The Rt. Hon. Sir John Major KG CH

Tag: Social Chapter

  • Mr Major’s Speech to the Conservative Party Rally – 22 February 1997

    Below is the text of Mr Major’s speech to the Conservative Party Rally, held in Birmingham on Saturday 22nd February 1997.

    PRIME MINISTER:

    Introduction

    I am delighted to be here in Birmingham today.

    Birmingham is one of the great industrial cities of the world. It’s a superb shop window for the United Kingdom.

    Each year, the G7 group of industrial nations meets to discuss policy. In recent years, they’ve been joined by Russia. Next year, the United Kingdom will hold the presidency of the G7 taking over from the United States.

    I’ve decided that Britain will host next year’s G7 summit here in Birmingham. The great economic nations of the world will meet in one of the great industrial cities of the world.

    Between now and then, we must achieve something never done before – a fifth successive election victory.

    The question we’ll face is simple: “After 18 years, why 5 more?”

    Well the answer to that is easy: it’s because on all the main issues we’re right and – as usual – Labour is wrong.

    After the election the government will inherit the soundest economy Britain has known for generations.

    We built it and I intend we shall inherit it.

    The longest consistent fall in unemployment since Ted Heath was Prime Minister. The longest period of low inflation since Mr Churchill was Prime Minister. The lowest basic rate of income tax since Mr Baldwin was Prime Minister. The lowest level of strikes since – well, since Mr Gladstone was Prime Minister. Britain is becoming the economic success story of Europe.

    That’s a fact. You can’t hide it.

    These days Britain’s economic success is so obvious – even Labour daren’t deny it.

    So they claim it would be safe with them.

    Well, you have to admire their nerve; they opposed our spending plans, tax changes, privatisations, deregulation – they opposed every single policy that has delivered success.

    And then they claim they can carry forward the success of these policies.

    They also claim they can be trusted with the unity of Britain when their priority is to break it up into smaller parts.

    And they say they can be trusted on Europe, when their policy is to copy its mistakes.

    On three main election battlegrounds – the economy, Europe, the Constitution – Labour are wrong, wrong and wrong again.

    The Foot-in-the-Door Salesmen

    To understand what New Labour is all about, you need to put yourselves in Labour’s shoes. When you’ve been wrong all your life what do you do?

    Imagine the PR men’s advice.

    “Ditch your past. Don’t say what you’d do. Just say what you’re against. Avoid details. Dream up gimmicks for headlines. Copy Tory language. And – above all – don’t forget to smile”.

    New Labour is one great marketing scam. They only say what they are told the customer would like to hear. The exact characteristic of the foot-in-the-door salesman.

    Nothing is quite what it seems. It depends on who they’re speaking to.

    They are for grammar schools in the Wirral, but against them at the Party Conference. They are for lower taxes in The Times. But in favour of more spending in The Guardian. They are tough on crime in The Daily Mail. But soft on crime in the House of Commons. Put it altogether, and what do you get?

    The world’s first:

    Federalist – Nationalist,

    Unilateralist – Militarist,

    tax-cutting, more spending,

    grammar school loving, grammar school hating,

    socialist, non-socialist party.

    There’s an old story of a seasoned politician who was once asked what time it was by a voter.

    “What time would you like it to be?” he replied. That, in a nutshell, is New Labour policy.

    If it would win a vote, please a newspaper editor, satisfy a pressure group, Labour would say anything.

    If it would win two votes, they’d believe anything.

    And if it would win three votes, they’d do anything.

    They’re prepared to disregard the views of a lifetime in the briefing of a lunchtime.

    As day succeeds day, the fraud that is New Labour becomes more transparent.

    You can’t take at face value a word that Labour say. That’s why they’re so dangerous.

    The Labour Leader claims he and his Party have changed.

    Well the oratory has changed.

    But have Labour really changed?

    New Labour runs Liverpool – the council with the highest Council Tax. No change there.

    New Labour runs Sheffield – the council with the largest number of empty homes. No change there.

    And, of course, New Labour runs Islington, the council with the worst education results in England. No change there.

    Mr Blair says – and I quote, “I don’t think the character of any party becomes clear until you’re in power”.

    Let’s take his word for it. In all these councils New Labour are in power.

    And what do we see?

    New Labour – same old story.

    One thing is clear, locally or nationally, you can’t trust Labour with Britain’s future.

    Why Five More Years

    But why does Britain need five more years of Conservative Government?

    Not just to protect what we’ve achieved but because there’s much to be done.

    In the 80s and early 90s we curbed inflation, extended private ownership, began to reform our schools and hospitals, toughened up the law.

    We should be confident and proud of what we’ve done.

    In the Tory years, the quality of life has been transformed.

    No other Party would have attempted it – let alone achieved it.

    But the Conservative reforms aren’t over – not by a long chalk.

    Now we must carry them forward.

    What is it people are still concerned about?

    Where are the areas that still need reform?

    They’re the areas where the state still has too much control.

    Where the consumer is swamped by bureaucracy and the individual is forgotten.

    Education

    Take education.

    I believe parents have a simple wish: to know that when they send their children to school, that school – paid for by their taxes – will give their children a decent education.

    They should be able to count on that.

    After years of reform, our Manifesto will give them a Guarantee of Standards. The first pillar will be tests.

    In the next Parliament we’ll test children at 7, 11 and 14.

    We’ll publish the results so that parents can see how their children are progressing, and teachers can discover how much their pupils have learnt.

    And we’ll change the way tests are marked, so children get scores out of 100. I think you’ll agree that’s common sense.

    It’s also common sense that every child is different.

    So we will go on creating a range of schools, breaking up the drab slab of a solely comprehensive system.

    More grant-maintained schools.

    More specialist schools.

    And, yes, more grammar schools.

    If that’s what parents like, that’s what parents will get. Labour can’t bear any of this.

    They wriggle, they writhe. They twist, they turn.

    Never mind watching their lips – watch the agony on their faces as they perform their lingual gymnastics, trying to hide their hatred for choice and their dislike of diversity.

    Grant-maintained schools, grammar schools, assisted places – we Conservatives believe in extending choice, not opposing it. It’s the basis of our philosophy.

    And how Labour detest it.

    But choice is meaningless unless it’s a choice of good schools.

    A choice of bad schools is no choice at all and, tragically, in some Labour education authorities, that’s all you get.

    We can already take over schools that are failing their children, but sometimes the problem isn’t just with the school – it’s with the education authority itself.

    So where education authorities are failing, we’ll create new powers to take them over to drive up standards.

    Labour will say, “But you have had 18 years to sort out education. Why has it taken so long?”

    That’s rich, coming from them. Who’s opposed all our reforms? Labour. And here’s a fact for the doorstep.

    The twenty education authorities with the worst education results are, without exception, traditional Labour authorities.

    It’s their attitudes and their schools that have been failing our children.

    So, after the election, I intend to ask the Government’s watchdog on standards – OFSTED – to examine, in turn, every single one of those failing education authorities.

    We’ll improve them if we can, and replace them if we can’t.

    We’re going to join the parents’ revolt against Labour education.

    And if you don’t think there’s a revolt around ask them in Islington.

    43 per cent of Islington’s parents agree.

    They send their children to secondary schools outside the borough.

    Some of them are rather well known parents.

    43 per cent.

    Parents running from councils like Islington.

    Socialist-run councils – with Socialists running away from them, as fast as they can.

    The People versus the Planners

    That’s socialists for you.

    Well-intentioned, but in love with controlling things.

    But just look at our inner cities, choked by the dead hand of socialist planning.

    We’ve brought in private investment and enterprise. And that public-private partnership is transforming what were once no-go areas for jobs and business.

    But the toughest challenge still remains: large housing estates, soulless blocks where the only sense of community was snuffed out long ago, that have become deserts of despair.

    Parties of every colour built them, thinking they were the right way ahead.

    But they’ve become places where poor education, drugs, crime have created a vicious downward spiral.

    Where people live dependent on the state, but are let down by local councils who own their homes.

    Where the worst poverty is poverty of hope.

    These estates are concrete proof that the old way – of hoping the state and councils can provide for all our needs – has failed.

    These people deserve the chance to rebuild their communities and their lives.

    Ours is a fresh approach, giving tenants the opportunity to vote to transfer their homes to new landlords.

    This is People Power – giving people the chance to control their own lives.

    To create a new community.

    It isn’t just bricks and mortar that matter. It’s training and jobs, raising education standards, tackling crime.

    It’s the community itself.

    Our commitment is to transform the worst estates across the whole of the country and the lives of those who live on them.

    We won’t solve it in a year – or even a Parliament.

    But it can be done and will be done – by the next Conservative Government.

    Just this week, we announced that tenants on 40 housing estates stand to benefit from millions of pounds to help the private sector transform 22,000 homes.

    22,000 homes.

    22,000 families.

    I bet you didn’t read about that in your newspapers.

    It probably didn’t merit a headline in some.

    But that’s the reality of life in Conservative Britain.

    As Britain grows stronger, more and more people are beginning to feel the warmth of prosperity touch their lives, whoever they are, wherever they live.

    That’s why Labour have to knock it.

    A week doesn’t pass without them kicking their favourite political football – the National Health Service.

    Just look at the service they attack.

    More patients being treated than ever before.

    Shorter waiting times.

    Better treatment.

    Why is our health service such a success?

    Not just because we’re spending more on it, though we are.

    But because we’re giving the money to the hospitals and doctors themselves who know best how to use it.

    Under Labour, bureaucracy would come back at the stroke of a pen.

    They’d strip hospitals and family doctors of their freedoms and smother them with new layers of bureaucracy.

    Our modern health service would be thrown into turmoil as Labour pushed it back to its bad old ways.

    That’s not the way we should go.

    We’re going to give more freedom to doctors and nurses. They’ll be able to offer more care in surgeries and nearer home.

    And – where they want to – create a new generation of cottage hospitals, so patients can be treated by professionals they know in their own community.

