The Rt. Hon. Sir John Major KG CH

Tag: Maastricht Treaty

  • Mr Major’s Commons Statement on the Economy – 9 June 1993

    Below is the text of Mr Major’s statement to the House of Commons on 9th June 1993 in the Economic Debate.

    PRIME MINISTER:

    The Prime Minister (Mr. John Major) : I beg to move, to leave out from House’ to the end of the Question and to add instead thereof : welcomes the widespread indications of economic recovery in the United Kingdom at a time when many other major economies are in deepening recession ; recognises that the interests of industry are at the heart of the Government’s policy and acknowledges the comprehensive programme of training and employment opportunities for unemployed people that the Government has put in place; welcomes the Government’s commitment to its Manifesto pledges including its commitment to improving the efficiency and effectiveness of public services through the Citizen’s Charter ; deplores the scare-mongering stories about public spending peddled by the Opposition ; and applauds the Government for its determination to maintain low inflation, sound public finances and firm control over total public expenditure upon which a sustainable economic recovery depends.’. As the right hon. and learned Member for Monklands, East (Mr. Smith) sits down, I have little doubt what is in his mind : “That’ll keep John Edmonds quiet for a week or so.”

    Before I turn to the substance of the debate, I wish to say a word or two to my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) regarding his remarks at the commencement of today’s debate. In his speech, my right hon. Friend spoke of a number of matters of very great importance, including the case that we have discussed on many occasions over the past two years for an independent central bank.

    I share my right hon. Friend’s loathing of inflation. That is an issue that we discussed frequently. We both saw the case for an independent central bank, able to take decisions on the implementation of monetary policy. There is a genuine case for that. I do not dissent from my right hon. Friend’s remarks about it. The very real concern that I have always faced is one that I believe is spread widely across the House : the need for accountability to Parliament for decisions on monetary policy matters. Were a way to be found to get the benefits of an independent central bank without the loss of parliamentary accountability, my views would be very close to those of my right hon. Friend, but I have to say to my right hon. Friend–I believe, from our many discussions, that it is a view he shares– that what is more important than the institutional arrangements is the underlying policy that is actually being followed. On that, I do not believe that an independent central bank would have brought down inflation any more rapidly than we have been able to achieve.That is something for which I am happy to pay tribute to my right hon. Friend.

    Also, I entirely share my right hon. Friend’s vision of the economic goals of this Government and of the difficult path that we have had to follow to achieve and maintain low inflation and restore sustainable growth and employment. My right hon. Friend and I– [Interruption.]

    Madam Speaker : Order. The House must settle down. Hon. Members do not have to listen, but whoever is speaking has to be heard. There is a great distinction between those two statements. The Prime Minister.

    The Prime Minister : My right hon. Friend and I faced crises both before and after September last year. We worked together towards objectives that we shared, and we were always agreed as to our main goals : low inflation, sustainable economic growth, an increase in prosperity for all our people as medium and long-term objectives. I believe that history will look favourably on my right hon. Friend’s economic and financial skills, but a strong Government need political skills as well– [Interruption.] –when leading a democratic society and, in particular, when handling a lively House of Commons with a small majority.

    Dealing with the problems of a small majority is a fundamental fact of democracy that no one dare or should even attempt to overlook. However, as we have shown in the battle over inflation and in our pursuit of European policy, against great difficulties in this House, we were not prepared in the Government to allow short-term difficulties to deflect us from what were the right long-term policies for this country. That was the position, and it is the position.

    I am grateful to my right hon. Friend for his support and help throughout the past two and half difficult years. I acknowledge the difficulties that he has faced and the courage with which he has faced those difficulties, and I accept the support that he has offered to the Government for the future. I welcome the opportunity to debate economic policies at a time when output is up, exports are up, productivity is up, confidence is up and, as announced today, when business starts are up.

    The right hon. and learned Member for Monklands, East has just made the speech that we expected of him. At the end of it, we are no better informed about his economic policies than we were at the beginning of it–or even about whether he has any economic policies or whether he has progressed beyond the sound bites that so frequently construct them. We do know something about the right hon. and learned Gentleman. We know that he is the man who announced the biggest tax increase in peacetime history, just before the general election. He is the man who said confidence would carry on falling, just before the CBI announced the highest level of confidence in 10 years, and he is the man who calls for a debate on the economy just as the economy is recovering. I hope that, with timing like that, the right hon. and learned Gentleman never takes up boxing, because it would be very painful. Many things can be said about him, but “floats like a butterfly, stings like a bee” is clearly not among them.

    What does seem right about the right hon. and learned Gentleman was said by the right hon. Member for Chesterfield (Mr. Benn). I remind the right hon. and learned Gentleman what his right hon. Friend said about him : “I do not think that Members of Labour’s Front Bench would have even two ideas about what to do with the economy if they came to power a series of sound bites glued together and called an economic policy is not an economic policy.”–[ Official Report, 20 May 1993; Vol. 225, c. 420.] That remains as true at the end of the right hon. and learned Gentleman’s speech as it was before.

    Today’s debate goes right to the heart of the fundamental divide between the Conservative party and the Labour party. The Labour party stands for higher public spending, higher taxation and more state interference in business and industry. We stand for controlling public spending, bringing direct taxation down where we can and getting the state off the backs of businesses and individuals. Let me deal with one matter that was fundamental to the right hon. and learned Gentleman’s speech. Let me turn immediately and clearly to social policy. I did not come into politics to dismantle the welfare state. I have no intention of doing so and neither does my party. At the moment, in different parts of the country there are many vulnerable people who are worried. They are worried because the Opposition systematically, day after day, leak after leak, sound bite after sound bite, have sought to frighten them. The Opposition have peddled scare after scare–

    Several hon. Members rose —

    The Prime Minister : I will give way later. The Opposition have peddled the man to spread scare stories; surely not a man to condone scare stories, so let me be charitable to him. Perhaps he did not know–had no idea–when the hon. Member for Livingston (Mr. Cook) swore that we would privatise the national health service, when the right hon. and learned Gentleman must have known that that was untrue. He could not have known about that, because he is an honourable man.

    What did the hon. Member for Holborn and St. Pancras (Mr. Dobson) say? He said that the Government were “threatening to cut pensions and benefits for the worse off.” In the autumn statement 13 days later, pensions and benefits rose. I am sure that the right hon. and learned Gentleman did not know what his hon. Friend would say, because he is an honourable man and would not have sanctioned it.

    It was the right hon. and learned Gentleman’s party that repeatedly claimed that trust hospitals were leaving the health service. They were not : the Labour party knew that they were not, yet it needlessly scared sick people for a vote or two, time after time. The right hon. and learned Gentleman could not have authorised that, because he is an honourable man–or so I had thought. But then I discovered what he had to say : “What’s going on will lead to the privatisation of the NHS.” That was flatly untrue, of course, and another scare. I wonder who could have spread it? The right hon. and learned Gentleman spread it. In the Labour party the scares come from the top and behind that moral righteousness is someone who has no scruples whatever.

    The right hon. and learned Gentleman claims that the Conservative party won the election by telling untruths. Let me remind him about that election. It was his party that published 10 patient case histories and had to withdraw them when it turned out that it had made them up. It was his party that made up untruths about a sick little girl and spread them across the country. That is the party that dares to talk to us about standards. There is a word for that, but it is not parliamentary.

    Let me turn to the subject of public spending. The Government know that, if the economy is to grow, the tax man cannot take more of the proceeds than the country can afford. In the Conservative party, we understand that people want more money in their own pockets and do not want the Government to spend their money for them. Of course, in the recession, spending had to increase. I do not apologise for that increase in spending–it was necessary in the recession and it was necessary to protect the vulnerable. I saw no support from Labour Members for any expenditure reductions throughout the recession and every support for dramatic increases week after week from every Member of the Opposition parties.

    Mr. Calum Macdonald (Western Isles) : Will the Prime Minister give way?

    The Prime Minister : Later. During that recession, not only did expenditure necessarily rise but income necessarily fell and that added to the borrowing requirement. Even though a great deal of that will reverse as growth returns, it is going to take time. That is why we have embarked on the public spending review. Governments have to take difficult decisions. We have to face structural increases in public spending, as any Government would. There are demographic changes, changes in student numbers and more elderly people, especially the very old. As we address those problems, the Opposition gaily spread mischief–a little fib here, a little scare there–yet as it does so it is carrying out a review into social expenditure. It does not have the courage to do it directly ; it has farmed it out to the commission on social policy. The only form of contracting out that the Labour party approves of is contracting out difficult decisions to other people.

    The right hon. and learned Gentleman cannot run away from what he said : “We” –that is, the Labour party– “should be prepared to re-examine everything. I have not ruled anything out”. That is its position on social policy and Labour Members nod in agreement. Daily, the Labour party invites us to rule things out, while it examines everything–pensions, child benefit and every other aspect of social policy.

    How responsible the right hon. and learned Gentleman is. I suppose that that comment shows that he wants to grapple with real problems, but when he faces other audiences, he wants to rule everything out. Which is the real right hon. and learned Gentleman? The gritty, determined facer of problems who wants to examine everything where nothing is ruled out, or the wriggler, twisting and turning, saying one thing to one audience and another thing to another audience?

    Mr. John Garrett (Norwich, South) : Could the Prime Minister, First Lord of the Treasury, tell us what he was doing during the long period of recession, which has caused so much misery throughout the country? Was he looking the other way? Was he train spotting? Was he walking into cupboards? Has there ever been a more wimpish approach to the problems that face this country than that which he has shown?

    The Prime Minister : I shall tell the hon. Gentleman directly : we have been presiding over a policy that brought inflation down to 1.3 per cent. and interest rates down to 6 per cent. so that this country is now poised for the largest growth in the European Community this year, next year and probably for the years beyond that. We have been taking the long- term view, not the short-term, option. That is what we have been doing–I am grateful to the hon. Gentleman for giving me the opportunity to point that out–while he has opposed every policy that has brought down inflation and interest rates.

    The Opposition will be glad to know that our review of public spending will be careful and thorough. There will be two criteria : are any changes fair, and are vulnerable people protected? When the answer is no, we shall not make the changes. When the answer is yes, we shall set out to the House the implications of those changes. There are no soft options. The Government’s duty is to examine them all and pick the right ones. We know that we need to reduce public borrowing, which is why, in the last Budget, we decided that some increase in revenue was necessary.

    We decided to introduce value added tax on fuel and power, not least because it would help meet our Rio commitments, commitments that the Opposition urged us to extend. We had every reason to expect cross-party support. The Liberal Democrats had stated in their green paper : “Liberal Democrats advocate as a first priority the imposition of a tax on energy The UK is unusual amongst EC members in not applying even standard rates of VAT on domestic fuels we would press forward by ending the anomalous zero rate of VAT on fuel”. Where were those men of principle in the Division Lobbies after the Budget?

    What did the Labour party say? It said : “Zero rating on items such as food, fares, books and children’s clothing should remain as an essential part of the VAT system.” That was quite clear. It continued : “We will also use the tax system, as well as regulation, to help protect the environment.” That can mean only one thing. In the list of zero-rated items, there is no reference to zero rating for domestic fuel. The Opposition intended to put it up, and they know it. If they did not, will they tell me now why it was not in their list of zero-rated items? The right hon. and learned Member for Monklands, East does not answer–no doubt, as a QC, he believes in the right to silence for an accused.

    When we introduced VAT on fuel and power, we made it clear that there would be extra help for less well-off pensioners and others on low incomes. I am glad to repeat that commitment. In recent months, the right hon. and learned Gentleman has made a great deal of the VAT increase, as have his hon. Friends.

    Ms Harriet Harman (Peckham) : So have the voters.

    The Prime Minister : So did the voters, says the right hon. Lady. What the right hon. and learned Gentleman did not mention is that he was the Energy Minister who let electricity prices rise. What was the increase–5 per cent., 10 per cent., 15 per cent.? No, it was 30 per cent. over and above inflation.What did the right hon. and learned Gentleman do to help the less well-off? I shall tell the House what he did–absolutely nothing. The position is clear. The right hon. and learned Gentleman cares about pensioners when he is in opposition–how he cares about pensioners in opposition–but in government he disregards them absolutely. One may think that that was a single lapse but, in case anybody thinks that that is so, let me say that the right hon. and learned Gentleman was a member of the Government who twice held back the Christmas bonus and cut capital spending on the health service. That is his record, and he should be ashamed of it.

