken? Will he bear in mind the acute anxiety that exists in areas all round the coast at what has happened in the Shetlands? May I invite him to look into it personally and to make an early report to the House?

    The Prime Minister : That may well be. As I indicated to the right hon. and learned Gentleman a moment ago, it is prudent to examine a matter carefully before making a commitment. [Interruption.] Were I to make a commitment without doing so, the right hon. and learned Gentleman would be right to be critical. Of course my right hon. and learned Friend will examine it carefully ; he will report to me and we shall report to the House.

    Mr. Nigel Evans : Does my right hon. Friend agree with me that private sector skills have greatly benefited industries such as Rover cars, gas, electricity and British Telecom, following policies which the Opposition have opposed at every turn? Will he confirm to the House today that soon these same private sector skills will be made available to British Rail?

    The Prime Minister : I can certainly offer that assurance, and no doubt my right hon. Friend the Secretary of State for Transport will give further details later this afternoon.

     

    Q2. Mr. Ronnie Campbell : To ask the Prime Minister if he will list his official engagements for Tuesday 12 January.

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

    Mr. Ronnie Campbell : Is the Prime Minister aware that Swan Hunter shipbuilding on the Tyne is now on the verge of complete closure, with the loss of 2,000 jobs and disaster for the north-east? Can he therefore confirm that the new helicopter carrier is still in the programme to be built on the Tyne?

    The Prime Minister : We have received tenders and we are considering them at the present time.

    Mr. Dykes : If my right hon. Friend has time to think about it today, will he agree that legitimate attempts to protect the privacy of prominent and other citizens alike should not be used as an excuse to launch a fundamental attack on the freedom of the press, which is so vital to a thriving democracy?

    The Prime Minister : The Government have now received the report of Sir David Calcutt and we shall publish it shortly. The whole House will then have an opportunity to make up its mind on the contents of the report.

    Mr. Ashdown : In view of the grave news of the breakdown of the Geneva talks as a result of Bosnian Serb intransigence, will the Prime Minister now confirm that the British Government are prepared to act with others to protect against the future elimination of the Muslim homeland, to maintain the isolation of the Bosnian Serbs and to increase the pressure, political and military, to force the Bosnian Serbs to return to the peace table?

    The Prime Minister : I share the right hon. Gentleman’s regret at the breakdown of the discussions in Geneva. I believe that Cyrus Vance and Lord Owen have done an outstanding job. They have put forward a fair plan. It is a matter of great regret that the Bosnian Serbs are unpersuaded and unprepared to accept it. Sooner or later there must be a negotiated settlement ; the only question is whether it comes now or following further repression, further suffering and further difficulties. The international community will wish to apply further pressure if the Bosnian Serbs continue to reject this settlement.

    Mr. Mark Robinson : Does my right hon. Friend agree with me on the important role that small and medium-sized businesses will have to play in economic recovery? Will he undertake to sweep away the unnecessary layers of red tape and bureaucracy which so tie down some of our small businesses?

    The Prime Minister : I have indicated that it is certainly the Government’s intention to do so. We have already made good progress since the election, but I now want us to go both further and faster. I have therefore asked every Department in Whitehall to prepare plans for action on deregulation. I shall be meeting every Secretary of State in early February, with their permanent secretaries, and I hope that we can then draw up a detailed plan for deregulation of burdens on business.

     

    Homelessness

    Q3. Mr. Corbyn : To ask the Prime Minister, when he next expects to meet representatives of London’s homeless.

    The Prime Minister : I have no plans to do so, but my hon. Friend the Minister for Housing meets representatives regularly.

    Mr. Corbyn : Is it not about time the Prime Minister met representatives of London’s homeless to learn that 40,000 families–about 100,000 people–spent Christmas in temporary accommodation, a 10 per cent. increase on a year ago, that there are 50,000 single homeless in London and more than 2,000 sleeping on the streets, a 10 per cent. increase on a year ago and a fivefold increase on five years ago? Is it not about time money was provided to local authorities to buy and build so that families can grow up in decent accommodation rather than suffering the indignity of bed and breakfast accommodation, and public resources were put where they are needed to provide decent homes for the people of this city rather than building empty office blocks for speculative gain?

    The Prime Minister : The hon. Gentleman neglected to mention the number of empty houses either in his own local authority’s stock or in that of many local authorities. Liverpool, Hackney, Burnley, Manchester, Salford and North Tyneside all have a very bad record on empty properties.

    When my hon. Friend the Minister for Housing or I next meet representatives of the homeless we shall be able to tell them that recent figures show a continuing decline in the number of families in bed and breakfast accommodation, nationally by 23 per cent. and by 30 per cent. in London and the south-east. I shall be able to remind them of the £750 million housing package announced by my right hon. Friend the Chancellor of the Exchequer in the autumn statement. That will further reduce the numbers in bed and breakfast. I might also remind them of the £100 million scheme for sleeping rough which has been amazingly successful.

     

    Engagements

    Q4. Mr. Riddick : To ask the Prime Minister if he will list his official engagements for Tuesday 12 January.

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

    Mr. Riddick : Does my right hon. Friend agree that one of the things that the British people expect from the Conservative Government is tough action on law and order [Interruption.]

    Madam Speaker : Order. The House must come to order.

    Mr. Riddick : Does the Prime Minister share my concern about the increasing problem of persistent young offenders carrying out crimes such as car crime, burglaries and joy riding? Will he confirm that the Government will take tough action to combat those problems–unlike the Labour party, which is soft on crime?

    The Prime Minister : I will take scoffing from the Labour party on law and order when they begin to support the prevention of terrorism Acts– [Interruption.]

    Madam Speaker : The House must come to order to hear what the Prime Minister has to say–[Interruption.] All parts of the House, for that matter.

    The Prime Minister : On the assumption that Members of the House did not hear what I said a moment ago, I shall repeat it for their benefit. I will take words from the Opposition on law and order when they stop opposing the prevention of terrorism Acts.

    I certainly agree with my hon. Friend about law and order. I certainly share his concern about the persistent offending of so many young people. I have therefore asked my right hon. and learned Friend the Home Secretary to look urgently at the existing arrangements for dealing with juvenile offenders and to consider what new measures it is sensible to introduce. This is one of the areas of greatest concern in the growth of crime statistics and one with which we are determined to deal.

     

    Q5. Mr. Skinner : To ask the Prime Minister if he will list his official engagements for Tuesday 12 January.

    The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

    Mr. Skinner : Does the Prime Minister agree that the biggest problem facing this country at present is the scourge of mass unemployment? Is he aware that it is costing £9,000 for the taxpayer to finance somebody out of work? That is a total cost of £30 billion out of a public sector borrowing requirement of £37 billion. If the Prime Minister tackled that problem, he would be tackling the economy’s problems as well. He has the fate of 100,000 people in his hands–30,000 of them miners–in the course of the next few weeks. He could resolve the problem easily. If he will give a subsidy of only half that which is given to nuclear power he will be able to save all 31 pits and 100,000 jobs, export coal to every continent in the world and resolve some of the balance of payments problems as well. Will the Prime Minister stop dithering and do it?

    The Prime Minister : I certainly agree with the hon. Gentleman about the scourge of unemployment. The difference between him and me would be the right method with which to deal with it and to ensure that there are long- term jobs subsequently available. I note what he says about the problem of the pits, but I have no intention of anticipating the coal review, which will be brought before the House as speedily as possible. While the hon. Gentleman continues to support policies such as a payroll tax on jobs, the social chapter, and a national minimum wage, he is not in the best position to lecture us about job losses.

     

    Q6. Mr. Nicholls : To ask the Prime Minister if he will list his official engagements for Tuesday 12 January.

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

    Mr. Nicholls : Will my right hon. Friend take time today to consider the wider implications of the rundown or closure of Devonport dockyards? Does he appreciate that the continuing uncertainty is causing unhappiness not just in the city of Plymouth but throughout the west country? I appreciate that he cannot announce a decision today, but will he at least assure the people of Devon and Cornwall that when the time comes for that decision to be made he will have their concerns very much in the forefront of his mind?

    The Prime Minister : I appreciate the great concern in the minds of the people of Devon–and, indeed, of those of near Rosyth–concerning the decisions that need to be taken about the dockyards. I know that that uncertainty is worrying people. The Secretary of State for Defence will announce our proposals as soon as he can. I assure my hon. Friend that there will be no undue delay.

  • PMQT – 15 December 1992

    Below is the text of Prime Minister’s Question Time from 15th December 1992.


    PRIME MINISTER:

     

    Engagements

    Q1. Mrs. Angela Knight : To ask the Prime Minister if he will list his official engagements for Tuesday 15 December.

    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.

    Mrs. Knight : May I tell my right hon. Friend that taxpayers in my constituency– [Interruption.]

    Madam Speaker : Order. The hon. Lady is finding herself in a rowdy House because we expect a question from her.

    Mrs. Knight : May I let my right hon. Friend be aware that taxpayers in my constituency of Erewash and across the country are delighted that he successfully defended the rebate for Britain at the Edinburgh summit? May I also congratulate him–

    Hon. Members : No.

    Madam Speaker : Order. The House should have a little more tolerance. I am sure that the hon. Lady has taken to heart what I have said and will try again.

    Mrs. Knight : Will my right hon. Friend also accept our congratulations on so successfully holding down the increase in the Community budget which was sought by the European Commission and some European leaders?

    The Prime Minister : I can sense that it is a Christmas House today. My hon. Friend is right : it was vital that we defended the rebate, worth £2 billion a year. It is now protected until the end of the century. It was an issue on which our European partners knew that we were not prepared to compromise. It is fortunate that we were not represented by the Labour party. The shadow Chancellor would have negotiated on the rebate, and the Leader of the Opposition would have signed up the complete Delors 2 package, costing us hundreds of millions of pounds.

    Mr. John Smith : In view of the appalling suffering being endured by the inhabitants of Sarajevo and other besieged towns and cities in Bosnia, will the Prime Minister join the French and United States Governments in urging the speedy adoption of the United Nations Security Council resolution to enforce the no-fly zone over Bosnia?

    The Prime Minister : There has been a great deal of comment about enforcing the no-fly zone. The issue is being discussed at the Conference on Security and Co-operation in Europe meeting in Stockholm and it will be discussed further at the London conference in Geneva tomorrow and the North Atlantic Council on Thursday. The imposition of a no-fly zone by the United Nations has already had the effect of stopping combat flights by the Serbs ; so far as we can see, there are still breaches by helicopters and small aircraft, but no clear evidence of their being used for combat purposes.