    And the same applies to our social services.

    We’re going to end the politically correct regulations, which stopped couples who want to adopt children from doing so.

    Regulations like this might sound petty. But to a couple who long to raise a family they can, quite literally, stand in the way of making a lifetime’s dreams come true. That’s the heart of the matter.

    Politically correct beliefs that prevent this don’t fit into the British way of life.

    The Constitution

    Britain’s progress – our prosperity, widening choice, opportunity – depends on one thing: stability.

    Labour’s plans for Britain would rip up our nation’s fabric up by the roots. “The most radical” constitutional change our country has ever seen, they boast.

    A tax raising parliament in Scotland.

    An assembly in Wales.

    A splattering of regional assemblies across England.

    And a referendum on changing the voting system to PR.

    Why in the name of sanity do they want to start cutting up this country of ours? Why risk Britain’s success?

    Devolution is the ransom Labour would pay to buy off the voices of separation. But it wouldn’t buy them off – it would just build up their appetite.

    Then there’s PR. That’s the price they’d pay for the support of the Liberal Democrats. Why else does Mr Blair want a referendum on PR? He says he’s against PR and against referendums.

    The constitution, the Union, British history – they are all pawns to New Labour.

    No price is too high.

    Nothing too sacred.

    Labour are after votes – at any price.

    “What’s the point of history? What relevance has that to the future” they say. “New Labour, no history”.

    Well, Mr Chairman – let’s make New Labour old history.

    We treasure the stability and security of our Constitution.

    Careful reform that builds for tomorrow – yes. Reckless change – no.

    The Labour leader hasn’t the first idea how his plans would work. He’s like a weak contestant on Mastermind.

    “Name?” “Tony Blair.”

    “Occupation?” “Demolition specialist.”

    “Subject?” “British Constitution.”

    Would Scottish and Welsh MPs at Westminster be able to vote on matters affecting England, but not Scotland?

    “Pass.”

    If someone from Birmingham was employed by a Scottish company, would they pay the tartan tax?

    “Pass.”

    Why should Scotland get a tax-raising parliament, but Wales only an assembly. What have the Scottish done to deserve such a fate? Why not trust the Welsh?

    “Pass.”

    Would regional assemblies duplicate the power of local government and Westminster?

    “Pass.”

    And so it goes on, and so on, and so on.

    “At the end of that round, Mr Blair, you were asked twenty questions – and you passed on them all”.

    Labour haven’t begun to think through the implications of their plans. And yet this would be their priority for government.

    The last Labour Government fell, tied up in knots of devolution.

    It was a complete failure. That’s where Old Labour stopped. And this is where New Labour would begin.

    That’s not a route map for Britain’s tomorrow. It’s a masterplan for disaster. And it’s deadly.

    Europe

    And if devolution wasn’t enough, there’s Europe.

    Here Labour would damage both our economy and our constitution.

    They want us to follow the European way of doing things – the European Social Model.

    It’s that old-fashioned approach: you pretend governments can protect jobs by imposing regulations and burdens on business.

    All Labour have done is dress it up in new words: stakeholding. Social justice, social partnership.

    New words to try to camouflage reality.

    But they can’t.

    Over 4 million Germans, over 3 million French and about 3 million Italians know that. They’re all unemployed.

    That’s over 10 million people in Europe without a stake in a job.

    Where’s the social justice in that?

    They have a message that Labour should listen to.

    “Give us our jobs back.”

    And unless we want to lose jobs in the same way, Britons should listen too.

    Labour tells us we shouldn’t be isolated in Europe.

    Translated, that means “You may be getting back to work in Britain, but really you should be joining your European colleagues on the dole”.

    By signing the Social Chapter and inflicting a minimum wage, Labour would conscript British youngsters into the growing army of the European unemployed.

    That’s the message: if you want to get people into jobs don’t give one to a Labour MP.

    And that’s only part of the picture.

    Labour wish to undermine our veto and hand more power to the European Union.

    They’re prepared to ransack the Westminster Parliament of its power.

    Some would go to Edinburgh; some to Cardiff; some to the regions; and some to Europe. Parliament could keep what’s left.

    A United Kingdom reduced to regions, each competing one against another, with no one voice, no common cause, no national purpose.

    A Europe of the Regions, the Europe so beloved of Robin Cook.

    This surely cannot be the future for us.

    To consign it to the long list of failed, discredited policies New Labour, Old Labour, any old Labour have to their name.

    We don’t take this position because focus groups say so. Nor out of party political advantage.

    We do so because we believe what Labour is proposing threatens this United Kingdom of ours with change on an unprecedented scale.

    Peroration

    We should be more confident as a nation about what we’ve done, what we are, what we stand for.

    If I had one wish, it would be that we could see ourselves as others see us.

    As one of the most secure democracies in the world. An outstanding success story. A nation enjoying a renaissance in enterprise.

    Behind us lie 18 years of building the foundations for rising prosperity.

    When we came to power in 1979, Britain was derided as the sick man of Europe. Today we are admired as the success story of Europe.

    The spirit of hope is around and growing by the day.

    We must build on that and broaden the smile across the face of Britain. We have a tale to tell that cannot be denied.

    Let’s not put it at risk.

    The polling booth is not a casino. Not a place to gamble with Britain’s future. It’s the opportunity to secure our future.

    An opportunity we Conservatives have created, and only we can build on.

  • PMQT – 6 February 1997

    Below is the text of Prime Minister’s Question Time from 6th February 1997.

    PRIME MINISTER:

     

    Engagements

    Q1. Dr. Lynne Jones: To ask the Prime Minister if he will list his official engagements for Thursday 6 February.

    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.

    Dr. Jones: The Prime Minister will know, because I gave him advance notification of this question, that, last year, the Secretary of State for Health visited my constituency to open the new £7.5 million trauma and burns unit at Selly Oak hospital. People were relieved because they thought that, at last, the future of the hospital was secure, but now there is again talk of its closure. Does the Prime Minister agree that it would be barmy to close those brand-new facilities and those in the sister Queen Elizabeth hospital? Does he realise that local people do not trust his Government on health–especially when they know that the Secretary of State for Health does not rely on the NHS and takes out private health insurance?

    The Prime Minister: I am grateful to the hon. Lady for giving me notice, an hour or so ago, that she proposed to ask that question and I have made some inquiries in the interim. I understand that the health authority is examining how best to deliver patient services. That is part of a process that, as the hon. Lady will concede, is in the interests of the health service in her region and has already resulted in improved care, more in-patients, more out-patients and more day care.

    On the specific point, I understand that the trust has taken no such decisions and that local media items have been misleading. If, at any stage in the future, substantial plans for change were to be made, they would at that stage have to be subject to full public consultation.

    Mr. Deva: Does my right hon. Friend join me in welcoming the inspired decision to give passports to 5,000 stateless south Asians in Hong Kong? Does he recognise that those families are major wealth creators in Hong Kong and that, as British passport holders, they will enable Britain to become not only the enterprise centre of Europe, but the enterprise centre of the whole world?

    The Prime Minister: As my hon. Friend knows, I made it clear when I went to Hong Kong last year that I wanted the ethnic minorities to be assured about their future. I am aware of the widespread concern that there has been in both Houses, as well as in Hong Kong, about their nationality status. My right hon. and learned Friend the Home Secretary has therefore decided that they can register as British citizens, with a right to abode here after 30 June. I have no doubt that the overwhelming majority–perhaps even all–will continue to reside in Hong Kong, where they will continue to have a right of abode, but they were potentially stateless and they now have a nationality.

    Mr. Blair: Can the Prime Minister confirm that, since he became Prime Minister, he has doubled the national debt?

    The Prime Minister: I can also confirm to the right hon. Gentleman that there is not a single economy in Europe that can match our performance. If the right hon. Gentleman wishes to see debt rise further, and to see the British economy fail rather than succeed, he should follow the policies of the social model to which he is committed in Europe, with the results that we have seen in Europe.

    Mr. Blair: Perhaps for once we can get a straight answer to a straight question. We now pay out on interest payments on debt every year more than we spend on law and order and transport put together. Can the Prime Minister just answer that simple question? Can he confirm that, since he became Prime Minister–he is the only Prime Minister since the war of which this can be said–he has doubled the national debt? Yes or no?

    The Prime Minister: The right hon. Gentleman spent the whole of the recession encouraging us to spend money to assist people in need. [Interruption.] He invites us to do one thing one day and something quite different the other. He says different things abroad and at home. At least on this occasion he seems to be seeking to quote me, not President Clinton.

    Mr. Blair: Perhaps I can quote the right hon. Gentleman again. Does he not recall saying that he would be the Prime Minister who would balance the budget? Does he not recognise–[Hon. Members: “Oh.”]

    They complain about us. We have been trying to save the Government money over the past few weeks while he and his rag-bag of outgoing Ministers have been spraying around the post-dated cheques like there was no tomorrow. [Interruption.] Is that not true? Record borrowing, record tax increases and still they cannot run decent public services. Is that not typical of the Tories–unfair and incompetent in equal measure?

    The Prime Minister: I suppose there was never a chance that the right hon. Gentleman was going to debate the real issues of today, on which the shadow Chancellor has landed him in such trouble. I will tell him about the–[Interruption.]

    Madam Speaker: Order. I really am getting very weary of barracking from a sedentary position, particularly from Front-Bench Members.

    Mr. Skinner: That puts me in the clear.

    The Prime Minister: I can for once agree with the hon. Member for Bolsover (Mr. Skinner): he is not barracking from the Front Bench, and I doubt that he ever will be.

    The comparisons I can safely offer the right hon. Member for Sedgefield (Mr. Blair) are comparisons between this country’s performance on unemployment and that of every other country in Europe; this country’s performance on the recovery and that of every other country in Europe; this country’s performance on exports and that of other countries; and this country’s performance on manufacturing exports and that of other countries. The right hon. Gentleman should acknowledge just for once the success of British industry, the British economy and the British nation, instead of trying to do it damage.

