Tag: Inflation

Below is the text of Mr Major’s speech made to the 1991 Scottish Conservative Party Conference on 10th May 1991 in Perth.

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PRIME MINISTER:

It’s wonderful to be back in Scotland for my fourth visit since I became prime minister. And each time I come I am struck by the growing confidence of our party. We are right to be confident. So is Scotland. There are five Scots in my Cabinet shaping policy – for all the UK, with my old friend Ian Lang making sure the Scottish dimension is always considered.

He has a powerful team at the Scottish Office. Allen Stewart once defeated me by one vote for a local council candidacy over twenty years ago. I often wonder what would have happened if I had won.

And in the party machine, Russell Sanderson and Micky Hirst are revolutionising our prospects as we look forward to Conservative gains at the next election.

Today I want to share with you some important news – of a new White Paper we will be publishing to improve public service, of help for a hard pressed region of Scotland, of our initiative to tackle the international trade in arms. And a meeting that will make Scotland the focus of world attention.

But before I address these policies to enhance our future, I want to turn for a moment to something that could threaten it – Labour’s policy fiasco on tax and spending. We have always said Labour do not add up. This week they have proved that in spectacular fashion.

People want to know a party’s promises, of course. But they also want to know how they will be delivered; how they will be paid for; and – crucially – who will do the paying.

After this week we know who will do the paying for Labour’s promises. Every single taxpayer will. It was kind of Mr Kinnock to warn us he wouldn’t make any tax cuts. We never supposed he would. It’s not your taxes he’ll cut. It’s your income.

This week he promised 20 billion of extra public spending which, he said would be paid for by economic growth. But existing spending plans already rely on growth in our economy. You can’t spend the same money twice. So his 20 billion would have to be paid for either by higher borrowing or higher tax. 10p on the basic rate of tax. Of course, it would be phased over a full parliament. So that is the cost of Mr Kinnock. 2p a year on the basic rate of tax every year for 5 years to take the basic rate even above the 33p we inherited in 1979.

It is a breath-taking lunacy. And this from the man who promised 14 out of 15 tax payers would not be worse off under his plans.

You work harder. Good. You pay more.

You put more into your job. Bad luck. You take less home for your family.

What folly!

That is no way to encourage people to work harder. It is a way to encourage people to work abroad. And when our doctors, dentists, surgeons and scientists take their talents abroad Labour will be surprised. But who will be the poorer? The whole country will be poorer. They always are under Labour.

So don’t be misled by the red rose ad-men. I know from personal experience how deep is the difference between Labour’s policies and ours. When I was young and living in an inner city, labour canvassers used to come to our door. They were confident and cocky. They assumed I would vote Labour because of where I lived. But they never said how their policies would help me make the best of my life or how they would help me reach a position where I could help others.

They just assumed I would go on living exactly as I did then. That was my role in life. And I should stay there. They talked about my rights. They talked about what they would do for me. But never about my opportunities or my obligations.

That is the enduring face of Labour. Never to ask what people, given the encouragement and opportunity can do for others or for themselves. Just what the state might do. Always with someone else paying the taxes. To block out hopes and ambitions and to disparage success. That is the real failure of socialism.

So when people say there’s no difference between us and Labour, tell them some of the differences.

We back the consumer through our citizens’ charter plans; they line up behind the trade union providers.

Our aim is lower taxes for all; they reject lower taxes and plan to put them up.

Our pledge is more home ownership; theirs more council homes.

We offer personal pensions to millions of families – pensions they own; they want dependence on the state and attack personal provision.

We promote more savings and investment; they plan to tax savings and so damage investment.

We help more families to own shares they want the state to have more.

We give more say to parents in running their schools; they would go back to council control – ‘on day one’, Labour’s Education spokesman boasts. Their top priority. To take parent’s freedom away. ‘on day one’. I tell you. If parents understand that message there will never again be a ‘day one’ for Labour.

So Mr Chairman, there is a giant gulf between our parties. That gulf is seen in many policies. But in essence it is that we trust people and they don’t.

One thing is clear. Labour have peaked. Roy Hattersley knows that. He now warns he will retire if Labour don’t win. Well there’s a threat. Vote Labour to keep Roy Hattersley in politics. It’s not the worst reason I can think of for voting Labour. But, it’s far from compelling.

As always, it is our party that has the new ideas. About good public services at low public cost. About raising standards in schools and hospitals. About leaving more money in the pay packet and about ownership for all. The issues that we put first are the issues that matter to Britain.