    We are considering our policy with our allies and partners, but we must weigh the desirability of enforcing the no-fly zone against the possible impact of that on the United Nations humanitarian effort and on the safety of our own troops. If enforcement of the no-fly zone put the United Nations operation at risk, the main losers might well be the people of Bosnia, and we need to consider that carefully before a decision is reached.

    Mr. John Smith : While appreciating the concern that the Prime Minister expresses for the humanitarian efforts, and for the safety of our own troops on the ground, does the right hon. Gentleman not appreciate that there is a growing feeling in this country, as there is in the international community, that there is no point in a no-fly zone which can be defied with such impunity? The time has come for effective international action. I hope that the Prime Minister will take the message from the House that he would be widely supported if Britain supported the other countries in making the resolution effective.

    The Prime Minister : We have never ruled out the possible need to enforce the zone, but, with our allies and partners, we must consider very carefully how the zone is to be enforced and what the effect of enforcement would be on the maintenance of humanitarian effort, which none of us wishes to see end, either this side of Christmas or long after, and on the safety of our troops. Other measures may be brought to bear, and those are all being considered.

     

    Q2. Mr. Anthony Coombs : To ask the Prime Minister if he will list his official engagements for Tuesday 15 December.

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

    Mr. Coombs : Does my right hon. Friend agree that, in addition to the great success of the Edinburgh summit, we have seen a further example of European co-operation–the successful agreement on the development of the European fighter aircraft? Does my right hon. Friend also agree that that aircraft is vital to Britain’s defence interests, and is good news for the defence industry and for the 40, 000 people throughout the country whose jobs are closely associated with the project?

    The Prime Minister : I entirely agree with my hon. Friend. The agreement reached by the four Defence Ministers on 10 December means that the development of a new fighter–to be known as Eurofighter 2000–will go ahead. I warmly congratulate my right hon. and learned Friend the Secretary of State for Defence on his part in ensuring that. The agreement is very good news for our aerospace industry and for everyone who works in it. It will also mean that the Royal Air Force will have a combat aircraft with the capabilities required in the first quarter of the next century.

    Mr. Beith : Can the Prime Minister give miners and their families an assurance that not one of the pits recently closed will be prevented from reopening by failure to maintain them while the review takes place? If the right hon. Gentleman cannot do that, what value can we place on the review?

    The Prime Minister : The right hon. Gentleman can place great value on the review. It is open, and we have made it perfectly clear that it is open. It is clear, too, that British Coal is perfectly aware of the undertaking given by my right hon. Friend the President of the Board of Trade to maintain the pits during the interim period, and I believe that it is doing that.

     

    Milton Keynes (Visit)

    Q3. Mr. Butler : To ask the Prime Minister if he will pay an official visit to Milton Keynes.

    The Prime Minister : I am making plans for a series of visits to all parts of the country, and I hope to include Buckinghamshire among them.

    Mr. Butler : Is my right hon. Friend aware that in the past 12 months the private sector has invested a record £374 million in Milton Keynes, helping to create 6,500 new jobs? Is that not an excellent example of something that we are seeing throughout the country–a fully justified growth in business confidence?

    The Prime Minister : I think that we shall see a good deal more of that in the months to come–not least because of the very good news on inflation, which on Friday fell to 3 per cent. We also had figures today to show that factory gate inflation is at its lowest level for a generation. That is the clearest possible sign that we have yet seen that we are winning the battle against inflation, which is vital to industry, commerce, investment and jobs. It is precisely because of those successes that we now have the lowest interest rates in the European Community and a very solid platform for industrial recovery next year.

     

    Engagements

    Q4. Mr. Gareth Wardell : To ask the Prime Minister if he will list his official engagements for Tuesday 15 December.

    The Prime Minister : I refer the hon. Member to the answer that I gave some moments ago.

    Mr. Wardell : As Christmas approaches and we witness the crisis of despair among the homeless not only in London but in cities such as Swansea, will the Prime Minister recognise that his vision of a classless society is rapidly receding and that our failure to embrace a growing underclass is beginning to undermine the very basis of Britain’s being considered a democracy?

    The Prime Minister : The hon. Gentleman may not know that the latest count by voluntary organisations last month found a drop of nearly 60 per cent. in the number of rough sleepers since the Government’s initiative some time ago. The hon. Gentleman appears not to have heard about that initiative : with Government funding of nearly £100 million, it is providing new hostel places in central London and 3,000 more permanent places are being provided or planned. More action is being taken to help the homeless now than has been taken for many years.

    Mr. Trend : Will my right hon. Friend join me in welcoming the Housing and Urban Development Bill, especially the parts that establish rent-to-mortgage schemes? Does he agree that it will create an excellent low-risk opportunity for young people to begin the process of owning their homes?

    The Prime Minister : I agree with my hon. Friend. We certainly want to continue to expand home ownership for young people and others. [Interruption.] Labour Members heckle, but then they have fought all our reforms of choice and ownership, time after time. They fought the right to buy, and now they are fighting the rent-to-mortgage scheme. The fact is that they do not trust people to make their own decisions about housing. They do not want people to be independent of the state, but we do : we believe in independence, home ownership and low taxation. That is why we are here and they are there.

     

    Q5. Mr. Enright : To ask the Prime Minister if he will list his official engagements for Tuesday 15 December.

    The Prime Minister : I refer the hon. Member to the answer that I gave some moments ago.

    Mr. Enright : Is the Prime Minister aware that his right hon. and noble Friend Baroness Thatcher has been gallivanting through the United States of America, rubbishing Her Majesty’s Government’s presidency of the European Community and making huge sums of money out of it? Will he persuade her to give some of that money to the miners, who have been cruelly deprived–

    Madam Speaker : Order. I hardly think that someone’s travels have much to do with the Prime Minister. I think that we had better move on now.

    Mr. Deva : I welcome the agreement secured by my right hon. Friend in Edinburgh, which will lead to the immediate start of negotiations for the entry into the Community of Austria, Sweden and Finland. Does he agree that the British agenda is now an agenda for the whole of the EC?

    The Prime Minister : I agree : that is increasingly the position. We have achieved a significant turnaround in attitudes to the enlargement of the Community. At Edinburgh we won agreement for the immediate start of negotiations with Austria, Finland and Sweden, and for negotiations with Norway before too long. As my hon. Friend will be aware, we also won support for the eventual membership of the Visegrad countries. When I first proposed that in Paris less than two years ago, very few people supported it ; now it is Community policy.

     

    Nuclear Non-proliferation

    Q6. Mr. Dalyell : To ask the Prime Minister if he will make a statement on the nuclear non-proliferation treaty.

    The Prime Minister : The treaty on the non-proliferation of nuclear weapons, of which the United Kingdom is a depository state, remains the cornerstone of international efforts to prevent nuclear proliferation. Ten states have become parties in 1992, bringing the total to 155. We continue to work for universal adherence to the treaty, and for its indefinite extension in 1995.

    Mr. Dalyell : Can the House have a clear, unambiguous statement– given the contrary views of Mr. John Gordon, who was head of the Foreign Office nuclear energy unit from 1986 to 1988–that at no time did Britain infringe either article 1 or any other article of the 1968 non- proliferation treaty in relation to the sale of arms to Iraq or other countries in the middle east?

    The Prime Minister : It is Government policy to meet all our obligations under the non-proliferation treaty. Allegations that the United Kingdom may not have done so will be matters for Lord Justice Scott, and I think that that had better wait for his inquiry. I am aware of Iraqi claims. They are matters for Lord Justice Scott to investigate.

     

    Engagements

    Q7. Mrs. Jacqui Lait : To ask the Prime Minister if he will list his official engagements for Tuesday 15 December.

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

    Mrs. Lait : Has my right hon. Friend seen today’s reports that 1 million more free eye tests were given in 1991 than in 1990, and that there were 7 million more private tests? Is that not a demonstration of the success of the Health Secretary’s publicity policy on free tests?

    The Prime Minister : Indeed, it is. In this, as in much else to do with the national health service, the Labour party got it wrong in everything that it said at the time. It peddled stories that people would not have eyesight tests, but the reality is now clear : more people than ever before are doing so. They know that there is no purpose in listening to the Labour party on the national health service–it is always wrong.

  • 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 – 22 October 1992

    Below is the text of Prime Minister’s Question Time from 22nd October 1992.


    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Moate : To ask the Prime Minister if he will list his official engagements for Thursday 22 October.

    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. Moate : Will my right hon. Friend join me in welcoming the fact that interest rates are significantly down and that car production figures and even retail sales figures are up? In welcoming the Government’s renewed commitment to economic growth and job creation, may I ask my right hon. Friend to tell the House more about his strategy for recovery– [Interruption.] The Opposition are not interested in recovery–in particular, ways of stimulating new capital investment projects, especially private and public sector joint-funded projects such as the important new Swale project in my constituency?

    The Prime Minister : I had the opportunity of learning about the Swale project when I visited my hon. Friend’s constituency some months ago. I think that everyone will welcome the drop in interest rates and the other economic developments that were mentioned by my hon. Friend. When it is safe to make further reductions without imperilling our inflationary objectives, it would certainly be the Government’s intention to do so. There is no doubt in any part of the House that across Europe and beyond Europe, economic circumstances have darkened and have become more difficult. That circumstance needs to be taken into account in our policy and in the policies of other countries as well. That means that in the months ahead there will be some difficult decisions. There will be tough decisions to be taken in the public expenditure round. It means that we must restrain expenditure where we can, but it also means that we must look with particular care at those elements of expenditure that have an employment and particularly growth potential, which my right hon. Friend the Chancellor will do. We shall certainly look more carefully at ensuring that we seek to get the private sector working more effectively to assist in capital projects, which I believe the whole House will welcome.

     

    Q2. Mr. Heppell : To ask the Prime Minister if he will list his official engagements for Thursday 22 October.

    The Prime Minister : I refer the hon. Gentleman to the answer that I gave a few moments ago.

    Mr. Heppell : Will the Prime Minister give a guarantee that the 10 pits that have been given a 90-day reprieve will be allowed to continue to mine coal during that period? The men want to work. Will he allow them to work?

    The Prime Minister : No, I cannot give a guarantee that during the 90-day period coaling will continue in those 10 pits. It is necessary, and it will be the case, that those pits will be in a condition to resume coaling. If at the end of that period it is determined that that is the decision, they shall do so. But during that period, I can give no guarantee that there will be coaling.

    Mr. Kynoch : Will my right hon. Friend join me in welcoming the tough new rules for GCSE examinations, which will ensure continuing pressure to improve and to achieve higher standards under this Government?