    Mrs. Roe: Will my right hon. Friend join me in welcoming the fact that Britain is attracting more investment from throughout the world than any other European country? Is it not the case, however, that the social chapter would destroy jobs and drive out investment? What advice will he give to business leaders who have been invited to shell out £7,500 to attend a fund-raising banquet hosted by the Leader of the Opposition?

    The Prime Minister: Seven thousand, five hundred pounds for a meal with the Leader of the Opposition? The Leader of the Opposition seems deeply engaged in conversation. He is perhaps persuading the hon. Member for Dewsbury (Mrs. Taylor) to cough up and come to the luncheon.

    Mr. Ashdown: I was interested to hear the Prime Minister admit in his previous answer that the ethnic minorities in Hong Kong were potentially going to be left stateless, as he specifically denied that in answer to a question that I asked him along those lines three months ago. [Hon. Members: “Oh.”] Yes, he did.

    On the issue of public service pay, is it not now perfectly clear that the Government are trying to take fair pay for our nurses and teachers and turn it into yet another exercise in political point scoring for the general election? Are we expected seriously to believe that a Government who can find £1 billion to pay their own private consultants and advertisers cannot fund a modest pay rise for teachers that is perfectly affordable and a pay rise for nurses that has already been budgeted for?

    The Prime Minister: The right hon. Gentleman will have to wait a few minutes for the decisions on public sector pay, which will be fair to the public sector and fair to the taxpayer. If he says that that is entirely affordable, why is he promising to put up tax by a penny in the pound to pay for the teachers? Why is he planning to do that? The right hon. Gentleman does not know what the decisions are, does not understand the issues and yet again asks questions based on utter nonsense.

    Sir Mark Lennox-Boyd: Will my right hon. Friend spare a moment to compare the position of a manufacturer in my constituency with that of his German competitor, who happens to be a friend? The German manufacturer in Bavaria is required to give each employee, every year, 29 days holiday, and an additional 13 days holiday for the religious holidays, which is more than eight weeks holiday in the year. Furthermore, it is sometimes the habit for people to arm themselves with a medical certificate and spend three weeks at Baden Baden.

    The Prime Minister: My hon. Friend points to the different costs of the social model in Europe and the impact that that has had on unemployment.

    Mr. Mackinlay: The Germans are very successful.

    The Prime Minister: There is an increase of half a million in German unemployment. I doubt whether those half a million Germans consider that very successful. Business costs across Europe are costing jobs. For every £100 spent on wages in Britain, there is an extra £15 for non-wage costs. In Germany that figure is £31, in France £41 and in Italy £44. The hon. Member for Thurrock (Mr. Mackinlay) may shake his head, but those are the facts of the matter. That is why business men across Europe–including, for example, the head of the German firm BASF–have said in the past few days:

    “Britain is the best place in Europe to invest.”

     

    Q2. Mr. Cummings: To ask the Prime Minister if he will list his official engagements for Thursday 6 February.

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

    Mr. Cummings: Will the Prime Minister join me in congratulating the doctors and nursing staff at St. Benedict’s hospice in Sunderland on their pioneering integrated assessment of palliative care, which has been acclaimed internationally? While recognising the importance of the voluntary and charitable sectors in supporting hospices, what steps is he taking to ensure a national policy on hospice care?

    The Prime Minister: I do not know the particular details of St. Benedict’s. From what the hon. Gentleman says, its staff have clearly done an outstanding job. If that is true, I am happy to add my congratulations to them and to the hospice movement as a whole. I have had the opportunity of knowing personally of the remarkable work done by the hospice movement, which is truly astonishing. It has the Government’s support and will continue to have it.

    Mr. Sweeney: Will my right hon. Friend find time between now and 1 May to visit the Vale of Glamorgan–a particularly interesting constituency–in order to see for himself the benefits of low taxes, low inflation, the absence of the social chapter, and deregulation in attracting inward investment to south Wales?

    The Prime Minister: My hon. Friend offers me an extremely enticing invitation, which I shall carefully consider. Were I to take the opportunity of visiting every part of the United Kingdom that had had substantial inward investment, it would probably take me until 1 May next year, because of the Government’s remarkable success in encouraging inward investment, as a result of the policies that we have followed over recent years.

     

    Q3. Mr. Kevin Hughes: To ask the Prime Minister if he will list his official engagements for Thursday 6 February.

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

    Mr. Hughes: Will the Prime Minister try to answer the question that he failed to answer on Tuesday? Can he give a categorical assurance that the Wirral, South by-election will take place on 27 February–yes or no?

    The Prime Minister: The hon. Gentleman knows that I have called the Wirral, South by-election, and whatever ingenious ways he tries to produce to entice me to tell him the date of the general election, he will have to wait. The election in Wirral is proceeding.

     

    Q4. Mr. Harry Greenway: To ask the Prime Minister if he will list his official engagements for Thursday 6 February.

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

    Mr. Greenway: Does my right hon. Friend agree that the rise of nearly half a million in German unemployment in January is graphic proof that, as he said in Brussels this week, one signature on the European social chapter is half a million British signatures on the dole? Is not the British approach to competitiveness under the Government working, while the European social chapter, so advocated and loved by the Labour party, is not?

    The Prime Minister: It is undeniable that the social model has contributed substantially to unemployment across Europe. The average level of unemployment in Europe is 3.5 per cent. above the rate here. My estimate of an extra half a million unemployed, were we to go down that route is, if anything, an under-estimate and not an over-estimate. A moment ago, I quoted the German head of BASF. I could of course have quoted the head of the Dutch business association who said:

    “The British way is best.”

    He went on:

    “There is absolutely no need for a Europe wide set of rules.”

  • Mr Major’s Speech on Enterprise Europe and the Social Chapter – 4 February 1997

    Below is the text of Mr Major’s speech on Enterprise Europe and the Social Chapter, made to the European Policy Forum. The speech was made at The Conrad Hotel in Brussels on Tuesday 4th February 1997.

    PRIME MINISTER:

    A COMPETITIVE EUROPE – THE ENTERPRISE APPROACH

    Introduction

    Most politicians – across Europe and irrespective of political party – have in common some of the same aims and ambitions. They would like their country to be more prosperous and people to become better off. They wish to see economic and political stability. And everyone wants peace.

    In Europe, the greatest threat used to be war. Twice this century war has torn our Continent to pieces. It’s fifty two years to the day that the Big Three met at Yalta and set the course for Europe’s post-war history.

    Today, the notion of war between the countries of Western Europe is unthinkable. And the credit, in no small part, goes to the European Union. Peace is the prize that the project of Europe has won.

    We must build on that. That is why I believe that enlargement of the membership of the union – rather than more integration of existing members is the proper priority.

    But my theme tonight is not enlargement, or the IOC, nor even EMU, important as these issues are.

    The argument I advance today will not be new to my fellow heads of government. I have used it often enough in the European Council and privately. But I believe it needs a wider circulation.

    Today Europe faces a historic challenge – how to keep our companies competitive and our people in work in the face of intense global competition. Prosperity – that aim which every politician shares – depends on winning in that world.

    But Europe is not winning. 18 1/2 million people are unemployed – the size of Denmark, Finland and Sweden put together. We’re not creating enough new jobs.

    Over the last 20 years America has created 36 million new jobs, of which 31 million were in the private sector. In that time, the EU as a whole only created 5 million new jobs, of which only I million were in the private sector.

    Europe cannot brush that comparison aside. We have to ask why the private sector has not created extra jobs in Europe whilst it has elsewhere.

    We have to find the answer and act on it.

    I believe the answer lies in the policies Europe has followed.

    We are at a turning point. The choice is either to press ahead with policies that are causing unemployment, or change direction. Crudely, the choice is between two dramatically different economic philosophies – the enterprise approach, and the approach most people know as the European Social Model.

    It’s a debate in which the British Government is often portrayed as being out of step with her European partners.

    Up to a point, that’s true. We are out of step with the European social model. We believe it prevents job creation and creates unemployment. We believe that is politically wrong and economically wrong.

    But no-one should misrepresent our commitment to an enterprise approach to suggest we are against Europe.

    We are not. We are for Europe. Millions of Britons fought and died to defend Europe’s freedom. Our history is entwined with Europe. Our trade depends on Europe.

    Our arguments are not about Britain against Europe. Our arguments are about achieving success for the whole of Europe.

    When Britain disagrees with some policy or other our European partners often shrug their shoulders and say ‘Oh well, they’re only saying that because of the domestic debate in the UK. They’ll come on board in the end.’

    I understand why they say that – but they’re wrong on both counts.

    First when we oppose a policy it’s because we believe it’s a mistake – it’s not a public relations gesture. I don’t just mean a mistake for Britain. I mean a mistake for Britain and Europe as a whole.

    And second, our partners are wrong to believe we’ll come on board in the end. If we dislike the policy – we won’t.

    Because Britain has too much to lose.

    Britain’s Success

    I said earlier that unemployment is a European problem. It is. But it need not be.

    If Europe practised the enterprise policies it pays lip service to then it could become a dynamo.

    These policies aren’t always easy. Or popular. But they work. And because they work they put our people back to work.

    The evidence is easy to see.

    In other comparable European countries, unemployment rates are the highest for a generation – and rising. But unemployment in Britain is lower – and still falling. This is not just the economic cycle, it’s because over the years we’ve built a dynamic enterprise economy.

    Eighteen years ago, the British economy was a byword for failure. The state spent, taxed and controlled too much. It had all but snuffed out the flame of enterprise. That was Britain’s low point – and we changed direction.

    We decided that the only route to success was the enterprise model – curbing the power of the state, cutting back unnecessary regulation, and controlling spending so we could cut taxes.

    We put our trust in the free market, rewarded effort and success and, above all, made it worthwhile to create jobs.

    We broke the trend of rising state spending. The share of national income taken by the government has gone on rising in Europe. But in Britain, government spending will be down to 40% of national income next year.