    There is another case where the right hon. and learned Gentleman’s actions do not match his words. Today, he again attacked our borrowing levels, but his election promises would have put up borrowing way above the present level. He is still at it. “Let’s spend £6 billion of capital receipts,” says the right hon. and learned Gentleman. “Let’s spend an extra £1.5 billion on public sector pay.” The shadow Chancellor says, “Let’s renegotiate our rebate and pay more to the European Community.”

    Is there any area of Government spending that the Opposition are prepared to cut? Perhaps the shadow Chancellor can tell us. Perhaps we could have another sound bite to tell us where he would find the necessary savings. Or perhaps the deputy leader of the Labour party can tell us; after all, she came into government to implement the cuts in education that her hon. Friend the Member for Eccles (Miss Lestor) refused to make.

    Mr. Geoffrey Dickens (Littleborough and Saddleworth) : Will my right hon. Friend explain why, if the Opposition are sincerely worried about the disadvantaged people of this country, they demand more and more overseas aid, day in, day out? [Interruption.]

    Madam Speaker : Order. We all like a little bit of fun and hilarity, but we also want to hear the Prime Minister.

    The Prime Minister : The fundamental point about overseas aid is that, in order to sustain it as the Government have done, one needs to pursue the right economic policies, as we have also done. I am glad that the motion mentions manifesto promises–glad, but a little surprised because the right hon. and learned Gentleman has scrapped all his election promises. We stand by our manifesto policies. We promised action on trade unions, housing, lotteries, railways, education and asylum, and we have kept our promises. Bills on each of those matters have already passed through the House. We promised to uprate pensions and benefits, and we have done so. We promised to maintain child benefit, and we have done so. We promised to increase real resources for the health service, and we have done so; year on year, spending is at record levels. They are the promises we made, and we have kept each one.

    Mr. John Fraser (Norwood) : When the Prime Minister went on his trip down memory lane to Brixton and other ethnic areas, did he tell the people that he was going to take away the right of appeal for visitors?

    The Prime Minister : The hon. Gentleman knows as well as any hon. Member that the great improvement in race relations in this country is directly related to the firm but fair immigration policies pursued by this Government. I am surprised to hear him venture down that track, in view of his record of favouring good race relations. We promised to deliver low inflation, and we have delivered on that promise. We promised to resume economic growth, and it is now resuming. Inflation, at 1.3 per cent., is at the lowest level for 30 years. Interest rates, at 6 per cent., are the lowest in the Community. There are now too many signs of recovery for even the Opposition to ignore them. Manufacturing output has increased for months in succession and unemployment has fallen three months in a row. It is too high–I share that view–but it is moving in the right direction, and sooner than most people expected.

    It is certainly sooner than the hon. Member for Dunfermline, East (Mr. Brown) expected, because, after the Budget, he said : “I make one Budget forecast–that, after the Budget, unemployment will rise this month, next month and for months afterwards”.–[ Official Report, 17 March 1993 ; Vol. 221, c. 289.] One day later, unemployment fell. The next month, it fell again, and the next month, it fell again. Another sound bite is needed, I think. The recession has been damaging, and recovery has not come easily, but it is now under way– [Interruption.]

    Madam Speaker : Order. Hon. Members must come to order. The bawling and shouting coming from the Back Benches this afternoon is utterly disgraceful. [Interruption.] I know who the Members responsible are, and I need no one to point them out for me.

    The Prime Minister : Some time ago, the right hon. and learned Member for Monklands, East admitted : “we change our policies as we move towards a different election, we’d be a very foolish Party if we went into an election in 1995-96 with exactly the same policies”. That is certainly true. But whose policies were they? They were the right hon. and learned Gentleman’s. He was the undisputed author of Labour’s defeat. He was the man who drew up the disastrous shadow Budget. Hon. Members may remember the hype, the fake presentation, as if it were a real Budget, and the responsible tone–the right hon. and learned Gentleman even posed for photographs outside the Treasury. Lots of passers-by do that, but they never get into the Treasury. The right hon. and learned Gentleman talks of broken promises, as does the shadow Chancellor, the hon. Member for Dunfermline, East. That is a good sound bite, but for the wrong party. The Labour party has broken every promise that it made about future policy at the election. Every one has gone to the social justice commission. The right hon. and learned Gentleman said : “We must be prepared to examine in an open-minded way some of the fundamental features of our approach. What is the right balance between universal and selective benefits”.

    It was not Milton Friedman who said that, nor my right hon. Friend the Chief Secretary, nor even Lord Desai–no doubt he would have been sacked if he had said it. The right hon. and learned Member for Monklands, East himself said it. Yet time after time he accuses us of examining aspects of public expenditure that any responsible Government would need to examine. He is the man who said that his planned increases in pensions and child benefits were essential, and that his tax proposals were fair, reasonable and popular. They have been so popular that he has dropped them all. So much for his promises. I would rather listen to the late Robert Maxwell on pension probity than to the right hon. and learned Gentleman.

    I know that the exchange rate mechanism and economic and monetary union are matters of some importance to hon. Members on both sides of the House. Since we left the ERM, there has been substantial debate about monetary policy and the possibility of economic and monetary union. In the negotiations at Maastricht I sought and secured an opt-out on the single currency because I was sceptical of its economic impact across Europe and its artificial deadlines, and because I believed that such a decision was for the House to make. Since then, economic developments in the European Community have strengthened the reasons for caution that I set out. The European Community economies have diverged rather than converged. As we come out of recession, our main partners are heading into a recession. Some of our European partners remain keen on early monetary union, although many of their central banks are less keen. Even the keenest must now see the difficulties. The criteria for monetary union will simply not be met. When I was negotiating at Maastricht, the idea of a monetary union in 1997 looked ambitious, perhaps even a little dubious. I have to tell the House that it looks wholly unrealistic today.

    The economies of Europe are not remotely ready for one currency throughout the 12, soon to be 16, countries, and I believe that they will not be ready –if they ever will be–for many years. That is not an anti-European view; I simply do not believe that the economic circumstances will be right, and if they are not right the damage that proceeding would cause the Community would be profound, and I should not wish to see it occur. If some of our partners decided to go ahead prematurely, that would be an economic mistake. I do not believe that we should go with them.

    We have sought reform of the exchange rate mechanism. I make no secret of the fact that I prefer stable exchange rates, and so does industry. But I cannot accept that the present operation of the ERM is satisfactory. Sterling was forced out, in the circumstances described by my right hon. Friend the Member for Kingston upon Thames, but so was the lira. The franc, the peseta, the escudo, the punt and others have at different times been put under great pressure. Certainly, I could not recommend that sterling return at present. We should need greater convergence between the monetary policies appropriate for all the Community economies, and we should need to be satisfied that the system would be operated to the benefit of all its members.

    In January, I made it clear that those circumstances would not apply this year. I now doubt whether they will apply for some years ahead–possibly they will not apply in this Parliament.

    Sir Peter Tapsell (East Lindsey) : There will be a widespread welcome throughout the party for what my right hon. Friend has just said to the House, and there will be great support for the policies that he has enunciated throughout his speech.

    The Prime Minister : I am grateful to my hon. Friend, and delighted to have a party at ease with itself. It is clear that the Labour party has no policies at all, and certainly no economic policies. When it had policies, they lost it the election. As the hon. Member for Brent, East (Mr. Livingstone) put it–rather cruelly, I thought–the right hon. and learned Member for Monklands, East “bears the primary responsibility for tax and economic policies that lost Labour the election.”

    And now Labour has none. That is not my view alone. It is clearly shared by Mr. Edmonds of the GMB, the union that sponsors the Leader of the Opposition–or at least, it sponsored him until last Sunday. I am not sure whether things have changed since then. Mr. Edmonds says that Labour has an identity problem and asks whether the voters “know what Labour stands for”. He says that Labour must shake itself out of its lethargy. He asks : “Where was the Labour movement” during the past few months? He may well ask.

    The Labour leadership cannot have been examining economic policy, because the shadow Chancellor would not recognise economic policy if it gripped him by the windpipe. The Labour leadership may have been absorbed in its falling membership, or it may have been trying to fight off the defeat of the right hon. and learned Gentleman’s party reforms. There is one area of total agreement between the right hon. and learned Gentleman and myself : he wants one man, one vote–a novel concept for Labour. He is right about that, and he has my support. Unfortunately, he does not have Mr John Edmonds’ support. Mr. Edmonds wants one member, one vote, so long as he can be the member and he, and nobody else, can exercise the vote.

    So long as the Labour party remains subordinate to the trade unions in policy, a paid for and wholly owned subsidiary of the trade unions, Labour Members will sit on that side of the Chamber. I shall tell the right hon. and learned Member for Monklands, East why he and his party fail to convince even the leader of the union that sponsors him. It is because Labour is a party without policies and without principles that it will remain, in the short and the long term, a party without power.

  • Mr Major’s Joint Doorstep Interview with M Balladur – 28 May 1993

    Below is the text of Mr Major’s joint doorstep interview with the French Prime Minister, M Balladur, held in Paris on Friday 28th May 1993.

    M. BALLADUR:

    [Spoke in French]

    PRIME MINISTER:

    Prime Minister, I would simply wish to echo what you have said over the last few moments. We have had the opportunity over the last couple of hours of covering a very wide range of matters, bilateral matters, some quite detailed matters, some matters with a very long term concern indeed. We had the opportunity of looking in particular at the Copenhagen summit, not very far away now, and what we might seek to achieve there. We have looked at problems we wish to address together like subsidiarity. We discussed the desirability of a GATT settlement and some of the difficulties that have arisen there, and we looked of course at the problems there have been in Bosnia upon which our two governments have taken a very similar view from the beginning and in which of course both of our governments have committed quite substantial numbers of troops.

    That is by no means an inclusive list of the matters we discussed. A good part of our discussion were not matters requiring immediate decisions today, they were looking at problems and difficulties and opportunities that lie on the horizon both in the short and the long term and deciding how we might work jointly to seek to address those particular problems.

    I think the Prime Minister might agree with me in saying that the relationship and the extent of bilateral cooperation that exists at the moment between the United Kingdom and France is as good, if not better, as it has been for many years and I personally am delighted about that and very pleased to have had the opportunity of continuing our discussions this morning.

    QUESTION:

    Have your talks touched upon the question of the Exchange Rate Mechanism and whether by appointing a pro-European Chancellor that improves the chances of Britain re-entering the ERM?

    PRIME MINISTER:

    We did discuss the monetary affairs across Europe this morning, yes we did discuss that for a while. The government’s position on the Exchange Rate Mechanism was set out some time ago by Norman Lamont, that remains the position. The circumstances for Britain to re-enter the Exchange Rate Mechanism do not exist at the moment, they do not exist in terms of the relationship between British and German monetary policy and are unlikely to do so in the near future. That point was made quite clear by Norman Lamont, it has been made clear in the past by Ken Clarke and others, and it is the government’s collective position.

    QUESTION:

    If the policy has not changed, why has the Chancellor?

    PRIME MINISTER:

    I have a full press conference this afternoon and I will address domestic issues on that occasion, not now.

    QUESTION:

    [Inaudible but about the social chapter]

    PRIME MINISTER:

    I argued against the social chapter in the Maastricht Treaty not just on behalf of my country but on behalf of all the European countries. And I did so for reasons that are as relevant today, if not more relevant, than the reasons when I discussed them in Maastricht. Firstly I believe that some of the provisions of that chapter would destroy jobs and not create them, and we had then, as we have now, a very high level of unemployment across the whole of Europe; and secondly, because we cannot just look at the situation within Europe, Europe has to compete with the United States, with Japan and with the Pacific countries. If Europe has costs upon their employers and consequently therefore costs upon the products that they produce, they will render themselves; less competitive with Japan, the United States and the Pacific Basin, and that will cost further jobs in Europe. And it was upon those bases that I argued against the social chapter. We have differing views in the European Community about this and I respect the views of my European partners, but those are the views I held then and hold now.

    QUESTION:

    [Inaudible but about the situation in the former Yugoslavia]

    PRIME MINISTER:

    I read when I flew in yesterday evening the remarks by M. Juppe on the question of former Yugoslavia and I endorse exactly what he said, the position and concerns that we have expressed in the United Kingdom are very closely mirrored in France and the Prime Minister and I hold very similar views about them.

    QUESTION:

    On Bosnia have you, the French and the rest of the Western allies come to the conclusion that the Serbs have won the war and if you have not come to that conclusion what are you going to do to roll back their lands gained by force?