People build success

Mr Chairman, it is now evident that we are getting inflation down. And provided we keep it down our prospects are bright. The opportunities immense. I want to see those opportunities spread as widely as we can. To see more people with homes, shares and pensions of their own. More people with skills. More ways into independence and less ties to dependence. More say for every family in their children’s future. More chance to save to make that future secure.

In our party we know that it is not the state that builds the success of a nation. It is the citizen that builds the success of the state. What we in Britain must do is encourage success at every level. And recognise it when it happens. I don’t want a country in which anyone should be led to feel: ‘I can’t do that; that’s for other people’. I want to see an end to the bystander mentality – the view that problems are something for someone else to deal with, and that success is something you see on television. No-one should settle for less than they can achieve. The credo is simple. If you think you can do it, you can do it. So start to do it – and don’t delay.

Winning hearts and minds

We must take our Party’s appeal into every village and home in Scotland. Our door must be open to everyone. And we must open their doors to our ideas. And that means understanding the doubts and fears of many who traditionally vote Labour.

We have always stressed the dangers of Labour’s far left. And rightly so. Their neglect of defence; their attacks on the police; and their contempt for the law. And never suppose that those elements in the Labour Party have ceased to exist.

But the vast majority of those who have supported the Labour Party do not share those extremist views. They have their ideals. As we do. They want a better future for their children. As we do. We need to show them, through performance and persuasion, that it is the Conservative way that offers independence, choice, and better living standards.

And if you want to test the strength of our vision there is nowhere better than Scotland.

Scotland’s revival

Ten years ago Scotland stood on the fringes of Europe’s economy. Its industries outdated, its infrastructure and cities run down. So we took the Whitehall controls off Scotland’s economy. Output today is more than 10 per cent higher than it was in 1979. All due to the work of those in the offices and on the shop floor. At 4.6 per cent a year over 12 years, the rise in productivity in Scotland has been among the fastest in Europe.

No longer is Scotland dependent on a few declining industrial sectors. On steel, shipbuilding, coal. New industries have grown, high tech industries. Service firms alongside the manufacturing base. Who would have expected in 1979 the rate of expansion of services? Services now account for two in every three jobs in Scotland. 23 billion of value-added in 1989.

And look at the astonishing growth of the electronics industry – a fivefold increase in output since 1979. Who would have guessed then that within just twelve years, one in ten of all the personal computers built in the world would be made in Scotland?

We took the tax burden off personal success. And Scotland responded – with a surge of innovation and effort. There are five companies in Scotland today for every three in 1980. And the number of self-employed is up by more than half.

No one ever needed persuading of the attractiveness of Scotland, the quality of its people or of its environment. Whenever I come here I am struck by how within a few minutes of any airport or station I am in beautiful countryside.

But for too long the outdated face of Scottish industry turned opportunity away. Now, people and businesses are voting for Scotland with their cash. And with their feet. In 1989, 10,000 people moved here from the rest of the UK and from abroad. Since 1981 foreign companies have invested 4 billion in Scotland, creating or safeguarding a planned 80,000 jobs.

These achievements reflect Mrs Thatcher’s determination to get business and industry here and throughout the United Kingdom back on its feet. And her success in doing so.

Lanarkshire

But I recognise that, for all the progress since 1979, some parts of Scotland have managed these changes less easily than others. Lanarkshire is one. At Ravenscraig, and elsewhere in Lanarkshire, British Steel has already announced a number of job losses. That has come as unwelcome news to all who live and work in the area. And I am well aware these are by no means the first job losses in Lanarkshire.

Allan Stewart will shortly receive the report from the working party we set up to examine the problems of the area and see how they can best be overcome. Ian Lang and I will study that report carefully and speedily.

There will be no delay. We will take the necessary steps to help Lanarkshire become, once again, an area that will be attractive to new investment and new jobs.

But even before we see the report there is some preliminary work we can put in hand. Today – before we have seen the report – we are making a further 15 million available now to Scottish enterprise to enhance work on site clearance and to ‘green’ over the worst areas of industrial dereliction. For I want to see Lanarkshire as a thriving, successful part of the Scottish economy. I believe the extra resources I have announced today – together with the other support for Lanarkshire already committed – will be a further step towards bringing about that resurgence.