    We cut income tax and corporation tax: we now have the lowest basic rate of tax for nearly 60 years, and at 33% the lowest main corporation tax rate of any major industrial country. And our overall tax burden is the lowest of any major economy in Europe.

    We privatised loss-making nationalised industries, bringing lower prices and better services and turning loss-makers into world-beaters.

    We tamed the power of the unions, and strikes have hit record lows.

    And we’ve kept up a constant battle against regulations that throttle businesses – particularly small ones.

    None of this has been easy. But it has meant Britain has been able to create more jobs in the last four years than all the other major countries of Europe put together.

    It’s not just British companies that are creating the jobs – though they certainly are.

    We’re now also drawing in billions of pounds worth of investment from around the world, one third of all inward investment into the European Union.

    And our near neighbours are investing in Britain too. In recent years Britain has been the number one destination for overseas investment by German business. Some 1600 German companies now have a base in the United Kingdom.

    The European Social Model

    But while we have put our faith in enterprise and the individual, others have followed the European Social Model.

    Britain apart, across the EU the state’s share of national income rose from an average of 45% of national income in the late 70s to 49% today.

    Many countries are now making Herculean efforts to bring it under control. They are right to do so. But they have a long way to go and tough problems to overcome, not least the mounting bills for state pensions next century.

    But public spending control is now one area where most European governments can agree on the direction for the future.

    The same cannot be said for labour market regulation. There is a sharp divide between Britain’s enterprise approach and attempts elsewhere in Europe to cocoon jobs by legislation.

    Protecting jobs by legislation sounds good. But it’s a fraud, a false security. It’s a case of bureaucracy defending the status quo as the quo inexorably loses its status.

    Yes, you can pass legislation to make it harder for a company to reduce its workforce. But if reducing the workforce is what is needed to survive, all you’ve done is to jeopardise the jobs of the entire workforce.

    It is a well meant but short-sighted policy.

    The harder it is for companies to adapt to change, the slower they will be to match the competition they face. The slower they react, the worse they do.

    Over-regulation damages growing industries too – the ones on which our security really depends. By making it more expensive to take on additional workers, it locks out the unemployed and adds to long term unemployment.

    It may sound responsible and caring. But the European Social Model is in fact fundamentally flawed.

    It deprives today’s companies of the chance to compete, and drives away tomorrow’s investment and new jobs.

    Over-regulation doesn’t work. And as a result, nor do millions of Europeans. The figures say it all.

    For every £100 paid in wages, in Germany non-wage costs add on an extra £31, £41 in France and £44 in Italy. In Britain, it’s only £15.

    Social Chapter

    When you look at those figures, it’s easy to see why Britain will not sign the Social Chapter.

    This is not some arcane dispute about a trivial statement of good intentions. The point is that if we signed it, the Social Chapter would be the mechanism to implement the European social model in all its aspects.

    It isn’t just what is in the Social Chapter today that matters. It is what will go in it.

    The fact that we have refused to sign it has acted as a brake on its development. But remove that brake, and new legislation will pile up fast.

    There is plenty in the pipeline already or under discussion.

    Shifting the burden of proof onto employers in sex discrimination cases.

    Extending full-time rights and conditions to part-time and temporary workers.

    Compulsory arrangements for informing and consulting employees at national level.

    Further restrictions on the dismissal of workers. New European rules on sick pay.

    All that and more proposals to regulate working time.

    That is why I will never sign it. Because one signature on the social chapter would mean ½ million signatures on the dole.

    All Britain would gain from the Social Chapter is a less competitive economy and more unemployment.

    First stop Social Chapter. Next stop social security.

    I have no doubt that if we signed the Social Chapter it would become a Trojan horse unloading on Britain the problems that brought us to a low point in the 1970s. The Social Chapter has the appetite to become one of the most far- reaching provisions in the Treaty covering everything from working conditions to union rights.

    And it’s no good pretending that once you’d signed up you could have second thoughts. It’s not some mail order mistake you can send back if you don’t like it.

    Once you sign up, you can’t opt out again. In the key areas there is no veto. Britain would be powerless to stop our businesses being burdened with all kinds of unnecessary regulations.

    Ever businessman in this room knows what the effect of that would be: one more burden on business, one more reason to set up somewhere other than Europe.

    Instead, I want the whole of Europe to wake up to the crying need for an enterprise approach so that Europe can get back to work and we can all prosper.

    This argument will be crucial at the IGC at Amsterdam. People will attack me for not signing the Social Chapter, and will question my motives: how can I disagree with the objectives of the Social Chapter – the promotion of employment and improved living and working conditions?

    Of course I share those aims: in Britain, we’re actually achieving both. But ill-considered burdens on business act against those objectives – not for them.

    To achieve those aims, we have to keep our businesses competitive. And we have to encourage enterprise and job creation and not penalise it.

    How is job creation helped by centralised, legally binding agreements between employers and trade unions?

    By mandatory works councils?

    Compulsory parental leave?

    What jobs does that create?

    What orders does it win?

    None.

    Some people try to shrug off the impact of new regulations by saying that large companies can afford the extra cost.

    That’s surely the wrong point. An extra 20 per cent or more on employment costs isn’t small change for any business. That money could better be used for fresh investment.

    And it’s worst of all for the small business. The owner manager with 10, 20 or even 100 employees. These are the companies that represent future employment. In the UK, for example, over half of all private sector employees are in companies with less than 100 employees.

    They don’t have the resources to fund huge personnel departments or employ compliance officers. So how are they supposed to find their way round the jungle of new regulations and absorb the costs? And if we’re throttling businesses like that where on earth do we expect tomorrow’s big companies to come from?

    This may be an unwelcome message in some circles. But it is one that is backed up by the IMF and the OECD, both of whom have drawn attention to the weaknesses in the EU’s labour market and the strengths of the UK’s performance. And of course it is backed up by business opinion.

    Only recently, the Chairman of Digital Equipment said:

    “It is no accident that unemployment in the UK is at a long time low. It is a lot easier to operate in the UK. The workforce is a lot more flexible.’

    The President of the German BDI made very similar points:

    “We have too rigid labour laws. We have too high social costs and taxes. We work the shortest week in Europe. The German government spends 50% of GDP as opposed to 42% in Britain. No wonder we have a problem”.

    The UNICE and the European Round Table of Industrialists want a moratorium on new EU social laws and oppose a new employment chapter.

    And a survey of small firms in the EU last year put labour and social laws second only to the availability of investment as the main constraint on expansion.

    In Britain, business is assessing the likely impact of the Working Time Directive. A recent survey by the British Institute of Directors showed more than half of their members believed the Directive would cost jobs in their businesses.

    The United Kingdom, of course, disputes the legal basis for this Directive, and will require our exemption to be firmly re-established in the current Inter-Governmental negotiations.

    But the Working Time Directive itself is not the point. The point is that the Working Time Directive is the thin end of a very large wedge.

    Business needs to speak up and say this. The facts are uncomfortable but they cannot be ignored. If Europe is heading in the wrong direction – and on this issue I believe it is- then we must face the problem and change the policy.

    Of course, this is difficult. I know anyone who points out the flaws in the social model can expect fierce criticism. But this criticism is generously laced with some contemporary myths. So let me address these myths that stand in the way of an enterprise Europe that could put its citizens back to work.

    The first myth is that without the new Social Chapter provisions workers would be open to exploitation.

    This is nonsense. Let me illustrate that by reference to Britain’s experience.

    Britain has comprehensive laws against racial or sexual discrimination, against unfair dismissal, and guaranteeing the right to trade union membership. Our health and safety legislation has resulted in one of the best safety work records in Europe.

    But the State should step in only where it is needed. Over-prescriptive legislation impedes a free labour market and adds to costs and not jobs.

    Proper negotiation between employer and employee is the best guarantee of workers’ opportunities and rights. We are now in the 1990s not the 1840s. Companies nowadays send young people on training courses not up chimneys.

    The second myth is that social legislation is necessary to protect workers from job insecurity.

    This is a simplistic and unrealistic view. In any modem developing economy there are always going to be some people changing jobs as the result of competition and technological innovation. That is just a fact of life.

    But what is important is that those who lose their jobs have a good chance of finding one again soon. The best way to guarantee that is to have a dynamic economy where job creation is encouraged.

    Making it more expensive for employers to take on new staff hinders, not helps, that process. All social legislation will do is to make it more likely that those who become unemployed stay unemployed. That is in no one’s interests.

    The third myth is that social legislation will help increase permanent employment rather than temporary jobs.

    Here too the evidence is clear cut. Britain has the lowest level of workers on temporary contracts of any major European country – 7% in Britain as against over 10% in Germany and France, and over 30% in Spain.

    And people get of temporary jobs and into permanent ones quicker in Britain too: 25% of employees on temporary contracts in Britain were in permanent work a year later, against just 14 ½% in Germany and only 9% in Spain.

    The truth is that it is the social model, not the enterprise model, that encourages temporary contracts. Employers use temporary work to avoid the red tape that comes with permanent jobs.

    In one European country, if you give an employee a permanent contact, you cannot dismiss him without first applying to the employment service. In two others you’d need permission from the works council. In yet another, large firms have to produce a “social plan” and may face lengthy appeals that can ultimately prevent restructuring.

    And in some other European countries – as many of you know from your own experience – dismissing an employee is virtually impossible. As a result, there is a bias against full-time employees, more are on temporary contracts and more are without jobs entirely.

    That is one illustration of the way in which the social model is well-meaning but soft-headed.

    Then there is the fourth myth: that without the Social Chapter we will only create low wage jobs and increase inequalities in society.

    I’ll let the facts speak for themselves.

    Britain has created over 900,000 new jobs in the last four years. Of these, 24% have been in professional occupations and 21% are managerial.

    Almost a quarter of a million new jobs have been created for managers, administrators and professionals within the financial services sector.