    PRIME MINISTER:

    We have made it clear right from the start that we do not accept Serbian gains by force, that was made clear by the Foreign Ministers again just a few days ago, we do not accept Serbian gains by force. But you have to address the question that M. Juppe put yesterday: are you prepared to put 200,000 troops into Bosnia in order to force them back by force of arms? And we know the answer to that, people are not prepared to do that, but we will maintain sanctions, we will maintain diplomatic pressure and we will not accept the land gained by force.

    M. BALLADUR:

    [Spoke in French]

    QUESTION:

    [In French]

    M. BALLADUR:

    [Spoke in French]

    QUESTION:

    Could you spell out what you hope to achieve at the Copenhagen summit and what your discussions this morning touched on about that matter?

    PRIME MINISTER:

    I can spell out some of those things, certainly. We will clearly want to discuss the particular economic problems that exist within the European Community, the problems of unemployment in particular at the Copenhagen summit, that would be our wish and I think it will be the wish of all our partners as well. We will want to look in some detail at how we carry forward the proposals on subsidiarity, work is proceeding on that at present, we would like to see that work carried forward. We will certainly wish to carry forward the discussions on enlargement of the Community and precisely what that may mean. Those are some of the detailed matters, by no means all, but they are some of the detailed matters we discussed this morning.

    QUESTION:

    Can I ask you what assurances you were able to give M. Balladur about the future economic policy of Britain, whether there would be any change and how it will affect the preparations for Copenhagen?

    PRIME MINISTER:

    I set out our economic policy about the Exchange Rate Mechanism, which I assume is what you have in mind, a few moments ago, it has not changed in those few moments, it is as it was and as it will remain.

    QUESTION:

    And has it changed since 24 hours ago?

    PRIME MINISTER:

    I just said no.

    QUESTION:

    With a new Chancellor can the British expect accelerated interest rate cuts?

    PRIME MINISTER:

    No British Prime Minister or Chancellor discusses interest rate policy and monetary policy on occasions like this and I have no intention of starting now. As ever, we will take the right judgments on the basis of what is necessary for the British economy in terms of the inflation prognosis, that is what we have done in the past under previous Chancellors, it is what we are doing now, it is what we will do in the future.

    M. BALLADUR:

    [In French]

    QUESTION:

    We have witnessed some gradual changes in the British position on the Uruguay Round in the last few weeks, could we have your comments on the style and substance of these moves?

    PRIME MINISTER:

    I welcomed what was agreed the other day in the Agriculture meeting, we have to see what happens when we come to the further meeting at the beginning of June, but I have nothing further to say about the Uruguay Round as a whole, I hope we will be able to reach a satisfactory agreement on the Uruguay Round, I think that is in everyone’s interest and I think that is generally agreed.

  • Mr Major’s Press Conference in Paris – 28 May 1993

    Below is the text of Mr Major’s press conference in Paris on Friday 28th May 1993.

    PRIME MINISTER:

    I just want to make a few introductory remarks and then I think we can really begin by taking the questions that concern you and I will attempt to answer them.

    I came here this morning at the invitation of the President of the Republic who very generously gave me lunch. President Mitterrand of course has been the longest serving French President for over a century and as such he is listened to with very great respect and I greatly enjoyed my meeting with him again today.

    I began the day earlier this morning with extensive talks with Prime Minister Balladur whom I had reacquainted when he came to dinner at Downing Street three weeks or so ago, we did of course know one another from the time we were both Finance Ministers some years ago.

    I also had the opportunity this morning of a meeting with President Giscard d’Estaing, who flew in from Strasbourg, and we were able to spend an hour or so together just before lunch.

    In each of those meetings we covered broadly similar, not identical, but broadly similar agendas. We looked at cooperation between Britain and France in international affairs, we looked at some of the main points on the European agenda and perhaps in particular the agenda that lies immediately in front of us on the Copenhagen summit, the Anglo-French bilateral that I will refer to in a few moments, and of course the European interest in the G7 summit at Tokyo later on in the summer.

    Let me make one or two general points. The first point I make is one that I make with a great degree of pleasure, and it is this. There is at the moment a great deal of common ground between people and politicians in France and the United Kingdom, and indeed in Germany and other member states, on the future of the European Community. I welcome that, I think there is an increasing concordat on many of the things we need to do in the Community and I think that is thoroughly welcome. The Community went through a period in the second half of the 1980s when there was very dramatic growth right the way across Europe. Subsequently the growth across Europe has fallen away and many of the difficulties that people have faced economically in countries right the way across the Community, international events that have swept right across the continent, have often been blamed, in many cases unfairly, on the specific activities of the Community itself.

    The second point I want to make is that I cannot myself recall a time when the relationship between the United Kingdom and France has been in better shape than it is at present. In many areas we have similar policies, we work together, we complement each other, we have joint interests. That is very welcome and I think we should maximise those joint interests in the interests of France and in the interests of the United Kingdom and both the President, the Prime Minister and I are determined that we will make the most of that.

    Of course between neighbours there are areas where we have a different shade of view, areas where there are disagreements. That I think is inevitable between neighbours and where that happens we get a great degree of publicity about it. But when one looks beyond those occasional matters, people perhaps take for granted the fact that millions of French and British visit one another each year, live and work in one another’s countries, build ships, cars, aeroplanes together as joint ventures. All that is happening and I welcome it very much indeed.

    I think they forget also that we work together, Britain and France, in a unique relationship as members simultaneously of the European Community, the Group of Seven and the United Nations Security Council. That is a very vivid illustration of the extent of common interest that exists between Britain and France and the extent to which we do work together and need to work together in the future. I think people even take for granted the fact that we are now joined by the Channel Tunnel – a massive joint engineering triumph.

    I have spent today discussing a range of matters with the President and the Prime Minister, they have not been discussing principally points of disagreement but points of agreement, points of how to develop policy further between us. we have had intensive discussion on how we can work together on issues of great importance to both of us, how to promote subsidiarity, that is to say the transfer of authority from the Community level back down to the nation state, how to promote enlargement of the Community to bring in the EFTAn states and in due course the central and Eastern European states, how to develop a closer relationship with Eastern Europe at the Copenhagen Council and how to cooperate even more closely in foreign policy, in defence and in security matters. So today has not been a day for short-term decisions but for long term planning about how to develop our joint interests together.

    Mainly because of the electoral calendar, France and Britain have not had a formal full dress British/French summit since June 1991. But I can tell you today that I have invited the President and the Prime Minister to come with a team of senior colleagues to a summit meeting in London in July. It will be held on 26 July when we will have a very extensive agenda to cover.

    I should also tell you that we have agreed this morning that the British Foreign Secretary, Douglas Hurd, and M. Juppe will be meeting next week in order to take further the Washington agreement on Bosnia that was concluded just a few days ago.

    So those are broadly the areas we have been discussing this morning, I will not go into detail, you may well wish to ask me details and as far as I can I will respond to that, but those are the general areas we have been discussing this morning and I think it has been a very useful series of exchanges.

     

    QUESTIONS AND ANSWERS

    QUESTION (Associated Press):

    Today Alain Juppe has said that France has submitted a proposal to the United Nations calling for peace-keepers to be able to use force in Bosnia, what is your reaction to that?

    PRIME MINISTER:

    Well that is one of the things that Douglas Hurd will be discussing with Alain Juppe next week. The British and the French position on Bosnia has been astonishingly close right from the outset of this whole affair, our analysis of the problem has been close, our commitment to put troops on the ground has been close, our commitment and determination on sanctions and other matters has been close and our general reading of the problem has been close. We propose to liaise with Alain Juppe about this matter and I hope we will be able to reach a concordat, that meeting will take place next week.

    QUESTION:

    There are two known areas where there is a degree of disagreement between France and Britain, two known areas connected in part with the European Community, the first is the social aspect by which I mean Britain’s known refusal to accept the social facet of the building of Europe and the second is connected to the GATT negotiations, are the British and French positions getting closer together or are they still as far apart?

    PRIME MINISTER:

    I think understanding of the positions is certainly getting greater in both those instances. If I can say a word about the social aspect of Europe, the social structure and in particular the social charter which presumably is what you have in mind rather than the other social elements of the Community. If you mean the other social elements, the British contribution to them and the British acceptance to them is as great as any other country in Europe. But if you mean the social charter, it is certainly true that we do not favour the social charter, not as a position of ideology, I believe the social charter is mis-named.

    It has a nice friendly ring if you call it the social charter. If you were to call it a potential job destruction charter I do not suppose it would be as popular across Europe and yet that is what I believe it to be. We in Britain have a different social structure from some of our partners in Europe and clearly therefore we have a different perspective on the social charter.

    But let me put the point specifically about the social charter. The social charter will add to the employment costs of people in Europe. If it adds to the employment costs it must mean one thing above all, there will be less jobs in Europe. We have between 17 and 18 million European citizens unemployed. I just ask the question: is it sensible when you have 17 – 18 million citizens unemployed, to add to the social costs of employment? I think you will just add to the number of people who are unemployed. That is the first point and the first reason that Britain opposes the social charter.

    The second reason is a European reason as well. Europe as a whole, all of it, faces much greater competition these days with Japan, with the United States, with the countries of the Pacific Basin. In a shrinking world for trade purposes we have to compete against those countries. If we, right the way across Europe, add to the social costs of employment and production we will diminish our capacity to win in those markets of the world, we will pile social costs on our employers and we will lose their markets to the Japanese, to the Americans and to the Pacific Basic countries.

    And I ask again: is that a sensible thing to do with 17 – 18 million Europeans unemployed? I have to tell you bluntly that I do not think it is sensible and it was for that reason that I argued so strongly at the Maastricht Council for Europe as a whole not to adopt the social charter, I do not want to see Europe as a whole put itself at a disadvantage to the rest of the world and I believe that is what it is doing and I believe you see that in unemployment right the way across Europe. It is emphatically not a question of saying let us not give new rights to workers. It emphatically is a question of saying let us get more workers back into jobs that they can stay in because the European industries can compete. That is why I argued against the social charter in Maastricht, why I would not accept it in Maastricht and why I still say for Britain and for Europe it is wrong, it is a disadvantage, the time for it is not yet right.

    On GATT, I very much want to see an agreement on the Uruguay Round, it has to be a fair agreement, I understand the difficulties that France faces. The GATT agreement extends across the whole range of industry and commerce, agriculture where I understand the difficulties in France, but there are many other industrial and other areas where a GATT agreement is very much in favour of Western Europe, very much in favour of jobs in Western Europe, prosperity in Western Europe, growth in Western Europe. And we have to find a way through this GATT tangle to reach a satisfactory settlement I believe within the terms of this year.

    If I may offer you a second reason for pushing ahead for a GATT agreement it would be this. What is one of the characteristics of Britain and France? One of the characteristics of both our countries is that we are very generous with overseas aid to countries with whom we have had a long-standing relationship. We are prepared to use a great deal of money from our own taxpayers’ revenue in order to assist those countries with direct aid.

    What on earth, what on earth is the purpose of giving them aid with one hand and not agreeing a GATT agreement that opens our markets to their products with the other? It is counter-productive. We may salve our consciences by giving them aid and we leave them in a position where they are a perpetual recipient of aid whilst denying them the opportunity of coming into our markets and make their prosperity, on their terms, for their future.

    Unusual for politicians to talk about morality maybe these days but I do not believe that is a moral policy and I think we should seek a GATT agreement for that reason. There are difficulties still in reaching a GATT agreement, they are not just French difficulties, I know France has difficulties with the Blair House Agreement, other countries have difficulties as well, the Japanese have difficulties, the Americans have difficulties with different aspects of the deal. I simply say that we need to continue to talk. Year after year we have gone to the G7 or some other great conference of Heads of Government and collectively agreed that we were going to have a Uruguay Agreement by the end of the year and year after year it has failed. I just think it is time that we actually reached a conclusion. It will to a greater or lesser extent be uncomfortable for all of us, including my country, but when you look at the recessionary situation around the world, particularly in Western Europe, and one looks at the difficulties that need to be faced, I think we all have to enter those talks with the determination of making them succeed. And in saying that I do not for a second under-estimate the difficulties that face France, I understand them, I just say collectively we must look and see how those can be solved across agriculture and elsewhere.

    QUESTION (David Buchan, Financial Times):

    Just two questions, one to follow up on GATT. Prime Minister Balladur said that you had agreed that your officials should put their heads together to try and advance agreement on GATT. Was that his initiative and what concretely would that mean? Would it be mainly focused on the agricultural side where he complimented Mr. Gummer’s help?