    The Prime Minister : I most certainly will. The requirement to seek higher standards is felt by every pupil, and it is a demand sought by every teacher and every parent. It will certainly be the Government’s policy to bring that about.

    Mr. Hume : As the Member who represents the constituency with the highest unemployment, I ask the Prime Minister to tell the House whether the reports of the Government’s intention to reduce contribution-based unemployment benefit are correct. Does he not believe that the Government would be better employed in applying their mind to reducing unemployment rather than to reducing unemployment benefit?

    The Prime Minister : As I said to the House a moment ago, it is certainly our intention to pursue a strategy that will bring recovery, and with it growth, jobs and prosperity–I am sure that the hon. Gentleman will welcome that. It is essential that that moves right to the centre of thinking in each and every aspect of Government policy in the circumstances that now apply in this country, throughout western Europe and beyond. As I stated clearly a few moments ago, that is the Government’s intention.

    Sir Jim Spicer : In this statement on Tuesday my right hon. Friend stressed the crucial importance of an early completion of the GATT round. Now it seems that the talks have broken down. Can my right hon. Friend give us any idea why that happened, and will he do all that he can to get them started again?

    The Prime Minister : I can certainly answer my hon. Friend’s second question in the affirmative. This morning I saw the reported comments of the French Foreign Minister that there will be no serious GATT discussions for several months. Let me make it absolutely clear to the House that I could not disagree more strongly with that view. It is not shared by the British Government as holder of the presidency of the Community, nor by the Commissioner, nor by the majority of member states, which last week at Birmingham authorised the Commission to negotiate for a GATT settlement by the end of this year.

    Over the past two weeks the narrowing of the gap between the Community and the United States has been very welcome. That gap can be bridged. What is needed is for both sides to stay at the negotiating table, and I shall do all that I can to bring that about.

    Mr. John Smith : Given the daily changes in policy which we have all observed this week, what does the Prime Minister have in mind for his next U-turn?

    The Prime Minister : I have to say to the right hon. and learned Gentleman that I think that that question falls rather below the level of events. It was his U-turn on tax policy which helped to lose Labour the election. It sank his predecessor, but the right hon. and learned Gentleman did not resign–he was made the leader.

    Mr. Smith : Does not the Prime Minister realise that following the British Chambers of Commerce report which says that lack of confidence in the Government is causing many of our difficulties, confidence in him is drastically declining among the people of this country? They are not impressed by a Government blown about by events, and which has one simple rule–“A policy a day keeps Back Benchers at bay.”

    The Prime Minister : Only a few months ago all the people of this country had the choice to determine in whom they had confidence, and 14.5 million of them chose the Conservative party. That is why–because of the right hon. and learned Gentleman’s tax policies, and because of a lack of confidence in his party–the right hon. and learned Gentleman is sitting on the Opposition Benches. That is where he will remain, for at least the next four-and-a-half years.

    Mr. Jonathan Evans : Notwithstanding the recent reactions we have heard from China, may I ask my right hon. Friend for his assurance that he will give his unequivocal support to the governor of Hong Kong in his recent announcement, which is good for the people of Hong Kong, good for Britain and entirely in accord with this country’s agreement with the Chinese Government?

    The Prime Minister : I can most certainly give that assurance. The governor’s proposals set out recently in his speeches in Hong Kong received very wide support among all sorts of opinion in Hong Kong, and very wide support in this House and in public opinion in this country. His aim is to make the Hong Kong Government more effective and more accountable, and to broaden democracy in a way that will survive beyond 1997. That is the right future for Hong Kong, and the governor has the complete and total support of the Government and the whole House in that endeavour.

     

    Q3. Mr. Meale : To ask the Prime Minister if he will list his official engagements for Thursday 22 October.

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

    Mr. Meale : To return to the subject of mining, will the Prime Minister give the House a guarantee that while the review period continues in the coal mining industry, he will place a moratorium on manpower and coal development underground? Without that, it is a meaningless exercise and many pits will face mass redundancies and closures. Yes or no?

    The Prime Minister : I think that we have made clear to the hon. Gentleman what happens during the moratorium and the fact that the 21 pits, apart from the 10 where there are special circumstances, will continue in the fashion that was set out clearly yesterday. I cannot and will not give the hon. Gentleman detailed assertions about matters that lie within the day-to-day management responsibility of British Coal.

    Mr. Tracey : My right hon. Friend’s recent words on growth and sound investment are much to be welcomed. May we, as London Members, urge on my right hon. Friend the cause of the completion of the Jubilee line and the benefits that would flow from it?

    The Prime Minister : I know how assiduous my hon. Friend is in the interests of London. I have noted most carefully what he said.

     

    Q4. Mr. Wareing : To ask the Prime Minister if he will list his official engagements for Thursday 22 October.

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

    Mr. Wareing : It has been widely suggested that the Prime Minister, the Chancellor of the Exchequer and the President of the Board of Trade should resign. Will the Prime Minister tell the House what are his qualities and those of his colleagues which could justify their continuance in office?

    The Prime Minister : The 14.5 million votes we got in the general election.

    Mr. Barry Porter : I had the opportunity this morning of speaking on the electronic telephonic device to Sir Anthony Beaumont-Dark, who had one or two ideas. He seemed to think that it was not a bad idea to reduce interest rates in a gentle sort of fashion, taking into account what the deutschmark is doing, and that we should keep up a reasonable semblance of public expenditure in capital terms. I thought to myself at the time, “That is not a bad idea”. Does the Prime Minister agree?

    The Prime Minister : I am sure that my hon. Friend will not be at all surprised to know that Sir Anthony has mentioned those matters to me as well.

     

    Q5. Mr. Nigel Jones : To ask the Prime Minister if he will list his official engagements for Thursday 22 October.

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

    Mr. Jones : When the people of Cheltenham march, should not the Prime Minister ask himself what is going on? Does he not realise that they are angry about the way in which the economy is being run? The Prime Minister and his office say that there has been a change in economic policy; the Treasury says that there has not. Who is telling us the truth?

    The Prime Minister : The Government always listen when people make comments of that sort and it was perfectly clear to the House from what I said a few moments ago precisely what objectives the Government have set themselves. Lest there be any doubt in the hon. Gentleman’s mind, let me say that there has been no movement away from the inflation objective or from the belief that we need non-inflationary growth. There is no doubt, not even in the hon. Gentleman’s mind, that outside this country as well as inside this country, there is a changed economic environment. In that changed economic environment, we have to consider what is in the interests of this country and shape our policies accordingly. That is what we have decided to do. That is the policy that we will continue with.

    Mr. Hunter : In the light of the IRA’s intensifying campaign of violence in several parts of the United Kingdom, is my right hon. Friend satisfied that sufficient powers and resources are available to those combating terrorism? Will he make it a priority to give fresh consideration to those matters?

    The Prime Minister : We have always given very great priority to the fight against terrorism in Northern Ireland where the security forces face terrorism on a day-to-day basis and on the mainland where, increasingly in recent months, the terrorists have sought to intimidate with bombs. I must make the point to the terrorists again which will carry universal support in the House : they have no chance whatsoever of succeeding–not now, not tomorrow, not ever.

     

    Q6. Mr. Grocott : To ask the Prime Minister if he will list his official engagements for Thursday 22 October.

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

    Mr. Grocott : Does the Prime Minister remember that at the time of the Tory leadership election the reason given for why he beat his two rivals was that he was the one who was the particularly good economist? Will he therefore help the House and tell us whether the Government are pursuing the old economic policy or a new one? Will it be promoted by the old Chancellor or a new one?

    The Prime Minister : The hon. Gentleman clearly is not listening. He spends too much time reading in the newspapers about what might have been said two years ago.

  • PMQT – 20 October 1992

    Below is the text of Prime Minister’s Question Time from 20th October 1992.


    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Jacques Arnold : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

    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. Arnold : Bearing in mind my right hon. Friend’s commitment to putting Britain first, will he confirm that the Government attach priority to getting this country out of recession and creating jobs?

    The Prime Minister : All across Europe and beyond, economic circumstances are very difficult and in recent months have worsened noticeably in a number of countries. We are seeking the right policies to bring back not just recovery to this country but recovery with low inflation. The interest rate reductions that we have been able to make and the increasing competitiveness of the exchange rate will enable us to lead this country back to recovery with the low inflation and sustained growth that we need.

    Mr. Bell : In the light of the statements made by the president of the Bundesbank and by the chairman of the Italian central bank that a general realignment was available to the British Government prior to Black Wednesday, will the Prime Minister answer the question that his Chancellor of the Exchequer failed to answer when he appeared before the Treasury and Civil Service Select Committee or at the Dispatch Box? Was there or was there not a general realignment–either formal or informal–on the table?

    The Prime Minister : I am happy to answer that categorically. No, there was not–formal or informal.

     

    Q2. Mr. Adley : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

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

    Mr. Adley : Referring to matters that are in the minds of right hon. and hon. Members, does my right hon. Friend accept that there is some linkage between electricity privatisation and the current problems in the coal industry? This morning I heard from British Rail that if the proposed mine closures go through, British Rail will face a bill in excess of £200 million in terms of lost revenue and redundancy payments. Will my right hon. Friend please give a clear assurance that if there are to be any further privatisations, either of industry or of the nation’s transport infrastructure, a full cost-benefit analysis will be provided to the House so that it may assess the full national implications?

    The Prime Minister : Many of the problems faced by the coal industry — those that it faces at present and those that it has faced over many years–preceded privatisation. They have far more to do with the demand for coal and the changing energy market in this country. It is for that reason that there has been a severe contraction of the coal industry, not only in this country but in France, Belgium and Germany, and elsewhere.

    As for my hon. Friend’s specific question about the railways, the White Paper published in July was preceded by a great deal of thought, discussion and consultation inside government, and consultation continues on all matters.

    Mr. Ashdown : Having been found out seeking to close down the coal industry quickly by rigging the market, are not the Government now asking to be allowed to close down the coal industry slowly by rigging a review? Is that not the proposition that their Back Benchers are being asked to swallow?

    The Prime Minister : No, that is not an accurate reflection of the policy that the Government are following–as yesterday’s statement by my right hon. Friend the President of the Board of Trade made perfectly clear. No one doubts, and no one has disputed, that over many years, under all Governments, there has been a continuing and severe contraction of the coal industry, owing to factors that were unavoidable.

    The Government now face the fact that, even at existing coal prices–which we are now aware will be noticeably lower in future–the market is contracting, and coal stocks are growing daily. The Government cannot ignore that problem. The sooner they deal with it, the sooner we shall be able comprehensively to establish assistance measures that will provide alternative employment and alternative security in areas where people know that existing jobs have at best only a limited life.