    So the truth is the British economy is producing good jobs. Skilled jobs and well paid jobs.

    But because we welcome full time jobs doesn’t mean we should scorn part-time jobs.

    Some opt for pan-time work because they want more leisure and can afford to reduce their hours.

    Many women or young people prefer a part-time job so that they look after their children or study more.

    Once people find work, albeit part-time work in some cases, our experience suggests that they are likely to see their earnings rise more quickly in a less regulated market.

    A recent OECD survey showed that in Britain over half of those in the bottom fifth of the earnings distribution had risen out of it within five years – a higher proportion than in any of the other countries surveyed.

    This underlines why a minimum wage would prove counter-productive. If it was above market levels it would price many first time jobs and part-time employees out of the labour force. It removes the bottom rung of the ladder. Where’s the social justice in that?

    And finally there is myth number five – the all-embracing myth – that a country without the social chapter is a ‘sweat shop economy’.

    That sort of overblown language is simply a substitute for real argument and fact.

    Yes, it does cost less overall to employ someone in Britain than in many other countries. But that is because of lower Government-imposed costs, lower personal taxes, and because prices are lower here. It doesn’t mean lower take- home pay.

    The ‘sweat shop’ economy myth is now so widespread that few people realise that a production worker’s take home pay is higher in Britain- in terms of what it will actually buy than in any other major European economy bar Germany. And of course, you’re more likely to have a job in the first place in Britain.

    The message for Europe

    So my message is clear.

    I am not seeking special arrangements to allow Britain to benefit at the expense of the rest of Europe. Our British interest is for Europe as a whole to succeed. We’ve nothing to gain if our largest export markets hobble themselves.

    My message is that Britain hopes Europe will succeed. But I believe it will only prosper in the long term if the enterprise model becomes the accepted way forward. Our arguments are serious. They are based on facts. They deserve careful evaluation.

    I believe Britain can help shape a Europe in which business can prosper. We are willing to play that role. It is in our interests to do so – and Europe’s interest as well. But we cannot win these battles alone. We need business across Europe to speak up as well before it is too late. Every day lost makes the battle harder.

    The British Government has made up its mind. Our enterprise economy is not negotiable.

    To me, the choice for Europe is simple. We can either stand up and be counted or lie back and be counted out.

    And that is no choice at all.

  • Mr Major’s Message to Conservative Party Association Chairmen – 29 December 1996

    Below is the text of the New Year message sent by Mr Major to the Conservative Party Association Chairmen on Sunday 29th December 1996.

    PRIME MINISTER:

    1997 will be a watershed year for Britain.

    At the election, people will face a choice. A choice of two futures.

    They can choose a future where prices and mortgage rates are firmly under control. They can choose a future that looks rosy, with the best economic conditions this country has seen for a century, created by millions of hard-working people and the government, together. And they can choose a future where British interests will be fought for in Europe.

    Or they can risk a future with an untried, inexperienced, unrealistic alternative. We will win that election, because on all three counts it is too risky to trust Labour with Britain’s future.

    I know how hard the British people have had to work to make life better in this country. As a result we have made real gains – more spending money, more jobs and record investment. But I know, too, how easy it would be to lose those hard-won gains.

    We will safeguard the stability and lasting prosperity of British families with a clear and reliable agenda for those who work hard. Here are my five economic pledges for stability and prosperity:

    Tax : Having cut the basic rate of tax from 33p to 23p, we aim to get it down to 20p. Labour has £30 billion spending pledges but will not say where the money will come from.

    Prices : We keep inflation firmly under control. Labour has no plan for controlling prices and no inflation targets.

    Mortgages : By keeping inflation and interest rates low, we will ensure that the repayment on people’s homes – their biggest monthly outlay – remains affordable. Labour cannot be trusted to protect people’s mortgages.

    Jobs : We will continue to help businesses create more jobs, particularly for the young. Labour would destroy jobs with the minimum wage and Social Chapter.

    Britain : We will fight for a Europe of globally competitive nation states, not a federal Europe. Labour would undermine our right to say “no” to policies that would harm our country, and sign up to the job-destroying Social Chapter.

    Only Conservatives can deliver and build on Britain’s stability and prosperity. The evidence is all around us. A hard-working family on average earnings is £1,100 a year better off than at the last election, after taking tax and inflation into account.

    Over the next five years, Conservatives will fight to build on the higher standards in our schools, to build on the better treatment in our hospitals, and to build on the increase in police numbers on the streets. We have built a platform for lasting prosperity in a tough and competitive world.

    Having come this far, people are now going to ask themselves if they are prepared to put their security and Britain’s success at risk.

    Every previous Labour government has mishandled the economy and every person has paid the price through higher taxes, mortgages, prices and fewer jobs. If a new Labour government acted as Labour has always done, we would all suffer.

    Labour’s aims are unachievable. They have made £30 billion of spending pledges, so everyone knows they will either put up taxes or run up the nation’s debt. They say they’d help the unemployed – but we all know that a minimum wage would price people out of jobs. They say they are on the side of the people, but they are determined to make them pay more for gas, electricity, water and telephones and reduce the value of their shares and pensions, by imposing a windfall tax on business.

    The real danger lies in the fact that Labour won’t say where the money is coming from. After seventeen years in opposition, they still won’t tell us how they would raise the money to achieve what they promise. This is an unbelievable stance for a party wanting the responsibility of government. It is not surprising that their deputy leader, John Prescott, says that it would be “stupid” to tell the people what their tax plans are.

    But this election will decide more than just how Britain is run. Our great country faces two futures.

    At the European Inter-governmental Conference in Amsterdam next year, the British Prime Minister will have to negotiate about the future of Europe.

    I have one overriding principle in my policy towards Europe: to put the British interest first. That is the best policy for Britain and our party. I want Britain to play a full part in building a Europe of nation states. Our agenda is to help make Europe more competitive, so all hard-working people will benefit.

    But I will firmly resist any policies that would damage Britain’s prosperity, or result in a significant shift of power to Brussels. As I have said before, if Europe goes federal, Britain will not follow.

    But there is another future.

    Imagine if Tony Blair represented Britain in Amsterdam. He says he would never be isolated in Europe, so he would just follow the crowd. He would sign up to the job-destroying Social Chapter. He would undermine our veto – our right to say “no” – in many crucial areas.

    While destroying Britain’s influence abroad, Tony Blair’s policies would dismantle Britain at home. He clings to the wreckage of a discredited policy – devolution. He says it is a priority for government, but it would undermine the United Kingdom. He would give Scotland a tax-raising parliament, Wales an assembly and England a series of regional assemblies. No-one can know the damage this would do to our country.

    Two futures. A united and successful Britain, holding its head up high in the world – as the respected Organisation of Economic Co-operation and Development has just confirmed. Or a country weakened abroad and divided at home.

    Stability and prosperity, or a leap into the unknown. That is the choice.

    When people ask, “But isn’t it time for a change?” tell them that there is a stark choice. Do people want to see the achievements of 17 years, and the brightest of prospects for generations, handed over to a party that is inexperienced and will say anything to win power? We get the basics right, Labour will get them hopelessly wrong.

    It is not in my nature to walk away from a fight. I am not going to do so now. I look forward to your help in winning a fifth term in office.
    Happy New Year.

  • Government Statement of European Court of Justice Ruling – 12 November 1996

    Below is the text of the statement issued by 10 Downing Street on 12th November 1996 on the ruling by the European Court of Justice.

    STATEMENT ON ARTICLE 118A OF THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY:

    My intention in agreeing to the Protocol on Social Policy at Maastricht was to ensure that social legislation which placed unnecessary burdens on businesses and damaged competitiveness could not be imposed on the United Kingdom. The other Heads of State and Government also agreed that arrangement, without which there would have been no agreement at all at Maastricht.

    However, in its judgement today, the European Court of Justice has ruled that the scope of Article 118a is much broader than the United Kingdom envisaged when the article was originally agreed, as part of the Single European Act. This appears to mean that legislation which the United Kingdom had expected would be dealt with under the Protocol can in fact be adopted under Article 118a.

    That is contrary to the clear and express wishes of the United Kingdom Government, and goes directly counter to the spirit of what we agreed at Maastricht. It is unacceptable and must be remedied.

    The United Kingdom will therefore table amendments in the Intergovernmental Conference to restore the position to that which the United Kingdom Government intended following the Maastricht agreement. Those amendments will be aimed at both ensuring that Article 118a cannot in future be used in ways contrary to the United Kingdom’s expectation, and dealing with the specific problem of the Working Time Directive.

    I attach the utmost importance to these amendments and I shall insist that they form part of the outcome of the Intergovernmental Conference. I do not see how new agreements can be reached if earlier agreements are being undermined.

    Meanwhile, I urge the Commission to refrain from making proposals under Article 118a which properly belong under the other Member States’ Agreement on Social Policy.

    I am sending copies of this letter to Heads of State or Government of European Union Member States.

    To : His Excellency Monsieur Jacques Santer

  • Mr Major’s Doorstep Interview at Launch of Gas-Powered Cars – 12 November 1996

    Below is the text of Mr Major’s doorstep interview whilst at a launch of gas-powered cars on 12th November 1996.

    QUESTION:

    [Mr Major was asked about the European Court of Justice ruling about the Working Time Directive]

    PRIME MINISTER:

    I think it is a very depressing ruling that we have had from the Court this morning. Europe for a very long time has been losing jobs and losing competitiveness compared to the rest of the world, compared to South East Asia, compared to the United States, compared to Japan. And I think the most important thing for the whole of Europe, including the United Kingdom, is to make sure they are competitive to make sure their economies are fit and healthy and to make sure they are creating jobs. This ruling does nothing to help any of that. In the United Kingdom we now have a very bouncy, very competitive economy. We can see growth rising, we can see unemployment falling. I would like to see unemployment fall by a very great deal yet, it is still far too high. I want to see it fall very fast, nothing in this ruling will help that happen.