    PRIME MINISTER:

    It followed on from the co-operation at the Agriculture Council that led to the agreement – which I hope will soon be clear is genuinely an agreement on oil seeds – just the other day. There was a great deal of Anglo-French co-operation. It advanced a cause that seemed lost.

    Maybe we can extend that co-operation in other ways. There is, as I indicated at the outset, a good deal more Anglo-French bilateral work on a range of subjects than most people perhaps realise and what we want to do is to look at the component parts of GATT. You can’t agree GATT by talking in generalities; you have to get down to the specifics. This is a “nuts and bolts” agreement. Everyone, to a greater or lesser extent, is hurt by the GATT agreement in one form or another. We need to look at those sore points and see whether we can find a way round them and I have great admiration for the diplomatic and political skills of the French and I believe we have quite a lot to offer in that respect as well so all we have agreed over our meeting this morning – and it followed on from the agriculture meeting – is that we will look together at these problems and see if we can identify a way ahead. we are not seeking a bilateral fix. Let me make that clear. We are pooling our resources to see how we can advance the general trend towards a satisfactory agreement.

    QUESTION (David Buchan, Financial Times):

    A quick follow-up: Prime Minister, you talked about this being a day for long-term planning. If this Anglo-French rapprochement were to continue until 1996, which is perhaps rather an ambitious hope, would you hope that in that year when there is supposed to be another intergovernmental conference in the Community, that this would help shape the agenda for that conference?

    PRIME MINISTER:

    I don’t know why you think 1996 is an ambition. Unfortunately it is the disagreements that are magnified and the agreements that are not magnified but we have actually been working together for generations. I know British and French attitudes are perhaps marked by William the Conquerer coming over to Britain with a certain degree of malice aforethought and Henry II coming to France to conquer half the country and marry the rest but that was, frankly, rather a long time ago and we have been working together across a whole range of issues.

    The rapprochement will go on. We have a mutuality of interests. That is real politics apart from the fact that it is something we would both wish to do. What that doesn’t mean is that we are going to agree on every subject – of course it doesn’t. There are even disagreements sometimes within individual countries as we have all seen. Of course there will be disagreements but the determination to look where we can at areas of common interest and see a way ahead I think will continue up to and way beyond 1996 and of course we will be discussing with our friends in Paris and also other friends in the Community what the agenda should be for the next intergovernmental conference. We are working on that subject now and I believe everybody else will be too.

    QUESTION:

    Prime Minister, it seems in fact that you have now a new relationship between Paris and London and mainly on the question of Europe and the shape of Europe. Could you give us some details of that? M. Balladur this morning said that the two administrations will work closely now.

    PRIME MINISTER:

    You are wrong in thinking it is just European matters, it isn’t.

    There is a good degree of co-operation in international affairs, Bosnia for example, Russia for example; all the matters that go through the Security Council at the United Nations, the subject of increasing bilateral discussions between the United Kingdom and France. There is a very close defence relationship; we have worked together on a variety of defence projects; that remains the case; it will remain the case in the future. Britain and France are the only two nuclear powers in Western Europe. There is a good deal of collective work that we have done on that so there is a whole range of issues. The Channel Tunnel is a very practical expression of that.

    It isn’t just the development of the Community. Both France and Britain must work to a greater or lesser extent with all our Community partners on that but it is across a wide range of issues that we are seeking to develop perhaps further than it has gone before the relationship that exists between France and Britain.

    Of course it involves European matters. We are both keen on making sure we get the right extension of the European Community, that we have the right arrangements when the new countries come into the European Community, that we look collectively at what actually happens after the 1996 meeting that we will have to refresh Europe and move forward. Of course we are looking together at all those things. We both have a very direct interest in it.

    QUESTION:

    Mr. Prime Minister, one of the fruits of Anglo-French co-operation has been this Washington agreement. This agreement has been rather received by the other European partners on two levels: one is that it is a way of promoting a kind of apartheid or bantostar in Bosnia; the second is that they didn’t like hearing about it on the radio without any prior consultation. We are talking about common foreign and defence policy. How do you react to this criticism to the Washington agreement?

    PRIME MINISTER:

    I think a good deal of the criticism of the Washington agreement has been very ill-informed, to be blunt. The Washington agreement is an action plan. The Washington agreement is not a settlement that freezes the Serb gains and says they can keep them. It emphatically is not that. It is an action plan about how in practical terms we can develop policy. The objective of making sure that sanctions continue and that other policies continue until such time as the Serbs disgorge their gains continues so there is no change in that as Douglas Hurd has made clear, as M. Juppe has made clear. What it is is a practical way in which to proceed.

    As to the concerns of other European members, what they agreed there was entirely in line with previous discussions there had been amongst the Twelve so I think the criticism that we have heard from that quarter is more based on inaccurate reports than accurate substance. I reiterate the point: emphatically not a settlement; emphatically not rewarding the Serbs for the present position; emphatically making it clear that this is the way that it is practicable to proceed in the short-term and that in the long-term we do not expect and do not wish the Serbs to keep their ill-gotten gains and that diplomatic and political pressure, sanctions pressure, is expected to continue and will have the full support of the British and French perhaps for a very long time ahead.

    QUESTION (Nelson Grays, Reuters):

    Could you tell us exactly how France and Britain could strengthen their relations in the military realm and especially as regards nuclear?

    PRIME MINISTER:

    Nuclear is more delicate for me to discuss here and we will need to have a great deal of discussion about that but we have had a good deal of military co-operation on the construction of military equipment and other matters in the past.

    As military demands change – and they are changing at the moment in the 1990s – we may increasingly have to look across the Western European Union, across NATO, making sure that nations do most what they do best and that does mean we have a particular responsibility to look between Britain and France in the interests of Western Europe in particular at their contribution to NATO, at the right degree of co-operation between them. Joint exercises are the sort of thing we have done for a long time; the possibility of constructing joint frigates. These are all matters of co-operation that would be both in our military interest and very probably, subject to examination, in our financial interest as well and those are the sort of things we will wish increasingly to examine.

    QUESTION:

    You said that you had met with Prime Minister Balladur and indeed then with President Francois Mitterrand and I would like to know your views of this peculiarly French phenomenon known as “cohabitation”.

    Secondly, regarding Franco-British economic co-operation, you know that the Channel Tunnel is of signal importance to France and to the French. I would like to know what Britain’s intentions are in that connection and in particular mention has been made of the possibility of France even investing in British railway networks.

    PRIME MINISTER:

    As far as cohabitation is concerned, I don’t find that a strange prospect at all. The Conservative Party have been cohabitating on the Maastricht Treaty for the last few months so I see no particular difficulty in the cohabitation you have had in France.

    On the question of the tunnel and the development of railway networks, we have decided that we will develop the railway network. I know President Mitterrand indicated delicately and with great charm that our trains might go a little more slowly perhaps than his. I would simply say we have some very lovely country to look at while they go slowly and I look forward to the development of those trains between now and the turn of the century and I am very delighted the decision has been made that we will proceed with the development.

    I wasn’t aware of the suggestion of French investment in those railways but perhaps that is a suggestion that has been made this side of the Channel rather than the other side.

    QUESTION (John Sergeant):

    You said this morning that there will be no change in the government’s approach both to the ERM and to possible future cuts in interest rates but if there has been no change in economic policy and if that is not your intention, why did you change the Chancellor and what did you make of the fact that he did not send you a traditional resignation letter?

    PRIME MINISTER:

    The position on economic policy generally has been set out quite clearly and that doesn’t change with a change of personnel. It is no more likely to do that than the government’s desire for a home-owning democracy which has been there for generations will have changed with successive Environment or Housing Ministers; of course it doesn’t change.

    The policy carried out by the Chancellor is the government’s policy, has been and remains the government’s policy. It has been set out and articulated by Chancellors – very well articulated by Norman Lamont – and endorsed before he became Chancellor by Kenneth Clarke. That continues.

    It is always necessary from time to time to refresh a government, to change it round, to put the right people in the right jobs, to push forward the agenda for the next few years, to make sure that is done as effectively as possible and that is the purpose of any reshuffle not least this one.

    Secondly, as to why particularly now: we are about to begin discussions that move towards the first unified budget, a very dramatic change in British budgetary procedures, and it is necessary to have a new Chancellor in place to see that right the way through the preparation and presentation in November of the first unified budget. It takes a lot of work, it takes a lot of decision and it seemed therefore the right time to do it before those discussions actually commence.

    The third reason of course is that I have in my Party a lot of talented people who have not yet served in government, who have a great deal to offer my country, who deserve the chance actually to serve in government. I wanted to bring those into the government as well as giving a lot of Ministers outside the Cabinet predominantly, but some inside the Cabinet, the chance to widen their experience and look at other portfolios. I think it is in the general interest to make sure that they do that, that they have the widest possible experience because I think that helps in conducting policy in the particular Department in which they have responsibility.

    Those essentially are the reasons for the reshuffle.

    Regarding the letter, I think that is a matter for Norman but I don’t think it can be very surprising, can it? I know Norman very well. He is a good friend of mine, he has been a good friend of mine for a very long time. We have worked closely together, we have shared the same policies, we have shared the same hopes, we have shared the same dreams about getting inflation down. He has taken a great deal of criticism as Chancellor – as any Chancellor of the Exchequer would have had to do over the last two years. He has taken very bravely with a great degree of courage a great degree of criticism. The fact that it has been necessary to make a change I understand must be very hurtful to him. Even politicians are human. I quite understand the fact that he wants a little bit of peace and quiet at the moment and I hope he’ll get it.

    QUESTION:

    Could I just ask whether you have a feeling of relief now that you have finally got what must have been a reluctant reshuffle out of the way and will your new Chancellor now have the option of considering possible changes in Norman Lamont’s last budget and specifically the VAT on home heat fuel?

    PRIME MINISTER:

    I don’t anticipate the present Chancellor changing what was in the budget that was approved by the Cabinet of which he was a member. I don’t anticipate changes in that regard, no.

    With regard to the sense of relief, tomorrow is always more important than yesterday. There are difficult decisions, difficult things to be done every day. There have been in the past. I have no doubt there will be other difficult decisions next week, next month and the month after – that is the business of government.

    QUESTION (Libby Viner, ITN):

    I would just like to ask the Prime Minister in what way you think Norman Lamont’s departure will restore credibility to your government if in fact he was following exactly the same policies that the government as a whole wanted to follow including yourself?

    PRIME MINISTER:

    It is necessary sometimes to refresh the look of the government, to have a fresh face to look at things, to move the agenda forward. If one didn’t do that, one would never make any changes in government and I don’t think that is a credible position so have nothing more to say about that.

    QUESTION (Libby Viner, ITN):

    Do you think it was unfortunate, though, that the world heard of it from Mr. Lamont’s mother?

    PRIME MINISTER:

    It is the reality, not the form in which they heard of it, that really matters, isn’t it?

    QUESTION (Philip Johnstone, Daily Telegraph):

    Beyond being a fresh face, what other qualities does Kenneth Clarke bring to the Treasury that the previous Chancellor lacked?

    Secondly, you say you wanted to refresh the government but by my reckoning you only brought four new Ministers into the government – two others have been Ministers before. Are you anticipating further changes in July at middle-ranking level as well?

    PRIME MINISTER:

    No, I am not; no, of course I am not. I brought back some people who had talent who served in the government before, who lost their seats in Parliament and have now come back. They are still men who have a lot to offer the government and I was delighted to be able to bring them back. I think they will make a great contribution. I was able to bring in at the junior ranks of government and promote from one rank to another rank a number of people with very distinct potential for the future but refreshing the government is more than just bringing new people into the government. It is giving people in government who worked in a particular portfolio the opportunity to go and exercise their talents on another portfolio with the special advantage of the experience they have gained in their first Department. There is nothing fresh or novel about that. That is the way governments have been operating for as far back as we can trace and it is the right way in order to develop political policy and that is what I did in the reshuffle.

    QUESTION (Judith Dawson, Sky News):

    I didn’t want to disappoint you by not speaking about the polls and the polls aren’t looking frightfully good for either yourself as Prime Minister or for the government. Do you really believe that what you did yesterday will do the trick?

    PRIME MINISTER:

    The two things are not related and if I may say, Judith, I seem to remember you saying the polls didn’t look very bright for me four days before the last general election.

    QUESTION (Judith Dawson, Sky News):

    Neither did they! [Laughter]

    PRIME MINISTER:

    Remind me of the result! [Laughter]

    QUESTION (Jane Martenson, South Wales Echo):

    Prime Minister, what good will the appointment of John Redwood do for Wales and does his appointment mean a shift in policy for the region?