Labour’s tax on skills

Whatever we do, when it comes to regeneration, what areas like Lanarkshire need, will be men and women of energy, skill and vision. Good managers, trained professionals, skilled workers. They are the people who will build new businesses and create new jobs. And we need them here – not abroad.

Only one thing could discourage people like that – a Labour Government. They plan a special tax on the hardest-working and most skilled people. 72 a month extra national insurance stopped from the pay of a family doctor in Dundee, and a secondary head teacher in Glasgow. A quarter of a million Scottish workers and their families, would be caught in Labour’s trap – before we even begin to consider their tax increases.

Those people already pay nearly 1650 a year in national insurance. But that’s not enough for Labour. 1650? Labour would spend that in less than one hour on a new state-led body. A typical Labour proposal. The men from the ministry picking winners in technology – the boomerang that won’t come back, the aircraft too heavy to fly, the computer that could make Labour’s policy plans add up. Labour picking winners? They would have a better chance in sporting life. Yet it is to fund quangos like that – 71 of them – that Labour now want to attack the most enterprising people in our country with a new tax on skills.

Many of Scotland’s top business managers would be facing bills of 250 a month and more. Why should they stay in Scotland when Labour’s new policy would drive them abroad? Such a policy would be a disaster. Indeed, for Labour, it is a disaster. Publishing it was the beginning of the end of their prospects of power.

Economic revival

The industrial changes of the ‘80s have helped Scotland resist the present world recession better than most other parts of Britain. Things may seem difficult. Unemployment is rising. I regret that. I know what it means to the people and families involved.

But there are still far more people in Scotland with jobs than when we came to power. Britain’s unemployment levels remain below the EC average. But I know also that this is not much comfort to those looking for jobs who want them. What is of comfort is that we are winning the battle against the cause of the problem – inflation. That we have put in place policies to prevent it. And that our policies will mean more jobs in Scotland as Britain grows again. More secure jobs. In modern industries. For this generation and the next.

If we are to grow again strongly, we need to get inflation down. That we are doing. Eighteen months ago we took tough action against price rises. I knew it wouldn’t be popular. I knew it might not be ‘electorally convenient’. But I also knew it was right.

As a result inflation is now tumbling in Britain when it is climbing elsewhere. It will tumble further throughout this year. Scottish families and Scottish business will benefit from that.

It is not just inflation that we have in retreat. A few months ago we led Britain into the ERM. Since then we have made five cuts in interest rates. Yet the pound is as strong in Germany now as it was when we joined. Five cuts in interest rates. And the costs of mortgages falling as well. It is high time some of those who opposed entry into the ERM recognised the benefits it has brought.

Local government

There is another way in which we must help both people and business in Scotland. By improving the quality of local services. Reducing the costs of local government. And, where necessary, intervening through tougher capping powers to block excessive spending.

I believe local residents must have more choice. Parents should have the right we gave them to choose the right school for their children, and have more say in how it is managed. Families should have more choice over the homes in which they live. This Party gave Scottish people the right to buy. Now we are going further by giving a new group of tenants the chance to buy their homes with our rents-into-mortgages scheme. Older people. Those on lower incomes. Single parents. They found right-to-buy difficult. Rents-into-mortgages is exactly for them. The response has been huge. Two weeks after the new scheme’s launch, 20,000 people had expressed their interest. People who thought that they would never be able to own a home. People who thought they would be renting for the rest of their lives. Now they will have something that is theirs; something they can leave for their children in the future.

We are also extending choice into the future shape of local Government itself. There will be many different ideas – perhaps even a return to the old city corporations. But few will favour keeping artificial and impersonal regions like Lothian or Strathclyde. You can be certain. If people’s views, point to the scrapping of any authority, the next Conservative government will act to abolish it.

Citizen’s charter

I am determined to give power back to the people who use public services. I intend to help them secure improvements in quality. That is what our new citizens’ charter programme will work to achieve.

The charter’s principles are already in action. When we privatised British Telecom we insisted on competition and tough regulation. And compensation too, when standards weren’t met. The results were dramatic. Then, a quarter of callboxes were unusable; now it is just one in twenty. Then, under three-quarters of line cuts were repaired in two days. Now it is over 96%. But we should do better still. So we are bringing in more competition to help the consumer. As a direct result there will be a cash cut in BT charges this autumn. Then take gas. There, too, we set up a regulatory regime. But the system was not tough enough. So this month OFGAS has acted. If inflation falls as we expect, gas charges next year will actually be cut. When did that last happen? Did it ever happen when gas was in state hands? It will now. And, again, the public will gain.