    I find it extraordinary that the EU cannot see the damage that legislation like this has done in the past, will do with this piece of legislation, and, perhaps most importantly of all, will do with further legislation like this that we have already been promised. So I believe it is a bad piece of legislation. I don’t accept that it is appropriate for the United Kingdom. We shall go to the IGC and we shall insist on reversing this legislation at the IGC and taking further measures there also to make sure that there can be no repeat of similar legislation in the future.

    QUESTION:

    [Mr Major was asked if he had a realistic chance of defeating this at the Inter-Governmental Conference]

    PRIME MINISTER:

    People asked me that question when I said I wasn’t going to accept the Social Chapter at Maastricht, but I didn’t accept the Social Chapter at Maastricht and our partners accepted that that was going to be the case. This is just as important, it isn’t just the question of this particular ruling, let me make that clear. This is a bad piece of legislation but it isn’t just that. It is the question that if we were to accept this piece of legislation, there would be a raft of similar legislation following it and I think the European Commissioner has already made that clear. There comes a time in those circumstances where you just have to say “No”, that this is not in the interests of the United Kingdom economy. It is not a question of being against good employment practice. I am very much in favour of good employment practice, but I want an economy in which we can create jobs not in which we put up barriers that prevent the creation of jobs. I would like British people back in work, not debarred from work because of the raft of legislation that makes it too expensive or too difficult to employ them. That is the point of issue, that is why we oppose this directive, that is why we are going to have it changed at the IGC and that is why we propose to have the Treaty changed so that this legislation is reversed and that no similar legislation can subsequently be imposed upon the United Kingdom.

  • PMQT – 14 May 1996

    Below is the text of Prime Minister’s Question Time from 14th May 1996.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Harry Greenway: To ask the Prime Minister if he will list his official engagements for Tuesday 14 May.

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

    Mr. Greenway: Bearing in mind the eternal anguish caused to families and the British people by the murders of my constituent Philip Lawrence and of the teacher and children of Dunblane, may I have my right hon. Friend’s absolute assurance that the Government will spare no effort to ensure proper security for schools and proper gun controls?

    The Prime Minister: As to school security, we have today accepted the recommendations of the working group that was set up by my right hon. Friend the Secretary of State for Education and Employment following the tragic murder of Mr. Lawrence, and we shall press on with implementing them. As to Dunblane, I have made it clear that when we have the chance to consider Lord Cullen’s recommendations and to consult other parties in the House, if legislation is found to be necessary–as I personally suspect it will–we have already set aside time in our parliamentary programme. I believe that there is a consensus in the House that schools should be secure places in which children can learn free from fear. Parents expect no less, and we will do all that we can to ensure that is the case.

    Mr. Blair: I support the Prime Minister in his welcome for the report on school security. Is not it a sad but true reflection of the need for such a report that in the past year, three in five schools have been vandalised by intruders and a high degree of pupils and teachers were actually assaulted by intruders? As well as accepting the working group’s recommendations, will the Government fully fund them–if necessary from within the current financial year?

    The Prime Minister: We have made it clear that there will be a Government funding programme over whatever period is necessary to follow through the recommendations. We have not yet had the chance to study the recommendations in full, cost them or determine how rapidly they can be implemented. However, we will not be seeking delay but seeking to carry out the recommendations as speedily as practicable.

    Mr. Blair: I thank the right hon. Gentleman for that reply. I am sure that he knows that vandalism costs a lot of money–so the sooner that action is taken, the better financially. Will the Prime Minister agree to the working group’s request to be allowed to examine the broader problem of behaviour in schools? Does the right hon. Gentleman agree that the routine violence suffered by many teachers in schools is absolutely intolerable? Given that there are 11,000 school exclusions every year, which is about treble the previous number, we would co-operate fully in any legislation designed to make the time limits for exclusion more rational and to render the entire system of exclusions more acceptable.

    The Prime Minister: There may be areas of agreement and I welcome the support of the right hon. Gentleman. As hon. Members will know, my right hon. Friend the Secretary of State for Education and Employment is examining this matter. It is important that we ensure proper behaviour in schools and proper sanctions by teachers. The Government would welcome support across the Chamber on this issue.

     

    Q2. Mr. Dunn: To ask the Prime Minister if he will list his official engagements for Tuesday 14 May.

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

    Mr. Dunn: Given that Sevenoaks district council, which is controlled by Labour and the Liberal Democrats, has just increased its council tax by a staggering and unprecedented 90 per cent.–which is a nightmare for council tax payers–does the Prime Minister agree with the maxim: “Dogs bark, cats miaow and socialists put up taxes”?

    The Prime Minister: My hon. Friend is being slightly unfair to the Liberal Democrats, who seem to have helped on this occasion with the tax raising. If one looks across local government, one sees that it is Liberal, Lib-Lab and Labour councils that ransack the pockets of council tax payers. [Interruption.] I am glad that Labour Members like extra taxes. This morning I read that the shadow Secretary for Employment wants to tax more as a sop to the trade unions.

    The Government see the removal of child benefit as a teenage tax. Many Labour Members want to tax anyone who earns more than the shadow Transport Secretary. [Interruption.] Yes, there is more. In Scotland, the tartan tax is an extra tax. The Labour party wants to tax business more with a minimum wage. There are plenty of opportunities for more arguments in the shadow Cabinet about the Labour party’s tax policy.

     

    Q3. Ms Lynne: To ask the Prime Minister if he will list his official engagements for Tuesday 14 May.

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

    Ms Lynne: In light of the recent remarks made by leading film stars and others, does the Prime Minister agree with me and with them that violence on television and in films can lead to horrific copycat killings? Will he put whatever pressure he can on the film censor to withdraw the video certificate from “Natural Born Killers” and to persuade the BBC not to broadcast it?

    The Prime Minister: I share the concern of the hon. Lady and the concern of millions of people in this country about the level of violence in feature films and, perhaps even more damaging, in videos that are readily available to young people. It is encouraging that the concerns are echoed by many people in the film industry. I have not seen “Natural Born Killers”, but everything that I have heard about it suggests that it is distasteful. I hope that the British Board of Film Classification will hear what the hon. Lady has to say, consider it with great care and act on it.

    Mr. Yeo: Has my right hon. Friend seen today’s reports recommending less confrontation in Parliament? Does he agree that the quickest way to achieve this will be for the parties that claim to be against crime to vote in favour of, and not against, the Government’s increasingly successful law and order measures?

    The Prime Minister rose–

    Mr. Yeo: In addition, the parties that claim they want to help British men and women into jobs should join the Government in saying no to the social chapter. In short, new Labour should finally tell the truth and say that the Tories were right all along.

    The Prime Minister: I am glad that I made way for the second half of my hon. Friend’s question; it was well worth waiting for.

    I am surprised by the apparent amusement of the Opposition about dealing with these important issues, when their policies would not deal with a single one of them. Opposition for its own sake is generally what we get from the Opposition parties; we have got used to that. If they meant what they said, they would change.

     

    Intelligence Headquarters (Germany)

    Q4. Mr. Dalyell: To ask the Prime Minister what discussions he has had with Chancellor Kohl about the arrangements made by the German intelligence chief, for showing Ali Fallahian, Iranian intelligence chief, round the Wiesbaden intelligence headquarters unit of the Verfassungschutz; and if he will make a statement.

    The Prime Minister: I have had no such discussions with Chancellor Kohl.

    Mr. Dalyell: As three official documents of the German Government, brought to the attention of the British Government, confirm that Iranian-orchestrated terrorism has operated out of Germany for years, and against the background that I and Dr. Swire of the Lockerbie relatives have brought to the Government’s attention before I asked this question, will the Prime Minister reconsider responsibility for Lockerbie in the light of what he now knows?

    The Prime Minister: We have very carefully examined all the documentation that has been made available to us by the hon. Gentleman and others. The alleged involvement of others in the bombing has been exhaustively investigated; nothing that has been presented to the Government has been lightly laid aside without proper examination. My noble and learned Friend the Lord Advocate has concluded, on the basis of all the evidence, that there is a case for the two accused Libyans to answer and there remains no evidential basis for bringing charges against the nationals of any other country.

    The case is not closed. If there is further evidence, we will of course examine it, but the evidence needs to be founded, not unfounded speculation. Any evidence of that sort should be provided to the police or the Government and it will be fully and properly examined.

     

    Engagements

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

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

    Mr. Rendel: Given that about 50 councils throughout the country are now left without a single Conservative representative, and given that probably, in those areas, on average, about 20 per cent. of the electorate still supports the Conservative party and votes for it, does the Prime Minister agree that the current electoral system is very unfair to those Conservative voters, and indeed to the Conservative party, in those areas, and that therefore it would be better to replace the electoral system with a fair vote system, which would ensure proper representation on each and every council for every significant group?

    The Prime Minister: First, I apologise to the hon. Gentleman for calling him an hon. Friend. I promise the House that that was not a leak suggesting that the hon. Gentleman will cross the Floor, but merely an indication that we anticipate having his seat back at the next general election.

    I do not remotely agree with the hon. Gentleman’s proposals for a form of proportional voting. The only implication of a proportional voting system in this country would be that the decisions that should be made by a Government, and on which a Government should be answerable, would be made behind closed doors by Members like the right hon. Member for Yeovil (Mr. Ashdown), the leader of the Liberal party, and others, and not made by the Prime Minister and Government of the day, standing at the Dispatch Box.

     

    Q6. Mr. Jenkin: To ask the Prime Minister if he will list his official engagements for Tuesday 14 May.

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

    Mr. Jenkin: As we await the return of the Family Law Bill to the Floor of the House, will my right hon. Friend consider a change of policy to allow for mediation and reconciliation between members of the shadow Cabinet, whose marriage of convenience appears to have been poisoned by the political gigolo from Hartlepool?

    The Prime Minister: They will have ample time for mediation and conciliation–perhaps five years after the general election–in opposition.