    PRIME MINISTER:

    No, it doesn’t. In John Redwood, what I have done is given Wales an extremely talented politician who I believe will fight very hard for Wales. I think the important thing in any Secretary of State’s position is to find someone who has real ability in order to carry out that particular job. John has a wide range of experience across government already. I believe he will bring that experience whole-heartedly to the interests of the people of Wales and I think he will do an outstanding job.

    The first priority, frankly, in choosing people for any Cabinet is to choose people of very great ability. John Redwood in my judgement has very great ability and I think he will be of immense service to the people of Wales.

    QUESTION (Paul Webster, The Guardian):

    Just a very simple question.

    PRIME MINISTER:

    If only I had known! [Laughter]

    QUESTION (Paul Webster, The Guardian):

    Do any of your Cabinet speak French?

    PRIME MINISTER:

    Yes.

    QUESTION (Paul Webster, The Guardian):

    Any of these new people? Does the new Chancellor speak French?

    PRIME MINISTER:

    I am not sure about the new Chancellor speaking French. I do know that Mrs. Shephard, for example, is as bilingual – and maybe even trilingual – as anyone else in this room.

    QUESTION (Paul Webster, The Guardian):

    It is a curious thing that after so long in Europe that we have to have an interpreter for the Prime Minister.

    PRIME MINISTER:

    Do you speak French?

    QUESTION (Paul Webster, The Guardian):

    Of course I do!

    PRIME MINISTER:

    Excellent! Congratulations! [Laughter]

  • Mr Major’s Comments on the Social Chapter and the ERM – 26 May 1993

    Below is the text of Mr Major’s comments on the Social Chapter and the ERM, made in London on 26th May 1993.

    QUESTION:

    [The Prime Minister was asked if it was the situation that he disliked the ERM, the Social Chapter and wanted a Europe a la Carte?]

    PRIME MINISTER:

    No it is not, but neither are we in favour of a prescribed Europe a la Carte, prescribed from the centre. Can I take those three issues separately. Why do I oppose the social chapter? It sounds very friendly, does it not, the social chapter? If you called it what it really is – an employment destruction chapter – I do not think it would have the same support across Europe and yet that is what I believe the social chapter to be. There is a second reason. Europe does not just compete within its own boundaries, Europe as a whole has to compete with Japan, with the United States and with the Pacific Basic countries, that is very tough competition. If we pile extra costs on our employers so that we pile extra costs on their products so that they can make a profit, we will make Europe uncompetitive. If we make Europe uncompetitive we will damage the whole of Europe – that is my argument against the social chapter, it is damaging in a highly competitive world to the competitiveness of Europe and that damage will cost us jobs. we have in the European Community nearly 13 million European adult citizens without work, that is far too many, it is not sensible to add to that by imposing at this moment fresh costs on employers that will cost us jobs. That is why I oppose it, I think it is wrong.

    On the Exchange Rate Mechanism, I entered the Exchange Rate Mechanism because I have a passionate dislike of inflation, inflation wrecks jobs, wrecks countries, wrecks lives, I loathe it. We left the Exchange Rate Mechanism through force majeure, it was not a matter of choice, the market overwhelmed us and we left. It might have overwhelmed the Franc if it had been a reserve currency with as many non-resident holders of the Franc as there are non-resident holders of sterling, all able to sell in a market panic. The Franc thankfully did not face that problem and I am pleased about that, but we did and we had to leave. To say that there are no difficulties with the Exchange Rate Mechanism is really to fly in the face of logic, it seems to me. Sterling was tossed out of it, in Spain, in Portugal, in Italy there have been very real problems. One of the problems was that the Exchange Rate Mechanism, which was a flexible instrument, became a very rigid instrument as countries moved towards a single currency, it was too rigid and it broke in our hands and I think we have to look at the way in which it works before I could take sterling back into the Mechanism.

  • PMQT – 25 May 1993

    Below is the text of Prime Minister’s Question Time from 25th May 1993. Tony Newton responded on behalf of John Major.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Mandelson : To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.

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

    My right hon. Friend the Prime Minister is attending the unveiling of a memorial statue to Field Marshal Viscount Alanbrooke by Her Majesty the Queen, as is, I understand, the Leader of Her Majesty’s Opposition.

    Mr. Mandelson : Given that a system of charging for hospital beds would be a tax under which the longer one was ill the more one would have to pay, and given that it would destroy at a stroke the principle of a national health service free at the time of need and point of use, will the right hon. Gentleman give a categorical assurance today that the Government will never force NHS patients to pay charges for NHS beds?

    Mr. Newton : I can best point the hon. Gentleman to what was said in our manifesto : that need, not ability to pay, is and will remain the basis on which care is offered to all in the NHS. As my right hon. Friend the Prime Ministers said in an interview in one of this morning’s newspapers, we shall honour our pledges both in the spirit and the letter.

    Madam Speaker : Mr. Patrick Nicholls.

    Mr. Newton : While I am at it, may I just say– [Interruption.]

    Madam Speaker : Order. I apologise. I had not appreciated that the Leader of the House had not completed his reply.

    Mr. Newton : That is entirely understandable, Madam Speaker. I simply wanted to add that it was good to see the hon. Member for Hartlepool (Mr. Mandelson) back from his triumph in masterminding the loss of Labour’s deposit in Newbury.

     

    Q2. Mr. Nicholls : To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.

    Mr. Newton : I have been asked to reply.

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

    Mr. Nicholls : Now that the Maastricht Bill has received its Third Reading, will my right hon. Friend take this opportunity, and indeed every opportunity, to tell the people of Britain that the Maastricht treaty is a move away from federalism, not a move towards it? It is the Liberal and Labour parties which are self-confessedly federalist and the Conservative party which is not. Is not this a treaty which gives us the opportunity to co-operate with other nation states, to the benefit of this country, which has always been the policy of the Conservative party?

    Mr. Newton : My hon. Friend is absolutely right. By enshrining subsidiarity and co-operation between states, the Maastricht treaty will move us to a much less centralised Europe. That is a major achievement and a great gain from the British point of view. As for the Labour party, it has, to my recollection, had seven different policies on Europe in the time that I have been in the House and the Opposition appeared to be changing their minds again even last week.

    Mrs. Beckett : The Lord President quoted the Prime Minister on the manifesto pledges of the Conservative party. Does he recall the pledge not to increase national insurance contributions–broken? Does he recall the pledge to maintain mortgage interest relief–broken? How does he square all that with what the Prime Minister said yesterday?

    Mr. Newton : My right hon. Friend made the position absolutely clear in his answer last week, in setting out the Government’s intentions to review public expenditure against the background of the pledges that we have made and the need to protect the most vulnerable. If the right hon. Lady disagrees with that, perhaps she would care to tell us whether she is disowning, in his absence, her right hon. and learned Friend’s statement that we should be prepared to re-examine everything and that he has not ruled anything out.

    Mrs. Beckett : The Leader of the House and his party kept talking about taking tough decisions. When will the Government take the tough decision to admit even the smallest share of the blame for the state to which this country has been reduced–never mind the price the Government are asking the British people to pay?

    Mr. Newton : When it comes to talking about the price that the British people must pay, the hon. Lady must count as some kind of expert. I have been looking back at something said by her hon. Friend the Member for Eccles (Miss Lestor) some time ago :

    “I will not take lessons in Left wing unity from Margaret Beckett. She was the person who went into the 1976 Labour government to implement the cuts over which I had resigned.”

    [Interruption.]

    Madam Speaker : Order. Hon. Members must resume their seats.

    Mrs. Beckett : The Lord President knows full well that the Government went into the general election campaign promising tax cuts and public expenditure increases. Is not the most fundamental problem that Britain faces today the fact that it has a Government whose dishonesty is exceeded only by their incompetence?

    Mr. Newton : What I know is that the Government are approaching their difficult task in a responsible and considered way and that they are not going to get into the position that led the right hon. Lady into the problem that I have just quoted–the IMF coming here telling the Government what to do.

    Mr. Butterfill : Will my right hon. Friend confirm that the Government’s priorities in the European Community will, in the foreseeable future, be to secure the entry to the Community of our former partners in the European Free Trade Association, notably the Scandinavian countries and Austria, and to facilitate the arrangements that the Community makes with the countries of eastern and central Europe?

    Mr. Newton : My hon. Friend makes a good point. We have a number of important tasks in the Community, including carrying forward the concept of subsidiarity. Among the most important tasks and among those on which we have made the most gains in recent months is that of enlargement, to embrace exactly the countries to which my hon. Friend refers.

    Mr. Ashdown : Can the right hon. Gentleman categorically assure the House that no Government agency was involved in any way in coaching witnesses from Walter Somers before they appeared before the Select Committee looking into the Iraqi gun affair?

    Mr. Newton : The right hon. Gentleman well knows that all these matters are the subject of an inquiry by Lord Justice Scott. The most appropriate course for Ministers and other hon. Members is to allow that inquiry to conduct its proceedings properly.

    Mr. Duncan Smith : Does my right hon. Friend agree that last week’s Audit Commission report on the chronic mismanagement, waste and incompetence of Lambeth council painted a grim picture of Labour in control of councils? Does he further agree that it is a bit rich when the deputy Leader of the Opposition talks about the Government displaying incompetence and dishonesty when Labour has a record like that?

    Mr. Newton : I was indeed pretty horrified to hear details of that Audit Commission report on Lambeth council, although not entirely surprised in view of its socialist record of incompetence and waste, which is well known on both sides of the House. It reminded me, once again, of that immortal quote from Tribune last May :

    “Ineffectual or rotten Labour councils have been a feature of political life for as long as anyone can remember.”

     

    Q3. Mr. Gordon Prentice : To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.

    Mr. Newton : I have been asked to reply.

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

    Mr. Prentice : Is the Lord President aware that the first passenger train that ran in England between Liverpool and Manchester achieved a top speed of 29 mph? That was in 1829. Is not it disgraceful that 164 years ago a train could achieve a higher speed than the train currently running between Nelson and Colne in my constituency? Is the Lord President further aware that I have a letter from the chairman of British Rail which says that the 20 mph speed restriction will be permanent because of cuts in Government funding?

    Mr. Newton : Somewhat to my surprise–I had not anticipated that the hon. Gentleman would seek to be so helpful–that seems to be the best argument I have heard for some time for the rapid passage of the Railways Bill, which is before the House today.

     

    Q4. Mr. Fabricant : To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.

    Mr. Newton : I have been asked to reply.

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

    Mr. Fabricant : Will my right hon. Friend confirm that subsidiarity can be applied retrospectively as well as prospectively and that that means that any European legislation which has been laid before the House and which we have had to rubber stamp since 1986 can–if it meets the subsidiarity test–be either amended or swept aside?

    Mr. Newton : My hon. Friend is right. The Commission is reviewing existing European Community law. At the Edinburgh Council it presented some 32 examples of legislation which should be either withdrawn, amended or re- examined, or further proposals that should not be pursued. That review is continuing and a full report is scheduled for the European Council in December this year. It is our intention that those items to which subsidiarity applies should be amended or repealed.

    Mr. Sheldon : In regard to the Government’s intention to reduce the budget deficit, we have heard from Minister after Minister that nothing is ruled out, yet we have heard nothing about increasing the higher rate of tax. Should not that be ruled in?

    Mr. Newton : It is not only from Ministers that we have heard that. As I reminded the right hon. Member for Derby, South (Mrs. Beckett), that is what the Leader of the Opposition is saying, too. That is the sensible way in which to approach these matters and that is the way in which the Government are approaching them.

     

    Overseas Aid

    Q5. Mr. Luff : To ask the Prime Minister if he will make a statement on the Government’s policy on the relative importance of trade and aid in assisting the economic development of the poorest nations.

    Mr. Newton : I have been asked to reply.

    Worldwide trade liberalisation and measures to encourage the private sector are critical for developing countries, but many countries, particularly the poorest and most vulnerable, will continue to need concessional finance for the foreseeable future. Further debt reduction along the lines of the proposals that my right hon. Friend the Prime Minister made in Trinidad in 1990 will also be required for the poorest, most heavily indebted countries.

    Mr. Luff : I thank my right hon. Friend warmly for what he has just said. Does he agree that the major objective of our aid policy should be to encourage the promotion of private sector enterprises in the developing world? In that context, will he pay tribute to the work of the Commonwealth Development Corporation? Does he further agree that we have a fine record as a Government for fighting for free trade, which brings advantages to the developed and the developing world? Can he give an assurance that that fine record will be enhanced at the G7 summit in Tokyo in July this year?