     

    Q3. Dr. Spink : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

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

    Dr. Spink : Will the Prime Minister join me in welcoming the 1 per cent. cut in interest rates that was made on Friday, which will do so much to help all the people who have to repay mortgages and to help businesses, large and small? Does he agree that the key to resolving our unemployment difficulties and taking us out of the teeth of the world recession is low inflation, which we are achieving?

    The Prime Minister : We have now achieved low inflation in terms of both the retail prices index and the underlying inflation rate, at a level that we have not seen for many years. It is undoubtedly helpful to British industry that it has been possible to reduce interest rates to 8 per cent. I was particularly pleased by the consequential mortgage rate reductions that were announced today.

    As my hon. Friend suggested, however, we must bear it in mind that it is not simply a question of low interest rates. It is also vitally important for our future prosperity to restrain any reinflationary surge that may follow. My right hon. Friend the Chancellor of the Exchequer has made it clear that keeping inflation low–one of the essential ingredients for the sustained encouragement of jobs, prosperity and growth–remains central to the Government’s policy.

    Mr. John Smith : It is crystal clear that, whatever else he did yesterday, the President of the Board of Trade did not announce a review of the pit closure programme. Will the Prime Minister now agree to establish a genuine and independent review before any pit is closed for ever?

    The Prime Minister : So that there is no dispute or misunderstanding anywhere in the House, let me make clear the position of the 10 pits identified by my right hon. Friend, and that of the others that he mentioned in his statement. In our judgment, the 10 pits that he specifically named have no sustainable economic future, but the full statutory review procedure will take place. I have no doubt that, during the moratorium on the other pits, the Select Committee on Trade and Industry will wish to hold its own inquiry, and the Government will give that their fullest co-operation.

    During the moratorium, the President of the Board of Trade will himself take views and evidence to consider alongside the information already available to him on all matters. In due course he will publish that material, in time for consideration by the House and before any future debate in the House. His statement will be set in the context of the Government’s energy policy and will set out the consequences of that policy for British Coal, the implications for individual pits and the employment prospects for the industry. It is after that debate that future decisions will be made.

    Mr. Smith : I remind the Prime Minister of the question that I asked him, which was whether he would establish a genuine and independent review. If the Prime Minister really believes that he has a strong case, what has he to lose from an independent inquiry? What is he afraid of?

    The Prime Minister : Let me refer the right hon. and learned Gentleman to the answer that I gave. When we have completed the consultation and the examination–which, I repeat, will be made public and which, I repeat, will also be laid before this House–there will be every opportunity for every view to be taken into account before matters proceed.

    Mr. Smith : Is it not now clear that the only satisfactory alternative to constantly shifting statements from the Prime Minister and the President of the Board of Trade, and to the unseemly Dutch auction which is going on among Conservative Back Benchers, is for this House tomorrow night to vote to refer the whole matter to our own Select Committee and for that to be the responsibility of Members in all parts of the House?

    The Prime Minister : It is clear that the right hon. and learned Gentleman was not listening, for I said that it was an assumption of the Government that the Select Committee on Trade and Industry would wish to consider this matter and that we would provide whatever evidence was necessary to the Committee. Notwithstanding the tremendous emotions that have arisen about this whole affair, it is bogus of the right hon. and learned Gentleman not to recall the vast number of mines that were closed by the Labour Government, the large number of miners who were put out of work by his Government and the activities of his Government in recent years that played a significant part in reducing employment in the mining industry from 700,000 down to the present level.

    Sir Patrick McNair-Wilson : Is my right hon. Friend aware that the concern that is being expressed about the closure programme is very much bound up with the wider concern about the direction of our economy, post-ERM? Does he not agree that with a low value for sterling it really is essential that we have a policy of import substitution, of “Buy British”, and that we should not build gas-fired power stations when we have already got 50 per cent. too much gas generating capacity? If my right hon. Friend were to put those facts into the review, he would find that he had the enthusiastic support of people like myself, who are deeply concerned about what is being proposed.

    The Prime Minister : I agree entirely with my hon. Friend that the changing level of the exchange rate offers the most remarkable opportunities for British exporters and also offers a better incentive for import substitution than we have seen for many years. My hon. Friend also needs to remember that we are by instinct a trading nation and that we must bear that in mind in all the policies that we follow. As I made clear a few moments ago, what the Government are seeking to do and will continue to do in the period up to and including the public expenditure round is to look at the difficulties that this economy faces and at the right possibilities and the right policies, in order to build on present economic circumstances a proper level of growth for the British economy and for British industry.

     

    Q4. Mr. Andrew Smith : To ask the Prime Minister if he will list his official engagements for Tuesday 20 October.

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

    Mr. Smith : Can the Prime Minister understand that it is my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) who has spoken for Britain? Can the Prime Minister name one independent expert who is prepared to say that gas will produce cheaper electricity than coal? The President of the Board of Trade could not name one yesterday. Can the Prime Minister name one this afternoon–yes or no?

    The Prime Minister : If that were not the case, perhaps the hon. Gentleman could explain to the House why the demand for gas among consumers across the country is rising dramatically and shows signs of rising even further.

    Mr. Rathbone : Despite all the difficulties being faced at this moment by this country and by other countries, will the Prime Minister give the House and the nation reassurance that we shall continue our efforts to aid countries in the developing world which suffer even greater difficulties than we do?

    The Prime Minister : We have a very proud record indeed in that respect, in terms of the quantum of aid that we provide, in terms of the quality of aid that we provide, and in terms of keeping open markets in this country for the exports of those countries which, in many ways, is the greatest assistance that we can provide to the developing world. In my statement in a few moments on the European Council, I shall also set out some extra help to other countries which face particular needs at present.

  • Mr Major’s speech to 1992 Conservative Party Conference – 9 October 1992

    Below is the text of Mr Major’s speech made to the 1992 Conservative Party Conference on 9th October 1992.


    PRIME MINISTER:

    Well it hasn’t exactly been a dull week has it? What we have seen has been democracy in action. And this Party is stronger and healthier for it.

    Mr President, someone – I forget who it was – said that nothing that’s good is ever easy. I’m beginning to know what they meant. Politics is a rough, tough, unpredictable business – and troubles come in bunches. But you have to keep your nerve. And remember that when you come out of the teeth of the gale you’re tougher, more battle hardened and the weather is better.

    Mr President, in this stormy period, some people seem to have forgotten something rather important. Just six months ago this very day this Conservative Party won the General Election. We did so against all the odds. Everyone said we didn’t have a chance. The opinion polls – and in those days people actually believed them! – they were against us. The pundits were against us. They said history was against us. They all got even more egg on their faces than I did. Because they left something out of their calculations. 14 and a half million British people were with us. We got more votes than ever before in any election in the whole of British history.

    So why was it that those television exit polls were so wrong? Why didn’t the commentators see? Why didn’t the experts see? For that matter, why didn’t the BBC?

    There were two reasons why we won that record level of support. First, it was the principles we all stood for – the principles we stand for still. And second, it was the people who worked for that victory. You. And thousands like you. Who did so much, gave so much, campaigned so hard together. Mr President, there is one lesson we should never forget. When the Conservative Party is united, it is an irresistible political force.

    We Conservatives have great hopes and dreams for our country. But to make them reality we must win the battles we care about. Lift our country back into growth. And, in all we do, create the society we want for our children and the future.

    But before I turn directly to the great decisions that face us, I’d like to say something about someone not with us today – Chris Patten. We planned the Election in the early days of January. We knew we would go into it behind in the polls – and we were confident we’d come out of it ahead. But we knew, too, that for Chris to run the Election and hold Bath would be desperately difficult.

    So it proved. He’s a huge loss, not just to us, but to British politics. It was typical of him to decline a by-election, turn down a peerage, and take one of the toughest jobs in the world – as Governor of Hong Kong.

    Chris, win for Hong Kong, just as you won for us. And when you come back, come and join us. In Government. Because you’ll still be welcome and we’ll still be there.

    Someone else was a tower of strength through that Election. Norman Fowler. He was always at my side. Always there – with everything from beef burgers to wise advice.

    But every time I went out with Norman, something very curious happened. People threw eggs at him. But they kept missing him and hitting me.

    There are moments when great truths become evident. And this was one. A man who could duck so fast so often was clearly the right man for Central Office. Norman – it’s good to have you back.

    But, above all, I must thank someone who is not a politician. Someone to whom my debt is too personal to express fully. She is here today – just as she was on every day of the Election Campaign. I mean of course, Norma.

    Her role was even bigger than you may think. If I hadn’t met her on April 9th 1970, I might never have picked April 9th 1992. All those oceans of ink guessing the election date! Wasted! If only they’d asked Norma!

    Mr President, in all our Conferences there is theatre. You expect to hear us expose our opponent’s policies. Expect none of that today. For Labour and the Liberal Democrats are utterly irrelevant. let us leave them on the sidelines – where they are and where they deserve to be. I intend to address myself to the country, the Conference and the Conservative Party.

    Mr President, debates over our place in Europe have always touched raw nerves – in our Party and in our country. I don’t find that surprising. There are gut issues at stake. Opinions are passionately held. It is right to speak plainly and directly, even if for some it is uncomfortable. People must know exactly what’s at stake. The great dangers for our country and – as Douglas Hurd pointed out so graphically on Tuesday – for our Party if we make the wrong choices. And the right choices can only be based on facts. They can never be built on fears.

    Of course, emotions run high. We saw that from both sides in the great Conference debate earlier this week.

    For many of you, I know, the heart pulls in one direction and the head in another. There is nothing that can stir the heart like the history of this country. It is part of us. Nothing can change that. But it’s a different world now.

    Our families are growing up in a different age. They know we can’t pull up the drawbridge and live in our own private yesterday. They know we live in a world of competition – and we can’t just wish it away. Change isn’t just coming, it’s here. I want Britain to mould that change, to lead that change in our own national interest.

    That’s what I mean by being at the heart of Europe. Not turning a deaf ear to the heartbeat of Britain. But having the courage to stand up and do what we believe to be right.

    Right for British industry, right for British jobs, right for British prosperity.

    During the summer, when I was in Cornwall, a lady came up to speak to me. “Mr Major” she said, “please, please don’t let Britain’s identity be lost in Europe”. She didn’t tell me her name. But she spoke for the anxieties of millions. She spoke for this country. She spoke for me.