     

    Q7. Mr. Lewis: To ask the Prime Minister if he will list his official engagements for Tuesday 14 May.

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

    Mr. Lewis: Does the Prime Minister accept that refusal to act on guns before Lord Cullen reports smacks of vacillation? If the right hon. Gentleman has any doubts about yardsticks for tackling gun control, will he read the report of the Adjournment debate that I initiated on 3 May 1995? He will find that during that debate I made four sensible suggestions for the control of guns. That debate took place 12 months before Dunblane.

    The Prime Minister: I am sure that the hon. Gentleman would have made sensible suggestions. As for vacillation, I remind the hon. Gentleman that the hon. Member for Blackburn (Mr. Straw), the shadow Home Secretary, said the other day:

    “We shall . . . carefully consider all the evidence given to the Inquiry and the recommendations which Lord Cullen makes before coming to final conclusions.”

    It would rather seem that the Opposition Front Bench shares the Government’s view that there should be a proper examination of Lord Cullen’s report before conclusions are reached. I am sorry that there seems to be a split between the Opposition Front Bench and the Opposition Benches below the Gangway.

     

    Q8. Mrs. Gorman: To ask the Prime Minister if he will list his official engagements for Tuesday 14 May.

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

    Mrs. Gorman: Is my right hon. Friend aware that Marks and Spencer, that pillar of the British nation, has announced that if we were to be so foolish as to go for a single currency, it would have to spend at least £100 million on converting its tills, and that everyone in the high street would end up with bills running into billions? Does my right hon. Friend agree that we should bring these matters to the attention of the President of France, Mr. Chirac, when he meets him for discussions? I understand that the gentleman is quite keen on a single currency. Will my right hon. Friend ensure that he understands that underwear prices will increase in Marks in this country as well as in Paris, Lyon and all the other Marks stores in France?

    The Prime Minister: I think that my hon. Friend has brought matters effectively to the attention of many people. I am not certain whether they will directly reach President Chirac.

  • PMQT – 30 April 1996

    Below is the text of Prime Minister’s Question Time from 30th April 1996.

    PRIME MINISTER:

     

    Engagements

    Q1. Mr. Hinchliffe: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Mr. Hinchliffe: Has the Prime Minister had drawn to his attention the article that appeared in the British Medical Journal last week, which stated that the Committee on Safety of Medicines recommended the prohibition, for pharmaceutical purposes, of all beef products from potentially bovine spongiform encephalopathy-infected herds as far back as 1989? In view of that information, will he tell me why the Department of Health did not make similar recommendations about beef consumption at that time?

    The Prime Minister: I hope that the hon. Gentleman will weigh very carefully what he has to say in these matters. That is most emphatically not what his hon. Friend the Member for Peckham (Ms Harman) did some time ago. We take and make public the advice that is appropriate in terms of safety in this country. That is our responsibility and that is what we do.

     

    Q2. Mr. Michael Brown: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Mr. Brown: The right hon. Member for Kingston upon Hull, East (Mr. Prescott) and his cohorts on the Opposition Benches fall over themselves to try to get the votes of the gin and Jag brigade–the middle classes–but is the Prime Minister aware that it is the Conservative party that speaks for those in my constituency, in Cleethorpes and Immingham, who are still proud to call themselves working class? Is it not a fact that those people look to the Conservative party and the Conservative Government to ensure that they have the chance to buy their council house, to escape from trade union rule, from the closed shop, and to ensure that child benefit is protected for their children, who want better and further education? [Interruption.]

    The Prime Minister: The latest recruit to the middle classes, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), is heckling from a sedentary position. I hope that his arrival among the middle classes did not cause them too much distress. The policies that he advocates certainly would: higher taxes on people–[Interruption.] The right hon. Member for Kingston upon Hull, East says it on his aircraft. The shadow Transport Minister says it publicly and then does not subsequently deny it. There would be an extra tax, of course, on parents who have children at school between 16 and 18–a special tartan tax if someone happens to be a Scot. Those people can have that sort of tax as well. If someone happens to be a Londoner, they can have a top-up tax. Tax after tax. The Opposition know that that is their position. We are cutting taxes now. The Opposition plan to increase them.

    Mr. Blair: I think that what most people remember is the 22 tax rises since 1992, and VAT going on–from the Prime Minister who said that it would not.

    Is it correct, as has been reported today, that recorded crime in January and February of this year was substantially above recorded crime for the same period last year?

    The Prime Minister: The minute that was leaked, which has caused some correspondence between the hon. Member for Blackburn (Mr. Straw) and my right hon. and learned Friend the Home Secretary, is not accurate. When the figures are available to us, we will publish them in the normal way, but I understand that the leak that appeared this morning was not accurate.

    Mr. Blair: I hope that the Prime Minister will publish the full figures. [Interruption.]

    Madam Speaker: Order. The House must come to order–all of it. That includes the Front Bench below the Gangway.

    Mr. Blair: The same memorandum says that recorded crime has now risen for six consecutive months. Is that correct? Is it also correct that the trend in crime is upwards, as the memorandum additionally says? If those two points are correct, will the Prime Minister accept that, since the Conservatives came to power, crime has actually more than doubled?

    The Prime Minister: As I said a moment ago, we will publish the detailed figures at the usual time in the usual way; but, as it happens, parts of the figures in the memorandum that was leaked were wrong. Although monthly figures are always volatile, there is no doubt that crime fell in the last two months of 1995, so it cannot have just risen for the past six months, as the right hon. Gentleman said it did.

    If the right hon. Gentleman is concerned about reducing crime, perhaps he can explain to us why he and his party vote against every measure that we introduce to be tough on crime. Why do they always make excuses for the criminal, and ignore the pleas of the victims?

    Mr. Blair: This party was advancing constructive proposals for law and order while the right hon. Gentleman’s Ministers were still boasting about the numbers coming out of prison.

    If the Prime Minister says that parts of the memorandum are wrong, perhaps he will now tell us which parts are right. Perhaps, instead of talking nonsense about Labour policy, he will admit the truth about his own–that people are less safe in their own homes, less secure in their jobs and less confident of their future, and that it is precisely because of that weakness, failure and incompetence that people will be so justified in punishing his party on Thursday.

    The Prime Minister: That comment was a long time coming, and it was not really worth waiting for. We will publish the figures in the usual fashion at the usual time.

    As for being constructive on proposals, I am surprised that the leader of the Labour party thinks that he is constructive on crime. We reformed the right of silence; he opposed it. Was that constructive? We gave the Attorney-General the right to appeal against soft sentences; the right hon. Gentleman opposed it. Was that constructive? We increased the penalty for cruelty to children; Labour opposed it. Was that constructive?

    On issue after issue after issue, the Labour party shows that it is soft on crime. It is not prepared to take the measures that will attack the criminal and protect the citizen, and, however the right hon. Gentleman tries to make partisan points, that is what the public know about his policy.

     

    Q3. Sir Graham Bright: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Sir Graham Bright: Can my right hon. Friend confirm that child benefit for children who stay at school for a further two years to study for A-levels is worth in excess of £1,000? Can he also confirm that child benefit has its origins in tax rebate? If that were abolished, as Labour proposes, it would be equivalent to putting 5p on the basic rate of tax for the average parent. [Interruption.]

    The Prime Minister: I note that Labour Members laugh at the thought of 5p on tax for people on average incomes. So much for their claim that they would not increase taxes. Child benefit was a tax allowance benefit; it was made into a cash payment for mothers to ensure that it was used on behalf of their children. Now Labour proposes to provide a disincentive to stop children from staying on at school.

    Mr. Faulds: Don’t be so childish. You are Prime Minister, for God’s sake.

    Madam Speaker: Order. The hon. Gentleman must keep his cool.

    The Prime Minister: If the hon. Member for Warley, East (Mr. Faulds) studied his party’s policy on this issue, he would be right to be angry at the way in which it proposes to treat people up and down the country.

    Mr. Ashdown: The Prime Minister is, I believe, an honourable man. [Interruption.] Yes, he is. Will he therefore confirm that he understands that, if once again Conservative Members of Parliament try to change the Prime Minister, while denying the country the chance to change the Government, it will be totally unacceptable to all the British people? Will he therefore confirm that if, after Thursday, they try to get rid of him, he will ensure that we have a chance to get rid of the Government?

    The Prime Minister: I fear that the right hon. Gentleman is dealing in fantasy again.

     

    Q4. Mr. John Marshall: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Mr. Marshall: Will my right hon. Friend welcome the article in today’s Evening Standard about tube and bus fares in London? Is that not good news for Londoners, who can look forward to the extension of the Jubilee line, improvements to the Northern line, Thameslink 2000, the Heathrow to Paddington link, improvements to the docklands light railway and the Croydon tramway link? Does that not show that we act, and the Greater London council just talked?

    The Prime Minister: My hon. Friend, who has been lobbying on many of those matters for many years, has clearly studied the transport document with great care. He is of course right. It is good news for passengers in London, and so of course is the policy of capping fares. We expect London transport fares to rise at a significantly lower level than in the past as part of a strategy of making public transport more attractive.

     

    Q5. Mr. Mike O’Brien: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Mr. O’Brien: With reference to the previous question, which the Prime Minister did not really answer, will he say whether he has ever discussed an understanding whereby, if the Conservatives do not do well in the local government elections this week, he will make way for the Deputy Prime Minister? We need a reassurance on that, as the Prime Minister must understand. Will he take it from me that he has the support of much of the House to remain leader of the Conservative party up to a general election? He has the support of at least half the Conservative Members, and of every Labour Member.

    The Prime Minister: I suspect that the hon. Gentleman is in mischief-making mode–[Interruption.] Clearly, he was not; clearly, he was just being silly.

    Mr. Pawsey: My right hon. Friend had a very successful breakfast meeting with business men in Warwickshire on Friday. Will he therefore repeat, for the benefit of the House, the points that he made about the social chapter and the damage that it would do to employment and prosperity in the United Kingdom?