    Mr. Newton : Certainly I acknowledge, as I think the whole House would, the leading role that my right hon. Friend and other colleagues have played in advancing the cause of free trade and the successful outcome to the GATT round. My hon. Friend is also right about the part played by the Commonwealth Development Corporation which is the main instrument in our aid programme for the direct promotion of private investment in developing countries. As it happens, United Kingdom direct private investment in developing countries was estimated to be some £3 billion in 1991. That is half the overall total for the whole European Community. It is a record of which we can be proud.

    Mr. Worthington : If the Minister is in favour of free trade, when will we abandon the practice of demanding that developing countries drop their import tariffs and when will we stop dumping subsidised CAP food on them?

    Mr. Newton : The hon. Gentleman will be aware that the Government have always taken the view that trade is as important as aid in advancing the circumstances of developing countries. I think he will agree that we have a better record than many in promoting those objectives.

  • PMQT – 20 May 1993

    Below is the text of Prime Minister’s Question Time from 20th May 1993.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Bennett : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

    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. Bennett : Does the Prime Minister recall his big idea of the citizen’s charter, aimed at giving individuals swift redress? Can he explain why veterans of the atomic tests which took place on Christmas island and elsewhere over 30 years ago, who suffered the horrendous effects of radiation, have still not received compensation? People in the United States who suffered in a similar way have been compensated. The Prime Minister assured the House as long ago as 4 December 1990, in reply to the right hon. Member for Worthing (Sir T. Higgins), that the matter was to receive his urgent attention.

    The Prime Minister : Yes. About 10 days ago I wrote again to my right hon. Friend the Member for Worthing and other hon. Members who expressed an interest in the matter. We are still waiting for medical reports on which we can make our judgments. I have sought to have the medical reports expedited, but there is further examination to be done. As soon as these medical reports are received we can reach a decision.

     

    Q2. Sir Peter Tapsell : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

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

    Sir Peter Tapsell : Following his statement yesterday, can my right hon. Friend confirm that, contrary to earlier interpretations of the Maastricht treaty and its protocols, he is now advised that the opt out from monetary union extends to the exchange rate mechanism and that Britain has no obligation, under the terms of the treaty, to re-enter the exchange rate mechanism unless and until we decide to seek to enter a single European currency?

    The Prime Minister : Yes. In essence my hon. Friend is quite right. I have had no fresh advice, but that has always been the position. Nothing in the Maastricht treaty obliges us to rejoin the exchange rate mechanism. What the treaty does is make it explicitly clear that we retain responsibility for monetary policy in stages 2 and 3 of economic and monetary union as long as we do not participate in a single monetary policy. As my hon. Friend knows, because of the opt out that I negotiated at Maastricht, we would not enter into a single currency until and unless the House had specifically approved it.

    Mr. John Smith : Can the Prime Minister give the House a guarantee that the Government will not make millions of pensioners and children pay for prescriptions?

    The Prime Minister : I had optimistically thought that the right hon. and learned Gentleman might welcome a third successive fall in unemployment, but I should perhaps have known him better. May I explain to the right hon. and learned Gentleman–so that there is no doubt either to him or millions of people throughout the country–exactly the review that is taking place on public expenditure? My answer to every scare story that the right hon. and learned Gentleman produces will be the same–I hear that he was peddling them earlier today. My right hon. Friend the Chief Secretary to the Treasury has been instructed to examine all our public expenditure to ensure that it is well targeted and that it delivers value for money, and to see where savings in taxpayers’ money can be found. However, he knows that in doing so he must protect the position of the most vulnerable members of society, and that is what he is doing. At the moment, my right hon. Friend is being presented with options. He has not yet considered the options or selected those worth further consideration.

    No decisions have been made, and no decision is imminent. Decisions will not be made until the public expenditure round in the autumn. Many options will need to be discarded, but we need to examine public expenditure, and we shall both maintain our manifesto commitments and protect the most vulnerable people in society. Perhaps the right hon. and learned Gentleman will now give up his tedious weekly shroud waving.

    Mr. John Smith : I should have known better than to expect a straight answer from the Prime Minister. No one in the country will know whether his answer means yes or no. The Prime Minister talks about his manifesto commitments; may I remind him that millions of ordinary families are already deeply worried about having to pay another £8.50 per week next year and even more the year after, despite his tax pledges. Now families face the threat of an additional tax on being ill. Why are the Government so intent on making ordinary families in this country pay the price of their economic incompetence?

    The Prime Minister : The right hon. and learned Gentleman really should not peddle those scare stories and frighten people. I have made it absolutely clear that we shall protect vulnerable members of society. “We should be prepared to re-examine everything ; I have not ruled anything out”– [Interruption.] Those are not my words but those of the right hon. and learned Gentleman when he was speaking about his review of social policy.

    Mr. John Smith : Just over a year ago the Prime Minister promised lower taxes and no cuts in public expenditure. We know that he has broken one promise already, and clearly he is planning to break another. Is it any wonder that no one any longer believes anything that he says?

    The Prime Minister : The right hon. and learned Gentleman should stop trying to frighten vulnerable people for his own party advantage. I say to him in all friendliness that it will do him no good in the end. We shall honour our manifesto commitments. Since the general election the right hon. and learned Gentleman has publicly junked all his manifesto commitments. The contrast is obvious, and the public will know which party keeps its promises, for its members sit here, and which party seeks week after week to frighten people with scare stories, for its members sit over there.

     

    Q3. Mr. Kynoch : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

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

    Mr. Kynoch : Will my right hon. Friend confirm that the seasonally adjusted unemployment figures show a further fall this month, for the third month in a row? Does he agree that that is a further welcome sign that the recovery is starting to work through to where we all want to see it, in the job-centres and in a meaningful and stable reduction in unemployment?

    The Prime Minister : Yes, that is welcome to everyone. There are those who mention unemployment when it is going down as well as when it is going up. Unemployment is still too high, but today’s figures offer further hope for unemployed people. Not only has unemployment now fallen for the third month in a row, but the number of people employed in manufacturing industry has risen for the third consecutive month, and the number of new vacancies notified to job-centres is more than it was a year ago. If the hon. Member for Holborn and St. Pancras (Mr. Dobson) wishes to continue with his smears, perhaps he will put up or shut up.

    Mr. Foulkes : Following the Tory party conference in Scotland, is the Prime Minister aware of the extent of opposition to water privatisation in Scotland, even among Conservatives? Will he now end the uncertainty and give a clear and unequivocal pledge that there will be no privatisation of water in Scotland?

    The Prime Minister : The hon. Gentleman has made the point that he wished to make, and he knows as well as I do that the options are set out in the consultation paper “Investing for the Future”. We are considering those options. When we have finished our considerations, we shall announce the result.

     

    Q4. Mr. Clifton-Brown : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

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

    Mr. Clifton-Brown : Will my right hon. Friend confirm his view, stated during the last election, that first-past-the-post is the best electoral system ; one which has served us well for centuries? Is it not typical of Opposition Members to want to introduce a proportional representation system–a desire reinforced by their decision to abstain on the historically important European vote this evening?

    The Prime Minister : I can certainly confirm that I remain in favour of the first-past-the-post system. I am against proportional representation, and I do not need a referendum to tell me what my view on the matter should be.

     

    Q5. Sir David Steel : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

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

    Sir David Steel : Has the Prime Minister been able to examine the workings of the community care schemes since they came into operation on 1 April? Is the confusion and anxiety as great in Huntington as it is elsewhere? Will he promise a full review of the schemes at the end of the first three months of working?

    The Prime Minister : The scheme is, with the consent of hon. Members in all parts of the House and people throughout the community care system, a great advance. People have wanted care in the community for a long time, and they now have it. It is a very substantial change. We shall, of course, keep the matter under review to make sure that it is working satisfactorily. There are bound to be some difficulties at the beginning of a change on this scale. It is a welcome change, one for which we have looked for many years, and we intend it to be a success.

     

    Q6. Mr. Harry Greenway : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

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

    Mr. Greenway : Is my right hon. Friend aware of the increasing suffocation of London by heavy traffic, which is now damaging job prospects in the capital? Will he accept the congratulations of my constituents in Ealing and of the whole of London on his determination to go ahead with the crossrail project? Will the Government do everything possible to expedite the passage of the enabling measure through the House? May we have an assurance that the construction of the project, which will bring jobs to all parts of London, including Ealing, will start yesterday, if possible?

    The Prime Minister : That might be rather difficult. Crossrail is important for London and for jobs throughout the country, and I know that it will be particularly welcome to hon. Members with London constituencies. It will be a joint venture with the private sector and my hon. Friend will be pleased to know that the Second Reading of the Crossrail Bill will take place in the House next month. Crossrail will obviously make a dramatic difference to London’s transport system, as will the Jubilee line extension, to which the Government are also committed– [Interruption.] –as the hon. Member for Newham, North-West (Mr. Banks), who is heckling, may wish to know.

    Mrs. Bridget Prentice : The Prime Minister may recall that I wrote to him on 30 March about assisted area status for London. I have since received a holding reply. He will know that if London were to receive assisted area status, the support of the Government would be needed and that 13 London boroughs, including Lewisham, would be affected. When will the right hon. Gentleman be in a position to give me a positive reply?

    The Prime Minister : I very much hope that we will be able to reach a decision on changes to the assisted areas map before too long. We are well advanced with our examination of it and are looking at the various criteria that need to be considered. I would certainly hope that we would have a decision, and announce it, well before the House rises for the summer.

     

    Q7. Mr. Nicholas Winterton : To ask the Prime Minister if he will list his official engagements for Thursday 20 May.

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

    Mr. Winterton : I warmly welcome the reduction in unemployment for the third consecutive month, for which Government policies are in part responsible. Will my right hon. Friend give me, the House and the people of this country an assurance that he will not undermine the recovery in our economy by re-entering the exchange rate mechanism? In addition, will he give the pensioners and children of this country an assurance that he will not permit prescriptions to be paid for by the retired or by the young?

    The Prime Minister : I warmly welcome part of my hon. Friend’s question : I share his pleasure at the fall in unemployment. We now have the right conditions which I hope will lead to a consistent fall in unemployment. [Interruption.] Hon. Members who are saying that the figures are a fiddle may be interested to know that the Department’s director of statistics, a civil servant, today issued a statement which said :

    “I have no reason to doubt the accuracy of the claimant count figures.”

    The hon. Member for Holborn and St. Pancras (Mr. Dobson) may sit there giggling and making accusations, but he ought not to attack public officials who are not in a position to answer back. My hon. Friend will have heard me say earlier this week that we had no imminent intention of returning to the exchange rate mechanism because the circumstances for doing so were by no means appropriate at present. As for his second question, he clearly heard the detailed statement that I made to the House some moments ago.

  • Mr Major’s Comments on the Maastricht Treaty (III) – 19 May 1993

    Below is the text of Mr Major’s comments on the Maastricht Treaty, made during an interview held on 19th May 1993.

    QUESTION:

    [Mr Major was asked whether the Maastricht Treaty would progress quickly following the Danish referendum result].

    PRIME MINISTER:

    I am certainly pleased the Danes have cleared that uncertainty up, it has been a very debilitating, very difficult period both in Denmark, right across the Community, and certainly in the United Kingdom as well. We have the third reading of the bill in the Commons on Thursday, I hope and expect it will be passed then. The bill will then move to the House of Lords and thereafter we will be able to have Royal Assent and ratify the bill.

    QUESTION:

    [Mr Major was asked if he could get the bill through Parliament given the divisions in the Conservative Party and whether he would agree to the social chapter].

    PRIME MINISTER:

    It is a very decisive issue, Europe, it has been a very divisive issue in this country ever since we first joined it, and that remains the case. To take the particular points you raised, the social chapter firstly. I was speaking last night to a large number of employers at the CBI, they are absolutely clear that without the social chapter we are in a much better position. People think the social chapter offers all sorts of social benefits. I think it really more aptly ought to be called an employment destructive chapter, and that is emphatically not what we want in the United Kingdom, I want to put people back to work, not raise impediments to them getting work, and I believe that is what the social chapter would do.

    QUESTION:

    [Mr Major was asked about Edward Heath supporting the social chapter].