    So let me tell this Conference what I told that lady in Cornwall. I will never – come hell or high water – let our distinctive British identity be lost in a federal Europe.

    Let no-one in this Conference be in any doubt, this Government will not accept a centralised Europe.

    And if there are those who have in mind to haul down the Union Jack and fly high the star-spangled banner of a United States of Europe, I say to them; you misjudge the temper of the British people. And you do not begin to understand the determination of this Prime Minister to put the interests of this country first, now and always.

    Mr President, it’s true, the European Community has centralised too much. It has talked too much about European directives, and thought too little about Europe’s direction.

    But at Maastricht we began to reverse that trend. And at Birmingham and Edinburgh we will carry that further.

    So let me say to the European politicians; if you don’t heed that, you will never build the European Community you want. You will break up the European Community you have.

    You cannot go forward by browbeating Denmark.

    And to those who offer us gratuitous advice, I remind them of what a thousand years of history should tell them, you cannot bully Britain.

    Mr President, I speak as one who believes Britain’s future lies with Europe. But, when I hear assertions from others in Europe, that we or the Danes should sign up on their terms. I’ll tell you what I think. I think they should keep their advice to themselves. Sign up on their terms? Before I was born, if this country hadn’t fought on our terms there’d be no free Europe to sign up to.

    All these are frustrations. They cause great anger. But emotion must not govern policy. At the heart of our policy lies one objective and one only – a cold, clear-eyed calculation of the British national interest. What is right for Britain. What is right for our future. And from that calculation I will not be budged.

    Let me come directly to the issue that has caused such controversy. The Treaty of Maastricht seems to have become enshrouded in myth and legend. Certainly, the Treaty I hear about is not the one I negotiated.

    What are the fears people have about Maastricht? We heard many of them in our debate this week.

    A Single Currency! Under the Maastricht Treaty, Britain is not committed to a single currency.

    Immigration? Immigration policy is specifically excluded under the Maastricht Treaty.

    Jobs and working conditions? I refused to sign up for the Social Chapter.

    Education? The Treaty explicitly rules out any Community interference in what is taught in schools or the way education is run.

    Defence? Defence is kept out of the control of the Community.

    Citizenship? We are British citizens and we will always remain British citizens.

    Conference, if I believed what some people said about the Treaty, I would vote against it. But I don’t. So I’m going to put the real Treaty, the one I negotiated, back to the House of Commons.

    There is one great prize in the Treaty. For the first time we have reached agreement on developing the community in voluntary cooperation between independent nation states. That means outside the Treaty of Rome, outside the jurisdiction of the European Court, outside the competence of the European Commission. We have wanted this principle established for years. And we now have it in the Treaty I signed.

    It is time the distortions were put to one side. It is time to return the debate to reality and away from myth.

    In the Treaty, there was give and take – there has to be in any partnership. But in the end we got what we wanted. Not the agreement our partners signed up to: a better agreement. We obtained for Britain the flexibility and freedom which others signed away.

    When I hear some of the criticisms of the Treaty I think of Don Quixote – you may remember him. He read too many old books and got carried away, fighting imaginary battles. He tilted at windmills in the belief they were giants. He saw things that weren’t there. There has been a lot of that in the current debate on Maastricht.

    Yes, we made concession. But so did our partners. What would they now think of a British Prime Minister who fights a tough negotiation, gives firm undertakings, and then comes back and breaks his word? What would we think of someone who did that to us?

    Who would ever trust Britain again? We would have broken faith. A demeaning position in which no British Government should ever be placed.

    But, far more than that, what is at stake is something practical and hard-headed.

    We wouldn’t just be breaking our word. We would be breaking Britain’s future influence in Europe. We would be ending our hopes of ever building the kind of Europe that we want.

    And we would be doing that, just when across Europe the argument is coming our way. We would be leaving European policy to the French and the Germans. That is not a policy for Great Britain. It would be an historic mistake. And not one your Government will make.

    Let us not forget why we joined the Community. It has given us jobs. New markets. New horizons. Nearly 60% of our trade is now with our partners. It is the single most important factor in attracting a tide of Japanese and American investment to our shores. It is absolutely vital for businesses, big and small – and for our prospects of economic growth.

    There isn’t a single business leader who believes Britain’s interests lie outside. And I hope they will make their views clear – and public.

    But the most far-reaching, the most profound reason for working together in Europe I leave till last. It is peace. The peace and stability of a continent, ravaged by total war twice in this century. Today images of violence and exile are being acted out on the shores of the Adriatic. Where only two years ago the children of a million tourists laughed and played, young men of Europe are locked in a bloody civil war.

    That’s why I want Britain to work in the ’90s for a wider and wiser Community, embracing the new democracies of the East. That is the vision we have for the next generation. And it’s vital for our own security. But it is a vision we will only make real if we’re in there arguing for it, not scowling in the wings.

    Mr President, I’m not starry-eyed about Europe. If I’m starry-eyed, it’s about this country. Britain has always grown and prospered when it has looked outwards – from the time of the First Elizabeth, right through to the Second. Let us then not turn away and put up the shutters – but do what we believe – with faith, and courage and conviction. In the name of the present, and in the name of the future, we cannot sit this one out.

    Some take the view that we must choose between Europe and our friendship with the United States. What total nonsense. Britain is the indissoluble link between the United States and the continent of Europe. We have growing ties of commerce and trade with Europe, but we have blood ties over many generations with our friends in America.

    We in this party will preserve and strengthen our special relationship with America. It is longstanding. Tested in many battles. Reinforced by ties of kinship, language and shared values. Britain and America have stood side by side many times in many theatres of war against tyranny and oppression. On that line we must always take our stand and will, together.

    Eight weeks ago, we decided to send some 2,000 troops to Yugoslavia under the flag of the United Nations. They will bring aid to the victims of that terrible civil war. Without this common effect, we would be seeing in a few months time hundreds of thousands of people – men, women and children in Bosnia – in Europe – dying of starvation, of cold and lack of medicine.

    Britain is already the largest supplier of medicines. And, amidst all the dangers, our RAF Hercules have played a leading part in the airlift into Sarajevo. Those young men know the risks; but they have met them, just as the young men who will keep open the land corridors know the risks and will meet them. We can be proud of them – and we are.

    The safety of these troops will always be first in our minds. They are there for humanitarian reasons. They are not there to hold the combatants apart – and they will not be asked to do so. They are there to fight only in self-defence and then they have authority to use all the force they need.

    We are asking a lot of them. But they know what we know – and what our soldiers in Northern Ireland who stand in the front-line against terrorism also know. There is a duty to be done. I believe it is a duty that this Conference, gathered here in Brighton, would not want Britain, of all nations, to shirk. In these difficult and dangerous tasks they deserve, and will get, this Party’s full support.

    Mr President, I have spoken of our plans for Europe, and our beliefs about Britain’s place in the world. We now have to lead Britain through difficult times at home, as we have done so often in our history.

    You know the things I care about – we all care about – the things I dreamt about as a boy. The chance to get on in life. To acquire knowledge, security, the prospect of a better future – and a life fulfilled. A corner of life that you can call your own. That’s what people struggle for and sacrifice for when they watch their children grow.

    If we’re going to meet those hopes, fulfil those dreams – then we must build a strong economy.

    And looking around the world, we can see even more clearly what makes an economy strong. A Government that secures two things; low inflation and the right climate for business to succeed.

    It is people who create wealth.

    People, not Government. Business, not bureaucracy. Enterprise, not interference.

    But business can’t succeed if Government doesn’t play its part.

    Low taxes – low inflation. Leaving people more of their own money to spend and save. Protecting them from those robber barons of the twentieth century. Inflation and the state.

    I believe – I know – that it was for those tasks that the British people elected us to govern again.

    They didn’t trust anyone else to control inflation. They didn’t trust anyone else with their taxes. They didn’t trust anyone else to keep the state of industry’s back.

    Mr President, we must – and we will – deliver upon that trust.

    But today even the world’s most successful economies face difficulties. In the United States. In Japan. Throughout Europe – yes, and in Germany, too.

    And here in Britain I know how great is the personal hardship that many people are facing. Some have lost their jobs; some their businesses; some their homes. We must pursue policies that will bring hope back into their lives.

    I know how hard people are hit by the misfortune that befalls home after home, family after family, in a recession. Unemployment is a bitter experience. I don’t want a temporary cure. I want a lasting recovery. To come out of this recession safe from the threat of its repetition. If there is one thought that goes through my mind wherever I see this recession Mr President, never again! That’s why we’re looking for long-term solutions. That’s why we’ll take no risks with inflation. And that’s why we will continue to do everything possible to create the prosperity that is the hallmark of a Conservative Government.

    But we must not forget what has been achieved and is essential for lasting recovery.

    Inflation – down from nearly 11% to just over 3.5% in the past two years. And today I can tell you that even the underlying rate – that hard core we have found so difficult to reduce – has come down to 4%.

    Interest rates – down from 15% to 9%. The starting rate of income tax – down from 25% to 20%. Mortgage payments down, on average, 80 pounds a month. All putting more of people’s own money back in their own pockets.

    And, yet, despite that progress, it’s been taking such a long time for things to get going. I know hos frustrating that is. Here as abroad, debt has made people cautious. Slow to spend. That’s made things tough for small businesses. Tough for industry, too.

    That’s what makes British industry’s successes all the more remarkable. Exports – close to record levels. Manufacturing output rising – and productivity at record levels. Investment began to rise in the spring. And even in the High Street, sales have been picking up again.

    It is not enough. It is only a beginning. But now, I believe, we can aim for more.

    With a low inflation rate, we can compete with the best in Europe.

    Let’s not forget how we managed to bring inflation down and the man who did it – Norman Lamont. As he reminded us yesterday, for nearly two years it was the discipline of the ERM that helped us do so. But last month, we faced turmoil in the markets and rising interest rates across Europe. Germany’s troubles had driven European interest rates so high that the mechanism was no longer the servant of Europe’s prosperity.

    But let us not waste time looking back. We have to deal with the world as it is. Let’s take advantage of our circumstances to win new success for Britain.

    With a lower exchange rate, we have a new competitive edge in Europe. And provided we don’t blunt it with inflation, it gives us a real opportunity, in a single European market of 330 million people.

    A market for British computers. British cars. British televisions. British textiles. British services. British skills. The biggest free trade area in the world.

    That’s the market in which British enterprise must succeed. And the Government will back British business all the way.

    Let us return to that old and vivid slogan: British means business. And let me say a little more about what I believe Government can do to make it true.

    First, low inflation. Down to the point where it no longer interferes with the decisions people and businesses have to make in their daily lives.