Ian Lang has told you how he will develop the Citizen’s Charter in Scotland. Already, some forward-thinking services have brought in the kind of reforms I want to see throughout the public sector. In the health service; in Scottish homes; and in education. They must go far further.

We will be developing our charter programme throughout the summer. Make no mistake. I intend it to bite. And to do so in the interests of parents, pupils, passengers and patients alike. This summer we will be publishing a white paper which offers the citizen nothing less than a revolution in the way public services are delivered. It will be the most comprehensive quality initiative ever launched. New and tougher standards of service will be set. We will introduce a wide range of mechanisms to ensure they are met, to the citizen’s satisfaction. But it should also point the way to new pride and purpose for those who work in public services. They too believe in a job well done.

We do not fall into the trap of supposing that better service must always and everywhere mean spending more. That is Labour’s expensive fallacy – peddled by those who would rather take the money than deliver the service. We never forget it is the citizen’s money government uses; and it is the citizen to whom the public sector must be accountable for every penny it spends.

The whole public sector will be expected to commit itself to this process. Whitehall, the new Next Steps agencies, local Government, public services, and nationalised industries. And I will keep it under the closest scrutiny as it does. There must no longer be any hiding place for sloppy standards, lame excuses and attitudes that patronise the public. Our programme has four main strands – more competition, privatisation and contracting out, to ensure that complacent services are shaken up; new approaches to pay and budgeting which mean that good performance is rewarded and low standards penalised; a complete review of all the mechanisms for helping the public to get the standards they deserve – truly independent inspectorates, tough auditing, ombudsmen and effective complaints procedures; and insistence on the publication of detailed targets for performance and how nearly those targets are achieved. Services and their users must know where they stand. And, where possible, as the new electricity companies have already found, we intend to look for ways of direct compensation to the public when standards fall far below what the public should be entitled to expect.

For each public service we will select the most effective means of delivering the best. For each service the techniques will be different. But the citizen’s charter will have just one common aim – achieving the highest possible standards of performance for those who rely on public services in this country. Once complete, it will be the most comprehensive of its kind in Europe.

Health

No-one should doubt our commitment to good services at every level, including the NHS. I believe in the health service. My family and I use it. We will go on doing so. Because I have confidence in the NHS and admiration for what it achieves. It is well over forty years since the health service was formed. And everyone knows how dramatically it has grown. But hang on. For most of that time Britain has had Conservative governments. So who do the government’s critics imagine has been pouring resources into the NHS over that time? Nearly 33,000 million a year, four times as much in 1979. Treatments unheard of in the 1970s routine today. Health spending in Scotland some 24% above the UK average. It wasn’t Labour that achieved all that. They weren’t in Government. We were.

And what of this? At every recent election Labour promised a 3% real annual growth in NHS spending. They never got near that in office. Just 1.5% a year between 1974 and 1979. Nurses’ pay cut by 21%. The hospital building programme slashed by a third. A very modest performance. Indeed shameful. The more so when measured against their own immoderate boasts.

Yet while they’ve blustered, we have delivered. Spending is up, year after year after year. 3.1% a year over twelve years. And levels of patient treatment up as well. Our performance has gone far beyond Labour’s promises.

And the fact is that if Mr Kinnock’s 2+% growth formula had been applied this year, the NHS would have had 500 million less than it has had from us. 500 million? That would have meant 500,000 fewer patients treated in hospitals, according to the Labour leader’s official plan. It must be one of the biggest own-goals in British political history. Yet more evidence that Labour doesn’t and can’t add up.

There is just one more thing I want to say about the health service. I do not accept that there cannot be change in the NHS. I do not accept that every pound in nearly 33,000 million cannot be better spent. Our reforms are about achieving better patient care – and better patient care alone. We will see them through.

European Council

I want Scotland to play a leading role in international affairs. Our place in the world begins in Europe. As I said recently, it lies ‘at the heart of Europe’ . I believe that Scotland’s experience is essential to that. I was delighted that Glasgow made such an impact as Europe’s city of culture for 1990. Next year I want to put Edinburgh, like Glasgow, at the centre of European events.