    PRIME MINISTER:

    Ted is a very enthusiastic supporter of European development, I do not believe the social chapter is in our interests, I do believe it is very much in the British interest, in the British national interest, our own cold, hard self-interest to be right at the centre of the European Community. And I do not just say that for idealistic reasons. The European Community is where our exports go to, it is where most of our jobs over the last 10 years effectively were created from, because of our growth in trade where was a huge growth of small businesses and firms. We need that growth in trade, we need those jobs. I know of no-one, no-one, who has a practical alternative to Britain being at the centre of Europe using her influence. There are only three alternatives really: leave the European Community, hardly anyone is proposing that; stay in it without influence and be dragged along by the French and Germans, that is not attractive; or get in the middle of the Community, form alliances with our partners, different alliances on different issues, and try and wield real British influence in the European Community, and that is where I stand.

    QUESTION:

    [Mr Major was asked if there would be increasing pressure on Britain to rejoin the ERM and join the social chapter and whether he would fight or give in].

    PRIME MINISTER:

    I do not think it is quite as straightforward as that either way. For every member of the Community, throughout the lifetime of the Community, there have been pressures. When you have 12 nations, soon to be 16, working together always there are going to be pressures and difficulties. In order to win your way in the Community you need alliances, you need to be taken seriously, you certainly do not want to be sidelined with the rest of the Community ganging up on you, as has happened so often to this country in the past.

    What we are seeing at the moment is a fairly dramatic move towards the sort of European Community that we in Britain have always wanted and feel comfortable with, a wider Community, because of the agreements at Edinburgh the EFTAN nations will soon be joining. They will firstly be net contributors to the budget, which will save us money, and secondly they will be free traders. We have different governments across Europe, more inclined to the British point of view. We are at the moment in a better position than we have been, I believe, at any stage in our membership to start influencing the Community to go in the direction that we the British would like to see it moving.

  • Mr Major’s Comments on the Maastricht Treaty (II) – 19 May 1993

    Below is the text of Mr Major’s comments on the Maastricht Treaty, made during an interview held on 19th May 1993.

    QUESTION:

    [Mr Major was asked about the divisions in the Conservative Party over Europe].

    PRIME MINISTER:

    It is a very serious difference of view in the Conservative Party over Europe. There is absolutely no doubt about that, but I understand why that should be. This is a gut issue for the Tory Party; it runs very deep amongst people; they take a view very sharply one side or very sharply the other. They are operating from conviction. I can’t stop people operating from conviction in politics nor indeed would I wish to do so, but I think we have to proceed with the Bill. When we have concluded it, there is life after Maastricht, we will return to the other issues.

    QUESTION:

    [Mr Major was asked what he could do about backbenchers who knew they wouldn’t be promoted so may as well rebel].

    PRIME MINISTER:

    We’ve had rebellions before and I dare say from time to time we’ll have rebellions again, but one thing I’ve learned even in the two-and-a-half years I’ve been Prime Minister is that the people who are rebelling against a particular policy one week may well be your strongest supporter on another issue a week or so later. I think people are clearly distressed. I would much rather we hadn’t had this great disagreement in the Conservative Party but we have a disagreement of people with convictions that differ but we will get through that. We will conclude the Bill and then we will turn on to other issues where those disagreements won’t arise.

    QUESTION:

    [Mr Major was asked if Britain would rejoin the ERM].

    PRIME MINISTER:

    I don’t think that is imminent, no, for reasons we have set out in the past. I think we would need the economies to be much closer together than they are at the moment. Some of the major economies in Europe are at present going in different directions. That is not a Clementine to rejoin the Exchange Rate Mechanism so I don’t think that is imminent. It will be some while before we consider it.

    QUESTION:

    [Mr Major was asked that if the ERM was a pre-cursor to a single currency, whether it would be necessary for Britain to join again].

    PRIME MINISTER:

    Yes, well you say that of course when you are referring to the movement towards Economic and Monetary Union, but I think the changes that we have seen in European economies over the last two years rather bear out the reservations that I expressed at Maastricht, before Maastricht and subsequent to Maastricht. In order for Economic and Monetary Union, a single currency, to work you would need convergence of the European economies; they would need to come together. I know of no-one who thinks they have come together in recent years, quite the reverse in fact; they have moved further apart. Although the time-scale may lay on the table for Economic and Monetary Union, I very much doubt that it is realistic.

  • Mr Major’s Comments on the Maastricht Treaty (I) – 19 May 1993

    Below is the text of Mr Major’s comments on the Maastricht Treaty, made during an interview held on 19th May 1993.

    QUESTION:

    [Mr Major was asked if the Danish referendum result now meant that the Maastricht Treaty could be finalised].

    PRIME MINISTER:

    Well, I’m delighted the Danes have got an affirmative answer in their referendum but we still have to complete our parliamentary process. I don’t take that for granted. We have a third reading in the Commons, I think that will be quite satisfactory. We then have to put the bill through the House of Lords, I hope it’s back on track but no-one ever takes Parliament for granted.

    QUESTION:

    [Mr Major was asked if the European Union would slow down its pace now].

    PRIME MINISTER:

    Well, I’ve been saying for a long time, indeed I said when we had the original Maastricht negotiations, that I thought the idea of the speed that they wanted to move towards economic and monetary union was just unrealistic. I didn’t like the principle, I thought it was unrealistic then, I believe events have proved that, it is now unrealistic.

    QUESTION:

    [Mr Major was asked about Chancellor Kohl wanting to move towards European integration whilst he wanted a slower rate of change].

    PRIME MINISTER:

    Well, that is my view, it’s not a new view, it’s a view I’ve expressed right from the moment of the Maastricht negotiations. Even if one assumed that a single currency was right for Europe, and I have never made that assumption, but even if that assumption were true it is not the case that the European economies have converged in the last few years making that possible. If anything they have diverged and the prospects of moving rapidly towards European monetary union seem to me to have drifted away very substantially.

    QUESTION:

    [Mr Major was asked if some countries would achieve a single currency by the end of the decade without the UK].

    PRIME MINISTER:

    I think it is unlikely, I think it’s unlikely. You can’t categorically rule it out but I do believe it’s unlikely because it could the nature of the Community and I don’t think that would be in their interests or anyone elses.

    QUESTION:

    [Mr Major was asked if Britain would rejoin the ERM].

    PRIME MINISTER:

    It’s not an immediate prospect.

    QUESTION:

    [Mr Major was asked if there was now permanent division in the Conservative Party over Europe].

    PRIME MINISTER:

    No, I don’t believe that is the case. There are a minority in our party, a significant number of colleagues, who feel passionately about European policy. That’s always been the case. Maastricht has heightened that passion quite noticeably over the last two years, I respect their convictions even though I don’t agree with them, but the majority of my party equally have strong convictions that are different to theirs. I believe, on the whole range of different matters, the need to bring down public expenditure, the need to ensure that manufacturing recovers, that industry recovers, the need to devolve choice from government and local governments down to the individual. On all these issues and a range of others the Conservative Party are united and they will remain united on those issues.

  • Mr Major’s Speech to the CBI Annual Dinner – 18 May 1993

    Below is the text of Mr Major’s speech to the Confederation of British Industry (CBI) Conference in London, held on Tuesday 18th May 1993.

    PRIME MINISTER:

    Mr President, Ladies and Gentlemen. Before I turn in a few moments to other matters, I would just like to say a word or two about the referendum today in Denmark. Although counting is still going on, it is now clear that there is a very large majority in favouring the Maastricht Treaty. Seven out of the eight political parties were in favour, business opinion was in favour and the result of that is evident in the votes cast today.

    Before today’s result, a large question mark hung over the treaty. The Danes, initially less cautious than us, agreed to the treaty without the opt-outs that we negotiated. As you will recall, their electorate rejected that position and they needed to come back to their Community partners. We were always clear in this country that Maastricht needed the consent of all Twelve members, eleven would not do. At Edinburgh we helped Denmark secure new agreements, agreements similar to those we had obtained in the original negotiation. Today, in the referendum, this new position has been overwhelmingly approved.

    Across Europe nine nations have now ratified. Denmark and Germany can be expected to do so shortly. Only in Britain where our process has been a little protracted is substantive approval for ratification still being sought.

    Mr President, business has warned government often enough of the danger that we in Britain could sideline ourselves from Europe. And away from the sound and fury of Westminster, away from the interminable, incomprehensible procedural wrangles over the Maastricht Treaty, away from all that the issue is stark and simple, the issue is British jobs, British sales, Britain’s future.

    So we will be moving on with our parliamentary process as soon as possible. I hope we will obtain approval in the Commons at third reading on Thursday of this week. We need now to put the Parliamentary wrangles behind us and get on with doing business for Britain in Europe, developing our sort of Europe, an open Europe, a wider Europe, a Europe that liberates the talents of its businesses and its peoples, emphatically, Mr President, not a federal Europe.

    We want a competitive Community, that is why we objected to the Social Chapter, it is why we opted out of it, Maastricht without the Social Chapter, influence without handicap. Mr President, business knows that that is what this country needs, I hope, Mr President, that business will speak out and say that that is what this country needs. And the sooner we put this debilitating period behind us, the better it will be for British business and for British prosperity.

    Mr President, success, business success, your success, that is the theme that I want to concentrate on this evening, that theme and the new partnership that is emerging between government and industry. It is private enterprise that creates wealth, government’s job is to help you get the orders, not to give you the orders. We must create the climate for business to flourish, low inflation, low interest rates, low tax rates.

    In the late 1980s the economy was allowed to overheat and the government then had to cool things down. And that is the best response when there has been a mistake, to correct it and then to make sure that it never happens again. Three years ago inflation was in double figures and rising, that would have halved the value of money in just seven years. Mr President, it had to be tackled. If inflation runs on unchecked, ruin is certain. If inflation is confronted and beaten, prosperity can then be re-built.

    So that hard grind of recession had to be endured. I know that it was painful, I know that recession has left its scars. Too many businesses had to close down altogether and many others shed many jobs. We have all learned the hard lessons of those years and we must never let inflation drive Britain off its course again.

    As we speak this evening, retail price inflation is now under 2 percent, interest rates are down to 6 percent, the process of recovery has begun. We now know that recovery began slowly, cautiously, in a timid fashion perhaps in the course of last year. And now the ripples are widening through industry and along the High Street. House building and car sales are up. Your own surveys show a new level of confidence and after today’s independent poll, dare I say it, confidence is galloping.

    Now that is cause for cheer but it is not cause for complacency. Tonight we need to look to the future. So be in no doubt, I am in no doubt whatsoever, it is going to be a highly competitive decade. The economy has been picking up here in the United Kingdom but in much of continental Europe it is slowing down, trading is tough, the horizon is crowded with new challenges, new competitors, new markets, new technology.

    If we are going to look competition in the eye, we need to look at ourselves in the mirror. Our objectives must be clear. We need to broaden our recovery, widen our manufacturing base, build on our strength and remedy our weaknesses.

    So I want to pick up a theme expounded at your last CBI Conference, the theme of competitiveness. First, manufacturing matters. I want to congratulate you, Mr President, on setting up the National Manufacturing Council, a very welcome initiative, a strong single voice for Britain’ s manufacturers, very welcome, I wish it had happened years ago.

    And let me say something else about manufacturing that I personally feel passionately. I do not believe we have any reason to be defeatist about manufacturing in Britain. In the 1980s productivity in British manufacturing rose faster than in the United States, faster than in any other major European economy, more than twice as fast as in West Germany. We have increased productivity over 7 percent in the last year and we have cut our costs as well and that is the key to success, keeping quality high and costs low. And those hard won productivity gains were especially valuable, they protected Britain’s manufacturing from the worst of the recession.

    But it is true, yes, our manufacturing output fell, but much less than in the previous recession, and indeed, to put it in context, much less than it has fallen in West Germany in just the past year. But let me give you an even longer perspective than that. Look back to 1981, the bottom of the previous European recession. Since then France has increased its manufacturing output by a creditable 7 percent. West Germany has done rather better – an increase of 13 percent. But Britain, Britain so often derided for its manufacturing performance, Britain has increased manufacturing output by over 24 percent.

    Mr President, they are outstanding figures. Of course we need to do better still, much better, but my point is simply this. In the 1980s we turned the tide, in the 1990s we can catch the flood and that must be the aim for all our manufacturing industries. I believe that we can do it. There is a new mood in British industry, a new culture, a new ambition stimulated by the transformation you went through in the 1980s, industry is not just leaner these days, it is keener, it is fitter, it is more prepared to go out and fight for its markets and keep its markets, it is less inclined just to look to a home base, it knows it has to fight around the world for the markets it needs.