    Second, we must create an economic environment in which more people are willing to invest their effort, their savings, their skills in new businesses because of the rewards that exist.

    Those who risk their savings should know that if they build up wealth by their efforts, they will be able to keep more of it. What families have worked a lifetime to create, the taxman should never be allowed to destroy.

    Those who build up new businesses must be confident they won’t be stifled by taxation. And we know what that means for Government – it means standing firm against all those pleas for extra public spending. All so attractive to someone – so disastrous in combination.

    Where more is really needed we will spend more. Our plans allow for that. But more for some programmes may have to mean less – for others. Because we have set our limits – and we will stick to them.

    Mr. President, it’s going to be a tough spending round. All my colleagues know it. But they also know they’ve got to do what business does. Protect the quality – cut the cost. We can keep improving our public services – if the public sector doesn’t pay itself what the taxpayer can’t afford.

    It’s too easy – when spending is under pressure – to forget the long term. To let the burden fall on private industry alone.

    We must work with industry, to see whether the public and private sectors working together can do more to invest in our future. More to improve the infrastructure of this country. I know the problems. But it is time to look afresh at whether we can find new solutions.

    But that’s not enough. We must also see what more we can do to help our exporters win for Britain. In the single market – and in the world trading system.

    We are battling for free trade – and to make sure we take the best advantage of it. I want to see British enterprise succeeding across the globe. Winning contracts. Creating British jobs. Generating our future prosperity.

    And as part of this we must do more to lighten the burden of government regulation. Government should stand behind business – not in its way.

    Mr President, this is a battle we’ve been fighting since 1979. But it’s a battle that is never won. And now is the time to mount a new offensive.

    We’re already on the march against the Eurocrat and his sheaf of directives. But you know, it isn’t just Brussels that rolls out the red tape.

    It’s Whitehall. And town hall. Everyone likes to tie another knot. Admirable intentions – disastrous combinations. Piling costs on industry. Mr President, that must stop.

    It’s not just big business that suffers. Far too often, it is the small firms who really suffer. Small firms – fed up with filling in the forms – who feel that it is just not worth being in business at all.

    Of course, we want to have confidence in the safety of the food we eat, the homes we buy, the place we work in, the people who take charge of our children. But when this reaches the point where you may need 28 separate licences, certificates and registrations just to start a business, then I say again, this sort of thing must stop.

    I have asked Michael Heseltine to take responsibility for cutting through this burgeoning maze of regulations. Who better for hacking back the jungle? Come on, Michael. Out with your club. On with your loin cloth. Swing into them!

    You know, deregulation isn’t just about making life better for business. It’s about making life easier for everybody. Take the bureaucratic controls which mean Whitehall decides whether you have the chance to stop off the motorway. Every parent knows what I mean. Next services, 54 miles – when your children can’t make 10!

    They’ve got to go. And so those rules have got to go!

    Or take the system that keeps air fares far too high. It’s absurd that international air travel is regulated under rules set out before the jet airliner was even invented.

    And why should so many people, from all over Britain, have to come to London when they want to fly abroad? I want to see more flights directly out of Glasgow, Manchester and Birmingham and all our regional airports. That’s better for the people who live there – and better for London too.

    Mr President, it is vital that we get the economy back into strong – and sustainable – growth. We can do it. We must do it. But that is only the first of our ambitions for the course of this Parliament. The manifesto that won the Election set out a full programme for five years. Now we’re going to put it into action.

    Ladies and gentlemen, the year 2000 is less than a hundred months away. That, at any rate, is the latest Treasury forecast. I want Britain’s example, its ingenuity, its decency and principle to be in the forefront as we cross that threshold.

    In all we do we must speak to the instincts of the British people. For 300 years, the Conservative Party has reflected those instincts in a way that no other political party has ever been able to match.

    So let’s go out and tell the people about the things we’ll be working for, and fighting for, in the next four years of Conservative Government.

    We’ll be fighting for better public service.

    For services that put the parents, the patients, and the passengers first. Fighting bloody-minded and petty bureaucracy wherever we find it. That’s what the Citizen’s Charter is about.

    We’ll be fighting for good local Government, closer to local people. That’s why in Wales it’s set to be goodbye to the likes of Clwyd and Gwent and back to Pembrokeshire and Anglesey. In Scotland, the Scottish Secretary will be consulting the public on change – but I rather suspect it could be an Ian Lang farewell to monstrosities like Strathclyde.

    In England we will give everyone the chance to put their views on the future of councils like Cleveland or Avon. I can’t predict the outcome. But can you imagine Len Hutton walking out to bat for Humberside?

    We’ll be fighting for better health and social services.

    For a Health Service run by local people in patients’ interests. For more GP fundholders and more of our successful hospital trusts. We want better care for the elderly and vulnerable in the home and the community – wherever they choose to be. And we must make sure local councils respect the wishes of those who do go into homes. People in their last years are entitled to as much choice and dignity as anyone else. Not less choice and no dignity.

    And Mr President, we have all been deeply shocked at the reports of scandals in some social security departments. It’s terrible when children are involved. That’s why we are going to set up regular independent inspection of social work in every council. We will not let vulnerable people and children be put at risk.

    We’ll be fighting to strengthen the rights of ordinary trade union members.

    They must have freedom to join the union of their choice – and fairness in union ballots and finances.

    And, under the Citizen’s Charter, we’re going to give you – all of you – a new right. To take direct action in the courts against those who disrupt public services through unlawful strikes, and hold the country to ransom.

    And we’ve already blown the whistle on one of the last bastions of the closed shop – student unions. The days in which they march and demonstrate at the taxpayer’s expense are numbered.

    When it comes to education, my critics say I’m old-fashioned. Old-fashioned? Reading and writing? Spelling and sums? Great literature – and standard English grammar? Old fashioned?

    Well, if I’m old-fashioned, well, so be it. So are the vast majority of Britain’s parents. And I have this message for the progressives who are trying to change the exams. English exams should be about literature, not soap opera. And I promise you this. There’ll be no GCSEs in Eldorado – even assuming anyone is still watching it!

    I also want reform of teacher training. Let us return to basic subject teaching, not courses in the theory of education. Primary teachers should learn how to teach children to read, not waste their time on the politics of gender, race and class,

    I don’t know if you feel as I do, but I think it is intolerable that children should spend years in school and then leave them unable to read or add up. It’s a terrible waste of young lives.

    We want high standards, sound learning, diversity and choice in all our schools. But, in some – particularly in those inner cities – Isaac Newton would not have learned to count and Anthony Trollope would never have learned to write.

    We cannot abandon the children in schools like these. And we will not. So if local authorities cannot do the job, then we will give the job to others.

    In the place of the local authority which has failed, new Education Associations will be set up to run and revive these schools. Governments have always shied away from it. But I am not prepared to any longer.

    Yes, it will mean another colossal row with the educational establishment. I look forward to that. It’s a row worth having. A row where we will have the vast majority of parents – and the vast majority of good, committed teachers – squarely on our side. They believe what we believe – that children must come first.

    Mr President, there was a time when Britain was a watchword for good behaviour across the world. I want to restore that good name. People are horrified when they see mindless vandalism; old people attacked by young thugs; drunken louts on the rampage, blackening Britain’s reputation abroad. Not only horrified, they’re ashamed.

    Mr President, to excuse crime may seem understanding. But it’s wrong. Sympathy doesn’t curb crime. If society wants to protect itself it must condemn crime, not condone it. We must create a climate in which people know the difference between right and wrong and yours and mine. We must spell out the truth. Crime wrecks lives, spreads fear, corrupts society. It is the fault of the individual, and no one else.

    We are cracking down hard on crime – particularly violence. And that includes – as I promised last year – tough sentences for those who cause death by dangerous driving or drunken driving. Nothing can excuse those who kill in this way. We are taking action. And I hope the courts will respond.

    There’s another problem we are dealing with – the illegal occupation of land by so called “new-age travellers”.

    You will have seen the pictures on television or in the newspapers; if you live in the West Country and Wales you may have seen it on your doorstep. Farmers powerless. Crops ruined and livestock killed by people who say they commune with nature, but have no respect for it when it belongs to others.

    New age travellers? Not in this age. Not in any age.

    They say that we don’t understand them. Well, I’m sorry – but if rejecting materialism means destroying the property of others; then I don’t understand. If doing your own things means exploiting the social security system and sponging off others, then I don’t want to understand. If alternative values mean a selfish and lawless disregard for others, then I won’t understand. Let others speak for these new age travellers. We will speak for their victims.

    Mr President, the things I care most about are the long term things – stability and security at home and in Europe; rebuilding standards in education; the long-term strength – economic and moral – of our nation. Preserving Britain’s pride and purpose and belief in itself. That’s what I care about. That’s what I stand for.

    Isn’t that what we’re all about together in this Party? That’s what our forebears worked for when they built it, when they sent its roots down deep – right into the very heart and marrow of Britain. That’s why we are all in this Party together – you and I.

    That’s why I fought so hard in the Election to keep our country one. For me that is the highest and greatest of our causes – to defend the unity of the United Kingdom, and all that binds our nation together. For unless we stay united, unless we stand together, as a Party and as a nation, this country will never prevail. There is not a man or a woman in this hall, or listening outside, who doesn’t know in their heart that is true.

    So let’s be confident at home and in Europe. Let’s not turn away and say “It’s all too difficult”. Let’s not hang back because we don’t believe our voice will be heard. Right across Europe, now, in this critical hour, people are looking and listening to us and to what we have to say.

    It won’t always be easy. It won’t always be comfortable. But in all we do, there is one thing I will never forget. This is our country.

    What we do, we do for Britain. What we do, we do for the future of our children and for generation yet unborn. For their prosperity and their security, and never for short term political advantage.

    Let us have faith, and courage, and pride. Britain’s interests will come first – for me, and this Party. First. Last. Always.

  • Mr Major’s Commons Statement Following Ejection from the ERM – 24 September 1992

    Below is the text of Mr Major’s statement to the House of Commons on 24th September 1992 following ejection from the ERM.


    PRIME MINISTER:

    I beg to move,

    That this House expresses its support for the economic policy of Her Majesty’s Government.

    Following the developments in the foreign exchange markets over the past weeks, I thought it right to recall Parliament to debate the present position. The essential conditions for Britain’s economic success are low inflation, low taxes, free trade and freedom from excessive state interference. I am happy to reaffirm those principles today. The Government stand for a low-inflation, low-tax economy–and so, I believe, do the British people. That is why, five months ago, they made their choice and we sit here and the Labour party sits on the Opposition Benches.