Edinburgh is already the European Community’s fourth largest financial management centre. And it is moving up the world league close on Chicago’s heels. But a historic capital like Edinburgh should be a diplomatic centre as well. I can tell this conference today that when a Conservative Government chairs the European Council in 1992, we will bring the European council, and the summit meeting of European leaders, to Scotland. I want it to be in Edinburgh that Europe signals the final completion of the single market, on which so many countries have laboured for so long.

Scottish Assembly

But I don’t just want Britain to be in Europe. I want Britain to be a leader in Europe. That means being confident and secure as a people as well. I believe passionately that our country must stay united. The United Kingdom draws together, in partnership, the traditions of four proud nations. We have much to give each other. Much to learn from each other. The Scots have always played a great part in the government of Britain, and always will. I know there is sometimes a feeling – not just in Scotland, but in Wales and England too – that Westminster can be too remote. I believe that government should be – must be – more receptive to the aspirations of people throughout the united Kingdom.

But I do not believe those aspirations would be met by the creation of a further tax-raising body in Scotland; by more Government and more taxes that would disadvantage this part of the island. I don’t want industry and investment to be driven out of Scotland by the highest level of tax in Britain, destroying jobs and smashing hopes. Nine out of ten of Scotland’s business leaders oppose the kind of revenue-raising Assembly the convention proposed, and surely we must listen to that warning.

Ever since the union of the crowns of Scotland and England in 1603, it has been as a United Kingdom that we have made our incomparable mark on the history of the world. And in this century it was as a British people that we fought in two world wars. And, more recently, as part of the British armed forces, that so many young men and women from Scotland went to the Gulf to throw Saddam Hussein out of Kuwait. I was proud to meet them when I visited our forces in the Gulf, and proud, too, last weekend that it was here in Scotland that Britain gave thanks for what they had achieved.

Britain in the world

At that service there were readings by children from differing traditions – Christian, Muslim and Jew. All Scottish children. It was very moving. They spoke of common thankfulness and a prayer for peace. It is a peace that for the sake of all our children we must buttress with new safeguards.

Britain did not sell arms to Iraq. Others did. Saddam Hussein built up his supplies until he had twice as many tanks as Britain and France put together. That is why I have called for a register at the United Nations of all conventional arms sales. I can tell you today that I have asked our representative in New York to press this issue as a high priority. And let me also give more details today of what I want this register to do. It needs to require countries selling arms to declare what they sell, to whom they sell them and in what quantity. I shall be working for that register to be agreed this year.

Achieving agreement on a register will be an ambitious objective. But we are getting used to breaking new ground. For example, the safe haven for the Kurds in the north of Iraq. And the United Nations special commission, which in the coming weeks and including British scientists, will search out and destroy the weapons of mass destruction still held by Saddam Hussein after the war. Both those ideas were without precedent. Both were British proposals. A Conservative Government s proposals.

Today, at this conference, I can give the country two further assurances:

First, Britain will veto any UN resolution designed to weaken the sanctions regime we have set in place, for so long as Saddam Hussein remains in power;

Second, that we shall ensure, by whatever means it takes, that Iraq can never again build a capacity to threaten her neighbours with nuclear, chemical or biological weapons.

Conclusion

Mr Chairman, we have come a long way together these last seven months. Do you remember what the critics were saying last autumn? They said that our government was finished. We were 16 per cent behind in the opinion polls in the UK as a whole, 33 points behind in Scotland. Well, seven months on we have silenced those critics. Now we are ahead in the polls overall, and we have increased our support by a third in Scotland.

Last autumn we were facing a world recession. Now we are on the road to recovery. Then inflation was rising. Now it is plummeting. Then mortgage rates were locked at a high level. Now they are coming down and poised to fall further. Then disputes over local government finance seemed insoluble. Now they are solved.

And I have not even mentioned our progress in Europe, or our help for the Kurds. That is not bad for just seven months work.

So we should be confident about our party’s future. And, what is more important, we can be confident about the future of Scotland as well.

This party has the right vision for Britain’s future. Our priorities are to care for those who can’t, to encourage those who can, and to make our country a better place to live in for everyone.

And that message must ring out from this conference. Our Party in Scotland – the Conservative Party – is on the way back. We are not talking any more about holding on in Scotland. We are talking about regaining seats in Scotland from Labour, Liberal and Nationalists, too. And we will not be easily satisfied. Not satisfied at all, until we have what once we had – a majority of seats in Scotland, safe and secure in the Conservative interest. Nothing less will do. And with your support, whenever the election comes, we will begin that work.