    And you can illustrate that perhaps in a number of ways. Last autumn you illustrated it very vividly. Last autumn you turned the spotlight on yourselves, on your own performance, you applied a critical self-analysis to the competitiveness of British industry, asking the difficult questions, facing up to the quality of the competition. Those are the actions of the confident, not the cautious. You have assessed where British industry is ahead and where it is behind. It is for each company to determine what it must do to stay ahead or to catch up.

    We have world class companies in this country, world class companies making state of the art equipment, winning in the toughest of market places around the world – pharmaceuticals, aerospace, chemicals, biotechnology, power generation, the water industry, international construction – a very long list, Mr President, but not long enough. You create the world class companies but in a thousand ways the decisions that we take in government can help you or can hinder you, so we too, the government, we are part of Britain’s competitiveness.

    Let me say this about that. All our policies, not just our economic policy, need to be focused on the future strength of the British economy. I believe that industry and government are coming to a new understanding, a new partnership. Your leadership has represented your views very clearly and equally clearly we have responded.

    In March, against a difficult background for public finances, we still managed to cut industry’s tax bill by around 1 billion pounds, and that of course is on top of the help we gave industry in the autumn statement. But I believe that the government’s side of this partnership goes much wider than simply budget changes. We, government, we must bend our energies right across the whole field of government o the pursuit of enterprise and growth and prosperity, backing Britain’s exporters, making the single market work for us in the United Kingdom, fighting for free trade, rolling back excessive red tape, rolling up our sleeves together with industry to give this country the infrastructure it needs, getting better value for taxpayers’ money, raising standards across all our schools, putting training on the fast track and harnessing our scientific genius to industry’s needs. That is an agenda right across government so that harnessed together government and business can build a new prosperity for our nation.

    Mr. President, let me say just a little more about each of those goals and I will turn first, if I may, to that crucial question of trade. We are traders in this country. We live by trade. Exports make up a third of our national income. We know above all that we need to win in the world’s market-place. Our trade deficit is substantial. Imports have risen and the recovery has only just begun. Time after time in the past, expansion at home has brought a further surge in imports whilst business has turned its back on the export challenge. Mr. President, in all our interests, that of the country, that of the shareholders, that of the businessmen, that of the future, we simply must not let that happen again and it is partly because of our concern about that that the Chancellor increased export cover by 1,300 million pounds in the Autumn Statement and the Budget. It is why we have cut the cost of export cover. It is why in this country we have got to have the best export services in the world. You, business, generously lent Michael Heseltine some of your best people to sharpen up the Department of Trade & Industry’ s export work here at home. I am grateful for that and every overseas embassy must put you at the top of their priorities and I promise you this – every embassy around the world now knows they have to put British business at the top of their priorities.

    But Mr. President, where are our export markets? They are of course all around the world but our main export market is Europe or rather perhaps it is now our home market. We have heard all about Britain selling televisions to Germany and lace to Brussels but traditional French suits to Paris, pizzas to Italy? Why not? As the old song says: “Anything you can do we can do better!” and across this country those are the sort of exports that enterprising British manufacturers are now sending abroad.

    And, of course, those opportunities are vital for us. We recognised that right from the moment we joined the European Community. That is why, whatever the difficulties, whatever sometimes the extreme difficulties, we have fought for a competitive Europe, one in which every country in the community is forced to obey the rules right across the Community and that is also why we fought to keep those rules to a minimum. It was why I was so determined to keep Britain free of the Social Chapter. The Single Market is the opportunity of a business lifetime. I don’t intend to let Brussels spoil it for Britain because our prosperity depends upon taking those opportunities.

    Of course, Mr. President, some of our European competitors complain. They don’t want Britain to become a magnet for investment, a seed-bed for growth, a haven for jobs but the answer is simple – Europe as a whole needs to keep its costs down and sharpen its competitive edge.

    Mr. President, I spoke of free trade. The need for free trade doesn’t just apply in Europe’s Single Market – it applies throughout the world – and yet for seven long years governments have been promising to complete a crucial round of negotiations to liberalise world trade. Each year, pledges have been published, each year the deadline has been allowed to slip. Mr. President, that simply cannot go on! We are past the eleventh hour and the strains are showing. Europe and the United States have twice in the past year come close to a damaging exchange of hostile protectionism that could easily escalate into a full-blown trade war. Twice, good sense and good negotiation have prevailed but only just prevailed.

    I welcome without a shred of reservation President Clinton’s commitment to completing the Uruguay Round. I believe in Leon Brittan we have the best possible negotiator. I hope Japanese Government will engage fully in the effort to secure a breakthrough on tariffs at the Tokyo summit this summer.

    Let me speak quite bluntly and frankly about this position: the test of good intentions can no longer be delayed. We need progress, not words; agreement, not dissent; decisions, not delay; we need a conclusion to the Uruguay Round and we need it this year.

    Mr. President, we need it for a raft of reasons. We need it not least of course because our manufacturers’ markets are at stake. There are huge potential gains in the GATT Round for our service industries as well but that of course is the bright side; that is the side of getting an agreement.

    There is a dark side too, the dark side of no agreement, and on the dark side the threat to our industries from so-called “managed trade”, the threat to competition from back-room deals between governments, the protectionist threat to our freedom and prosperity. All can and must be resisted until we get that agreement.

    Mr. President, I spoke of the partnership between Government and business. Sometimes, the best service Government can do for industry is not to do something but to undo something. Take regulation or rather, perhaps better, take it away! Now there is an idea for a Government service – a takeaway service, deregulation by another name.

    How many times do you hear people say: “It shouldn’t be allowed! The Government ought to put a stop to it!“ and how many times when the public presses Government to respond is the final result another form to fill, another reel of red tape, another restriction on trade and enterprise? Mr. President, business and Government must join together to fight the bias against regulation.

    So we have changed policy sharply, clearly and distinctly. In future, every time Whitehall prepares a nice little parliamentary Bill, it is going to have to tell us what the bill will be for you, what it is going to cost business to comply with the new rules proposed. The rule for Government in future is a simple one: “No Bill without the true bill!” and that I believe will help us cut down on regulation.

    But that is weed control for the future. We need to go a good deal further than that. We need to uproot the weeds that are already there choking enterprise. Michael Heseltine’s task forces of industrialists under the leadership of John Sainsbury are digging away already. We plan to legislate in the next session of Parliament to cut red tape. That means that you, business, must act fast to tell us where regulation is putting you at a competitive disadvantage, where it is excessive, where good intentions have turned into bad results but if you need it changed, tell us now and if I may be blunt again, there is no point in coming to tell me after we have presented the parliamentary Bill. I need to know soon so that we can draft changes in the Bill and make the changes that business believes are necessary.

    Mr. President, there are other ways in which we are seeking to change the old habits of Government. You often press us. Every time I see you, you rush up with Howard and grip me warmly by the throat. You often press us for further investment in infrastructure. But then you also press us to restrain public spending and borrowing. I agree. You are right, on both counts.

    Government needs to subject its services to the same severe tests you face. It is essential to keep public expenditure under control. This summer we are vigorously assessing our spending priorities. Like you, we cannot afford waste. Like you, we are market-testing our activities. Like you – in this year’s unified Budget – we are separating our capital programmes from our current spending. Like you, we must constantly be looking to see where money can be saved – where more can be done for less. And where less should be done by Government – more by the individual and the private sector.

    So let me make this request of you. As we will support you in your drive for efficiency, so we will look for your support in ours. But we can do more than back each other up. We can work together. That’s why I do not believe that the provision of infrastructure has to be restricted to the public sector. Now is your chance – in partnership – to get the infrastructure that you, the private sector, feel is important.

    Consider our history! Many of the great infrastructure projects were designed, built and funded by entrepreneurs. It was the private sector that built our canals, that laid the foundations of our railway system. More recently, it was the private sector that built the new Dartford bridge on time, on budget and very well too. It is the private sector that is behind the Birmingham northern relief road, the first privately-funded major road this century.

    We want to see the private sector fully involved in London’s Cross-rail project. We are determined to make sure the project is carried out as cost-effectively as possible and let me confirm tonight for those who may have had doubts that London Transport’s parliamentary Bill is going ahead in Parliament next month.

    Some people say that private finance won’t make a noticeable difference to our capital programmes. The City say differently. The City say that there already is something in excess of a billion pounds worth of private money available to support Crossrail and as President Reagan once memorably said: “A billion here, a billion there and pretty soon you’ re talking real money!”. The Chief Secretary says something similar from time to time! Almost every time I see him, as I recall!

    Mr. President, it isn’t just physical capital that is important. Human capital is vital too. Tomorrow’s school-leavers will not be up to the jobs you are creating if they cannot read, write, calculate or spell. Government in Britain spends a higher share of our national wealth on education than either Germany or Japan and yet a third of those going into further education still need remedial help with English to get through their courses. Forty percent need help with numbers. Poor basic skills in literacy and numeracy cost you, business almost £5 billion a year. That, frankly, is a handicap Britain cannot afford. Schools cannot be a no-go zone for accountability and they cannot be a no-go zone for testing either in the future we are building.

    We British are a common sense people. We know that tests in schools are a necessary preparation for the tests that we all face in life. Britain is tested day by day in every market around the world and I want to see British workers top of the league tables of the world and that means the right education from the very first day each and every one of our children goes to school. And beyond school as well, because I know and you know that we can only do that by training our workforce throughout their lives. Education never again will stop at the school gate on the day the pupil leaves.

    Again, we need to set the right framework for the future turning the tattered patchwork quilt of vocational qualifications into a proper banner of progress, getting the best training for the best jobs and that is what tests and training credits are intended to do but I recognise that Government’s training effort can only be a fraction of industry’s own effort. Good businesses invest in their people, train them, develop them and as a result of that, they keep them as valuable employees for a very long time.

    I would like to pay my own tribute to the CBI who played a key role in the “Investors in People” initiative and I know that many of you here this evening are among the 3,000 organisations working to meet its demanding standards, organisations that include the public sector right up to its core in Whitehall and I expect more and more to take on that particular challenge. With Brian Wolfson spearheading the drive, we are now on track to meet our target for this initiative and tonight I am delighted that Bass Taverns represented by Charles Derby this evening have become the 250th investor in people. I hope we will soon increase that number many times over.

    Mr. President, right across industry we need to turn best practice into common practice. The best help smaller arms to grow, nurture their suppliers, even pay their bills on time! They adopt partnership-sourcing. You can always tell how many small firms are in the audience! They work together to offer the best possible deal for their customers and the best possible future for British industry as a whole.

    Innovation isn’t just about technology or about science but it depends on them and our scientists today are every bit as worthy in their own particular fields as were their great predecessors like Faraday or Fleming. They can’t be trammelled to think the state decree like some intellectual short-order cook but within our science base there is a cornucopia of ideas, of invention, of ingenuity just waiting to strengthen Britain’s competitiveness. Our job as Government is to help bring the best ideas out of the laboratory and into industry and William Waldegrave who is here this evening will shortly publish a White Paper on science and technology and his aim in that White Paper is quite clear, to help maintain and improve scientific and engineering skills and then to engage them in the creation of this nation’s wealth.

    We want all those changes that I have set out this evening and others besides that time has not permitted me to mention for one overwhelming, over-riding reason: I want to see this country hungry for excellence and thirsty for achievement. Those aren’t slogans to be discarded as recovery fades the economy out of the daily news headlines; they are imperative for all our futures. We must have the confidence to compare and to compete and beat our competitors around the world and we won’t do that – we shouldn’t do it – by asking where our competitors are today or where we were yesterday. Let them ask that about us! We should ask where we want to be by the turn of the century and some of our aims are clear. We should lift our eyes beyond the immediate horizon of next week, next month, next year to look at what is going to happen during the rest of this hugely competitive decade.

    The search for high and rising productivity must be continuous. Firm control of costs is needed; a well-educated workforce ready for high-quality training is essential; an economic environment of low inflation and hence low interest rates; a wealth-creating economy, free from the burdens of over-regulation and high taxation.

    Mr. President, not one of our competitors is standing still, not one of our competitors will stand back for us. It is up to us, the people here in this room and your colleagues in business from one end of the country to the other, it is up to us, all of us in partnership, to help Britain get that step ahead and keep that step ahead and if we do it, if we can achieve it, if we can develop this new culture that you can sense happening in British industry and commerce day after day, then the prospects for our country, our future, this generation and the next are very bright indeed. We must set as our ambition to enter the new millennium at the forefront of achievement, a nation respected for what it contributes, admired for its standards and emulated for its practices. That must be the aim to which all of us must dedicate ourselves.

    Mr. President, today we are laying secure foundations for sustained recovery. Tomorrow, we must build on them as we face this hugely competitive future.