    We joined the exchange rate mechanism in 1990 to help to bring down the rate of inflation in this country. British industry supported us in that decision; indeed, it urged us to join believing that, on balance, it would help to stabilise exchange rates, bring down inflation and bring down interest rates from the high British level, which then applied, to the much lower European levels. Of course, during the period of our membership, interest rates fell from 15 to 10 per cent.

    I congratulate industry on its magnificent response in the battle against inflation. I know that it has not been easy, but, against a difficult background, exports have risen to record levels, costs have been controlled and productivity has soared. It was not just industry which supported entry into the ERM–so did commerce, the City, most trade unions, the TUC and the Opposition parties in this House. The Leader of the Opposition, whom I warmly welcome to his new responsibilities, was consistent in his support of the exchange rate mechanism. When we joined it, the right hon. and learned Gentleman supported us, and agreed. When I announced the exchange rate central figure the right hon. and learned Gentleman was generous enough to agree. When, last week, I said that we needed reforms because of the fault lines that had become apparent, the right hon. and learned Gentleman agreed that reform was needed. I congratulate him on his consistency, even though on this issue the House has been not just a debating Chamber but an echo chamber.

    Now, of course, we hear most loudly from those people who were critics of the exchange rate mechanism. They come from all sides and every party. My right hon. Friend Lord Tebbit, I understand, says that the Government were, I think the expression is, “dragged in” by the then Chancellor. Now we all know my right hon. Friend Lord Tebbit. He is an old friend to us all. I admire him as a man of great courage, a fighter, a bruiser. He likes to bite your ankles, even if you are not walking up his pathway. Yet even my right hon. Friend Lord Tebbit lost many battles with my formidable predecessor. Despite this, according to Lord Tebbit, even my formidable predecessor, whose convictions and firmness of purpose are everywhere admired, was somehow dragged into the exchange rate mechanism by her new Chancellor. Ah, yes, I remember it well.

    Since we joined the exchange rate mechanism we have brought inflation, which was rising to 11 per cent., down to nearly 3.5 per cent., and falling. That is an achievement for which my right hon. Friend the Chancellor of the Exchequer deserves to be warmly congratulated, so let me do so and let me say this : I take full responsibility for the actions and policies of my Chancellor. In the exceptional circumstances of last week, we were obliged to suspend our membership of the exchange rate mechanism. In the circumstances, there was no choice. No mechanism could have survived the market’s attack on the scale that occurred last Wednesday. One after another–not just sterling–the currencies of Europe came under fire. We need to see that against the background of events world wide : a referendum in France, whose outcome was in doubt, and great economic difficulties in Germany where interest rate levels were at their highest level for a decade. Those strains were increased by a slowdown across Europe and the falling exchange rate of the dollar. That speculative attack turned first to the lira, which was forced to devalue and subsequently to step outside the exchange rate mechanism.

    It created havoc beyond the exchange rate mechanism–in the Scandinavian countries, where overnight interest rates in Sweden touched 500 per cent. The market, encouraged by injudicious comments about realignment which should never have been made, then turned on sterling. In such circumstances, there could be only one response : to defend the pound with foreign exchange reserves and then to raise interest rates. That is what we did, but the severity of the attack compelled us to leave the mechanism. Other currencies, too, have come under attack and suffered varying degrees of damage. I do not wish to understate the consequences of this event.

    Let me turn first to the exchange rate mechanism itself. I do not see that we could readily return to the mechanism without dealing with the problems that have been thrown up in the past fortnight. These need careful examination and consideration before we can decide whether such a mechanism can be made to work to the benefit of all its members. Some fundamentalists say that it cannot. Other fundamentalists say we should pop straight back in.

    Let me say bluntly to the House that I have no intention of being bound to either course without a proper examination of where future British interests lie. My expectation is that co-operation is a better way, if it can be seen to be adequate, and no one should doubt that we will examine carefully whether a reformed mechanism can be made to work. But I do not believe that we shall be able to go back into the mechanism soon, or into the same mechanism that we left last week. My right hon. Friend the Chancellor of the Exchequer has already made our criticisms very clear to other European Finance Ministers, and I will be doing so at the European summit next month. But inside or outside the exchange rate mechanism, the Government’s economic policy must retain the same objectives. Our ambitions to bring inflation down steadily but surely during the lifetime of this Parliament were spelled out in the last Budget, and that remains our strategy. Thus far, our anti-inflation strategy has succeeded more spectacularly than anyone in the Opposition ever believed possible. Outside the exchange rate mechanism, the conduct of monetary policy cannot, indeed should not, be exactly the same. We must have regard to a range of indicators of monetary conditions to make sure that our objectives on inflation in particular are not at risk. These will include our existing narrow money target, the behaviour of broad money and asset prices and, of course, the exchange rate. Nobody should believe that a floating exchange rate is a free meal, always allowing interest rates to fall to a very low level.

    Mr. Alex Salmond (Banff and Buchan) : The Prime Minister spoke about fault lines in the exchange rate mechanism. When did he first discover them? Did his Chancellor, who we now understand is a long-term sceptic of the ERM, ever inform the Prime Minister of his doubts, and if so, when?

    The Prime Minister : The speculative attack on sterling was of a size and scale that we have not seen for beyond a quarter of a century. I do not believe that any mechanism would have been able to withstand the size and scale of that. But I believe that there are other areas within the exchange rate mechanism where reform could have made it a more credible instrument for use last week. We shall discuss that with our European partners and others.

    Mr. Stuart Bell (Middlesbrough) rose —

    The Prime Minister : I shall give way later.

    Interest rates elsewhere in Europe have been driven up this summer, particularly by the strains in Germany.

    Indeed, in the last 10 days of turbulence in the mechanism, interest rates have risen in Greece, Italy, Sweden and France. In Spain they have not only devalued but have effectively reintroduced exchange controls. Ireland, too, this morning reintroduced exchange controls. Since we stood aside from that turbulence, it has been possible to reduce base rates by a full percentage point this week, and the benefit to business and to home owners will help strengthen economic recovery.

    But interest rates alone will not achieve the non-inflationary growth that we need in this country, and that point needs to be understood. That depends even more crucially on keeping firm control of public expenditure. The Government’s new system of control will allow money to be directed towards priorities, while we keep strictly within the overall limits laid down for the growth of public expenditure as a whole.

    In essence, the Government have set an upper limit to expenditure and will divide resources between priorities in the public expenditure round. That contrasts with the previous system of individual bids that were added up at the end of individual negotiations. It is a fundamentally different system of controlling public expenditure. It is tough and will be tough, but it is necessary and is an important component part of overall economic strategy.

    Mr. Stuart Randall (Kingston upon Hull, West) : Will the Prime Minister give the House some idea of the likely time scale for reforming the exchange rate mechanism? Will it be Christmas or in three of four years’ time?

    The Prime Minister : Reform self-evidently depends on negotiation with all the other members of the mechanism. At this stage, nobody can say how long that will take. As I said a few moments ago, given the turbulence that has existed–not least the money supply figures announced in Germany yesterday–I would not expect our return to any mechanism, and certainly not the same mechanism, to be in the near future. I do not believe that that will be practicable, and I must make that clear.

    Mr. Tony Benn (Chesterfield) : The Prime Minister is speaking as President of the European Council, not just as Prime Minister of Great Britain. He has repeatedly told us that his object is that we should be at the heart of Europe. Will he please explain how allowing speculators to determine our currency, German banks to determine our interest rates and French voters to determine the future of the Maastricht treaty puts this country at the heart of Europe? Is it not clear that the British, like the Danish, Irish and French, are entitled to determine what is essentially a political matter, although in a debate dressed up as an economic debate?

    The Prime Minister : I will turn directly to the question of Britain’s place in Europe in detail in a few moments. On the question of speculation, it is certainly within the memory of the right hon. Gentleman that, whether inside the mechanism or outside, inside the European Community or outside, sterling has been subjected to speculative attacks on many occasions in the past. The exchange rate mechanism offered an extra line of defence, although not a complete defence; as we have seen, and as we have always known, there could be no total and complete defence.

    Sir Teddy Taylor (Southend, East) : To avoid any possible misunderstanding, will the Prime Minister say whether it is the Government’s intention to seek to rejoin a fixed exchange rate system?

    The Prime Minister : I have explained to the House twice that we shall examine whether a system can be made credible. When we have finished that examination, we shall make our decision.

    Mr. Bell : Will the Prime Minister give way?

    The Prime Minister : I will give way to the hon. Gentleman, and then I shall make some progress.

    Mr. Bell : The Prime Minister is announcing what appears to be a very important and significant change of policy : we are moving away from the external discipline of the exchange rate mechanism and the deutschmark as an anchor to our policy of getting inflation down to an internal discipline. Are we still shadowing the deutschmark, and will there be a wages control policy for public sector employees?

    The Prime Minister : I announced to the House–for I think it has a right to know–how we shall conduct economic policy while we are not in the exchange rate mechanism. It is essential that the House is aware of how we shall conduct policy. I have said that we shall examine the practicality of returning to a reformed exchange rate mechanism and make a judgment on whether that is a workable system and then whether to join. We shall certainly undertake those negotiations.

    I turn now–

    Mr. Nicholas Budgen (Wolverhampton, South-West) : Will my right hon. Friend give way?

    Hon. Members : Give way!

    Madam Speaker : Order. The Prime Minister has made it clear that he wants to make a little progress.

    The Prime Minister : I give way to my hon. Friend.

    Mr. Budgen : I am sure that my right hon. Friend will agree that we have been discussing the details and fundamentals of the exchange rate mechanism for very many years in this House. Will he please explain to the House what are the new details that have caught him out so unexpectedly that he requires guidance on them before he can tell the House whether he intends to go back into the mechanism?

    The Prime Minister : My hon. Friend has a long-held view that the right thing to do is to let sterling float. I understand that view, but I must remind him that sterling was floating when, in 1981, interest rates rose by 4 per cent. in less than a month, and that it was under a system of floating exchange rates that interest rates rose to 15 per cent. before we were able to bring them down to 10 per cent. within a co-operative mechanism such as the ERM.

    The Government’s general policy towards Europe must be founded on a concern for our long-term national interests, and I believe that it is time that we turned afresh to face directly the whole question of Europe and our place in the European Community.

    There are broadly three schools of thought about our membership of the Community. The first–it is spread thinly across each political party–is that we should leave the Community; that we should never have joined. It is a minority view, often disguised by rhetoric affirming support for the principles of membership while actions speak the opposite. There are people who, in their hearts, would prefer it if we were not in the Community, who trade under false colours and who do not address their arguments to the implications of non-membership for jobs, prosperity and the future.

    The second school of thought is that European development is inevitable and goes inexorably in one direction : that sooner or later a centralised Europe is inevitable. Those who take that view are often the direct descendants of those who, 20 years ago, thought that socialism was inevitable, before it became completely discredited around the world.

    I do not share the belief in the desirability or inevitability of a centralised Europe. Each country in the Community at times of crisis will inevitably look first to its own national interest; each will pool some of it in the common interest, but none will sacrifice it. Just as the interests of France and Germany will always come first for them, so the interests of Britain must always come first for us. I understand the fears about a centralised Europe, but I think that they are fanciful, for we will not have one.

    The third school of thought, the one for which I stand, is quite different. It is that it is in the interests of Britain–our interests, our objectives and our prosperity–for us to be part of the development of our continent. By part, I do not mean a walk-on part; I do not mean simply being a member. I mean playing a leading role in the European Community. I mean helping to determine the direction of policy, building the policies that we want and fighting those that we do not want. We will need to compromise on some matters, but so will every national state in Europe unless we return to tribalism right across the European Community.

    This co-operation in Europe demands a wider Europe. It demands the entry of the Scandinavians and the Austrians and, over time, of the east Europeans– those newly democratic states which have every right to look to the Community and the west for a more secure future. This co-operation also requires us to deal with the concerns about the internal development of the European Community. Those concerns exist not only in this country but in every country of the Community. There are fears throughout Europe that the Community is too centralised, that it is too undemocratic and that the leaders of the Community are seeking to develop it too fast for their national Parliaments and people. The events of recent months have shown that, if Europe is to be built on a sound foundation, we cannot ignore those feelings or brush them aside as a matter of no concern. The good European does not ignore those fears. He seeks to put them right–and that is the policy we pursued up to Maastricht, during Maastricht and after Maastricht.

    The Maastricht treaty has become a totem around which those in favour of Europe and those opposed to Europe are now dancing. In truth, it is less important than the pro-Europeans claim and in no way as far-reaching as the sceptics tell us. Many of the things for which the Maastricht treaty has been criticised spring inexorably from the treaty of Rome or the Single European Act.

    One of the main criticisms of the Maastricht treaty is the move towards a single currency. The House will recall that I declined to accept that move in the negotiations because I did not believe that Europe would reach the right economic conditions to support a single currency. I have never believed–I have stated it frequently–that Europe would reach the right convergence by the mid-1990s. That is why I refused to commit Britain to a single currency.

    In the light of the continuing economic problems throughout Europe and of the currency turmoil of the past week, I must say that I was right and– [Interruption.]

    Mr. William Cash (Stafford) rose–[Interruption.]

    Madam Speaker : Order. A great many of our fellow citizens were keen that the House should be recalled, and they want to hear what the House has to say–as, I believe, do people thousands of miles away. Let us give each and every one of us a proper hearing. The Prime Minister knows exactly who is standing behind him. If he wants to give way, he will do so.

    The Prime Minister : I must tell those who have exaggerated ambitions for a single currency that it must now be an ambition postponed. In the Maastricht treaty, we safeguarded our national interest on the single currency. Elsewhere in the treaty, we secured other very important gains for Britain. I remind the House that, early in their presidency, the Dutch presented proposals on foreign policy, defence policy, immigration and justice–all of which would have been undertaken under the treaty of Rome. We rejected that. At Maastricht, we secured provision for co-operation between nation states outside the treaty of Rome, outside the power of initiative of the Commission and outside the jurisdiction of the European Court. Those who claim that Maastricht was a treaty too far should ask themselves, “What was the situation before the Maastricht treaty?” Another important achievement was the provision restricting the scope for Community action. That provision was put in at our insistence. It reflected our long-standing argument that the Community should take action only where it could do so more effectively than a nation state or more than one member state co-operating voluntarily. We had to fight hard for that provision with the support of some other countries–notably Germany–but it was a break point and we won it. It has since found an echo in public opinion in Denmark, France and right across the Community. Although the Danish people narrowly voted against the Maastricht treaty, the Danish Government have made it clear that that is not necessarily the last word. The Danish Government plan a further referendum.

    Mr. D. N. Campbell-Savours (Workington) : Will the Prime Minister give way?

    The Prime Minister : I will make some more progress.

    If, however, the Danes were unable to go back to the people, or were to lose again in that further referendum, the Maastricht treaty could not proceed. It would not be acceptable for the 11 to go ahead without Denmark, and against the will of the Danish Government and people. That cannot happen, and it will not happen.

    The Danish Government will publish a White Paper next month, at the start of a process of consultation. It would not make sense to bring the Maastricht Bill back to the House of Commons before we know clearly what Danish intentions are, and when and how the Danes propose to consult their people again. When those things are known, however, we must examine the Bill further.

    Those who assume that the Bill is dead have overlooked two things. First, there is much in it that we want; secondly, with the consent of this House of Commons, I agreed that Bill. I do not believe that it would be proper for a British Prime Minister to agree a treaty, and then come back to the House of Commons and disown it. In this country, people know that it is in our interests to be in Europe, but they fear that the Community seeks to intervene too intrusively in our national life. They fear that things that have always been dealt with by individual nation states–and should be dealt with by individual nation states–are instead gradually being drawn within the control of the Community. So we need a definition–a settled order–of what is for national action and what is for Community action. We need clear criteria by which Community proposals will be judged. When we are satisfied that such a system has been put in place, and when we are clear that the Danes have a basis on which they can put the treaty back to their electorate, we shall bring the Maastricht Bill back to the House of Commons.

    Mr. Campbell-Savours : If the French, the Germans and the Benelux countries decide to forge ahead with a Community based on greater monetary and political co-operation, will the Prime Minister be prepared in any conditions to leave Britain outside that in the Community?

    The Prime Minister : There might well be circumstances in which others would make decisions that they believed to be in their national interests; but I have said repeatedly, and agreed under the Maastricht treaty, that any question of a single currency must be determined by the House of Commons at the time when others go ahead, and I stick to that view.

    Mr. John Wilkinson (Ruislip-Northwood) : Is my right hon. Friend really telling the House that–notwithstanding the fact that two thirds of the French people did not vote in favour of the ratification of the Maastricht treaty; notwithstanding the fact that, when the question was first put to them, the Danes voted against it; and notwithstanding the fact that my right hon. Friend will not grant the British people a referendum–the House is somehow to proceed with this extraordinary process?

    The Prime Minister : We are a parliamentary democracy, and the House is the place in which to consider the Bill–line by line and clause by clause. Other nations may have a tradition of referendums : they may call a referendum, followed by a debate on the whole Bill lasting one or two days, and approve every part of the Bill immediately. That is not our parliamentary tradition, and I do not believe that it would be acceptable to the House of Commons. As for the second part of my hon. Friend’s question, I have made it clear–and I repeat again–that, when the conditions that I have set out are fulfilled–when we have moved forward on subsidiarity, and when the Danes have decided how they will proceed–I will bring back to the House the treaty that I negotiated with the approval of the House : the treaty that was approved at the general election, and on Second Reading some time ago.

    Let me repeat that, when we are satisfied that a settled order has been put in place, we will bring the Bill back to the House. That is one of the matters that are to be put in hand at the special meeting of the European Council on Friday 16 October.

    Mr. Michael Spicer (Worcestershire, South) : I am most grateful to my right hon. Friend for giving way. He has expressed the view that the House should take the final decision on the Maastricht Bill. Therefore, will he give consideration to allowing a free vote in the House?

    The Prime Minister : I believe that my hon. Friend stood at the general election supporting the Conservative manifesto, which indicated that we would bring the Bill before the House. I still support the commitment that I had in that regard in the manifesto. I said that that was one of the matters to be put in hand at the special meeting of the European Council on Friday 16 October. That special meeting will take place at the international conference centre in Birmingham.

    That European Council needs to respond to the concerns that people right across Europe have shown about the direction of Community policy, to review what is wrong with the exchange rate mechanism and how the system can be made to work better in future, to consider preparatory work to meet Denmark’s concerns and, of course, to give a further impetus to the general agreement on tariffs and trade round. During recent months, our concerns about the Community have been mirrored across Europe. The British agenda is now on the table in every country of the Community.

    It is worth reminding ourselves why the Community was built and why we joined it. Its founders wanted lasting peace in western Europe, and they achieved it. But they wanted something more [Interruption.] Yes, what about the economy? The founders wanted to build up economic prospects across Europe on a scale that no previous generation had seen, and they achieved that. They wanted the prosperity of each generation to exceed that of its parents, so that the chances for each generation would be greater and the opportunities more fulfilling. Collectively in Europe, that is what we have achieved, despite the difficulties that presently exist.

    Mr. Jimmy Boyce (Rotherham) : On a point of order, Madam Speaker. Given that the debate’s title is the United Kingdom’s economic policy, could you tell us when the Prime Minister is going to get round to discussing that policy?

    Madam Speaker : As I have not seen the Prime Minister’s speech, I can only say that the hon. Member for Rotherham (Mr. Boyce) must give the Prime Minister the opportunity to reach that point.

    The Prime Minister : Clearly, the hon. Member for Rotherham (Mr. Boyce) does not realise the extent to which our economic well-being depends on our relationship and trade with Europe.

    I have never seen our future as being a sour, isolated country off the mainland of continental Europe. That surely cannot be a way for us. Even though some will swallow hard at compromises that may need to be made, they should remember that others in Europe will need to compromise as well. The voice that is raised to say that we should look after only our own interests is the voice of narrow self-interest. Such a voice always has resonance in politics and is almost always wrong. It is a policy more certain to begin with cheers and end in tears than any other policy that has been devised.

    I have never understood why some are so fearful of our prospects in Europe–neither do I understand why those who are often most fearful are those who would claim to be most proud to be British. Why, then, with that pride do they assume that we will always lose the arguments in Europe when that has not been the Community’s history and will not be the Community’s future?

    We have the chance to build in our time, in our generation, the sort of Europe for which we have always longed; the sort of Europe that I believe its citizens want; a secure Europe of nation states co-operating freely for the common good; a prosperous Europe, generating new wealth within the biggest free trade area in the world; a free trade Europe in which Brussels is kept off industry’s back. Only one Government–this Government- -offer industry freedom from state control. Only our policies of low taxation and low inflation will allow the genius of British enterprise to flourish, and only this Government’s policies will secure for the British people the prosperity that they deserve in the ’90s and which this Government will deliver. I commend the motion to the House.

  • 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].