    The Prime Minister: I noticed over the past few days that countries abroad, particularly Germany, are now beginning to take action to bring down some of the high social costs that have created fiscal difficulties and unemployment in their countries. In this country, we are not prepared to have a social chapter, which is damaging as it stands but would be infinitely more damaging if we signed it, the rest of Europe brought their social expenditures into the social chapter, had them approved by qualified majority vote as they could, and then imposed them on British employers at the cost of British jobs. We are bringing unemployment down. I intend to see it come down further. I do not intend to take this country into the social chapter, to stop the fall in unemployment and to see it begin to rise again. That is no bargain for the British work force.

     

    Q6. Mr. Foulkes: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Mr. Foulkes: Does the Prime Minister realise that not only is his deputy after his job but the Home Secretary and the Health Secretary are as well? We therefore need a categoric assurance that, however many seats the Conservatives lose on Thursday, the Prime Minister will lead his party into the next general election. As my hon. Friend the Member for North Warwickshire (Mr. O’Brien) said, the Prime Minister has the support of almost half his party, and the support of all the Labour party.

    The Prime Minister: I think that the hon. Gentleman heard what I had to say just a moment or so ago, and I have no intention of accommodating his silly questions.

    Mr. Peter Bottomley: Given the interest in what happens after the next general election, did my right hon. Friend see the poll in The Times at the end of last week, which showed that the majority of people expected that, if there were to be a Labour Government, unemployment would go up, interest rates would go up, inflation would go up and there would be more control for the unions? Is that not the real reason why the Labour party wants to delay an election for as long as possible?

    The Prime Minister: Of course people would expect that of a Labour Government. People know from experience that that is what has happened with every Labour Government we have ever had at any stage in the past, and that that would occur again–unemployment up, interest rates up and tax rates up. There is absolutely no doubt that that is what happened in the past, and that is what would happen in the future.

     

    Q7. Mr. Gordon Prentice: To ask the Prime Minister if he will list his official engagements for Tuesday 30 April.

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

    Mr. Prentice: Does the Prime Minister appreciate that this is the last day of work for Mr. Cedric Brown, who retires with a pension of £250,000 and a continuing consultancy with British Gas of £144,000? Does the Prime Minister care to comment on today’s press release from the North West gas consumers council, which states that complaints in the north-west region increased by 97 per cent. last year? Does he believe that Mr. Cedric Brown warrants that largesse?

    The Prime Minister: I believe that when people get an unsatisfactory service they are right to complain. They are right to complain to British Gas, and, now that British Gas is in the private sector and faces competition, people can expect that their complaints will be taken seriously, which they certainly were not when British Gas was in the public sector–when prices were rising dramatically and when the service was falling. Under plans for competition–for which I see no support from the Labour party–people who are not satisfied with British Gas will have the opportunity of going elsewhere. That is what competition means.

  • Mr Major’s Speech in Rugby – 26 April 1996

    Below is the text of Mr Major’s speech in Rugby made on Friday 26th April 1996.

    PRIME MINISTER:

    Let me touch on a number of things including prospects and some of the things I may say to you over the next few minutes may perhaps surprise you, but I hope pleasantly in a range of ways. Let me firstly just set out precisely where we are economically and how we got there.

    It is not all that long ago that we and the rest of western Europe, the United States, Japan, most of the world in fact, south east Asia perhaps excluded, were in the midst of perhaps the most severe recession that we had seen for 20 years or more. When we went into that recession, I made a promise to myself and to my colleagues that we have kept and that is vital for the future of our economy. The promise I made was this: we will do nothing during the recession that will mean when we come out of the recession we have laid the seeds for future problems. Time and time again that has happened in recessions, as economic cycle succeeds economic cycle since the War we have seen that problem. Recession, pressure, the Government takes action, it gets out of the recession but the seeds are laid for a fresh inflationary spiral and we go, after another move in the economic cycle, back into the same problems. How many times have we seen that happen since the War?

    I have had vivid experience of inflation. You have of course as businessmen, you know the perils of it, I needn’t spell them out to you, but I have to say to you, quite apart from the business perils there is a social implication to inflation as well that I feel extremely strongly about, too strongly perhaps you may feel but I will express it for you:

    If you have ever been in a position where you wonder at the beginning of the week whether your family can pay the bills at the end of the week because the prices are going up, then you begin to see inflation not as some abstract economic theory but as something that threatens the very security of the way you live so I loathe inflation and I make no secret of the fact that I loathe it and we have taken every precaution we can to prevent that inflationary genie escaping from the bottle again and what is the result of what we have done during the period of the recession. And I would like you to bear in mind when I say that that we have lived in the same economic climate as our partners in Germany, France and other parts of western Europe. What are our economic circumstances now?

    We have inflation under 3 per cent for the third successive year and it is still going down, we will hit our target of 2.5 per cent or less at the time of the next general election. Apart from the social implications, you don’t have to worry in your future planning in the way you once did about whether Your investments are going to soar in cost because of inflation or whether the projections upon which you based your investment will suddenly fall apart. That is the first point to be made.

    The second point is that a very unusual economic trick has been pulled. Not only has inflation come down but contrary to what we have often seen, inflation has come down in parallel with unemployment. Unemployment has dropped by three-quarters of a million in the last couple of years or so.

    What has happened elsewhere in western Europe in those countries in the same markets, in the same economic environment? As our unemployment has fallen steadily, theirs has gone up. If you look at Germany, their unemployment rising far higher than ours; in France, their unemployment round about 12 per cent, stuck, no sign of it coming down. We are below 8 per cent and falling. And neither is that a false measure. Not only do we have a lower rate of measured unemployment, we have a higher percentage of our workforce actually in jobs than any major economy across Europe through inflation below 3 per cent and falling and unemployment falling. There are not a lot of people in this room who will remember when that combination was as secure as it is at the present time.

    Has it been done at the expense of nil growth? We have had larger growth in our economy over the last couple of years than our competitors across Europe; that is going to be the case this year, it is going to be the case next year, so low inflation and falling, too high unemployment but lower than anybody else and falling and growth as good or better than any of the other European countries. What has happened to competitiveness? You know very well what has happened to competitiveness. We are now taking markets we haven’t had for generations in this country, exports are running at record levels. Go and listen not to what I say – I suppose there is an element of “well, he would say that, wouldn’t he?” Go and see what German industrialists and other people say, have a look at the booklets on your chairs and see what businessmen here and politicians and businessmen abroad have to say about the British economy. There was a time when we stood here and looked at the economies of our competitors and wondered how they did it. I wish the extent of fashionable opinion in this country would wake up to the fact that that is now happening in reverse; those countries abroad are now looking at Britain and saying: “What has happened to her? How has she suddenly produced an inflation record like this, a job-creation record like this, a growth record like this and increased her competitiveness?” so that as we meet here today, we are probably the most competitive industrial nation in western Europe.

    That is where we are, the question is what do we do with it because that factor is apparent. What we have built is the platform for future prosperity but the prosperity itself needs to be built and it needs to trickle down to the people up and down this country who by their efforts have played a part in creating the opportunities that now lie in front of us.

    We had to put up taxes, something I loathed doing but it was taxes going up or high borrowing and interest rates going up instead. But now we have begun to reduce taxes, the first tax reductions are in this month’s pay packet and they are well worth having. I hope we will be in a position to do more, as soon as we prudently can, we most certainly will.

    Let me touch on two or three other things:

    Peter mentioned the social chapter. That is one of the principal reasons why we are more competitive than other countries. Not the social chapter as it is but social expenditure as it is across Europe. Let me give you the figures:

    For every £100 in wages that a British employer pays, it costs them an extra £18 in employers’ national insurance contributions and on-costs of that sort. In France, Germany, Spain and Italy, it is between £30 and £45, a huge competitive difference.

    Why does the social chapter matter? Our political opponents say it is a set of principles – a set of principles like Cathy of Clade [phon] was conductor of music! It is not a set of principles. These are policies that you can’t opt out of once you sign the social chapter and the problem is not what is in the social chapter today, it is what would go into the social chapter once every European country was signed up to it and what would go into it is the sort of social provision that exists in the nation states of Europe but not here but that would come into the social chapter by qualified majority vote to diminish our competitiveness against our partners were we to be so foolish as to sign the social chapter. Let me give you a couple of illustrations:

    There are some very large companies in countries like Germany and Austria; if they had to make staff changes perhaps for an extremely good economic reason, they can’t do it without going through a works council if they have more than 5 employees. If you want to work overtime in the country of one of our European competitors, you actually have to get permission from the government in order to work overtime. Can you imagine the questions? “Are the staff fit? Is it Sunday? How much are you paying? What is the reason for this?” By the time you have sorted all that out, the export order for which you wanted your workers to work overtime has gone to Britain I hope, because we are beginning increasingly to be able to [indistinct].

    Let me just say a word about taxes:

    All the figures upon which people can base their broad tax projections are in the public sector. You can’t be detailed, I accept, but the broad figures are there, there is nothing hidden, our accounts are as open as the accounts of any nation in the world so anyone can have a pretty good idea what their tax objectives are, they don’t have to hide behind obfuscation and downright deceit.

    My tax objectives are perfectly transparent and clear. As soon as I am able, I wish to reduce taxes further and I wish to go down to a 20 pence basic rate of tax, I am not changing the upper rate of tax and then I want to tackle capital taxes because I think they damage the market, they damage job creation and what we need is job creation and a competitive environment to keep our people in work and to put more of our people in work. These are our objectives.

    What are our opponents’ objectives? It is very difficult to say. When asked privately, the leader of the Labour Party said: “We aren’t going to touch people up to £30,000!” which I would have thought to any rational observer would have meant they are going to touch people earning over £30,000 but after that remarkable slip of the tongue, one of the leader of the Labour Party’s minders rushed along to the press to say: “He didn’t say that, he didn’t mean it, it never happened!” Claire Short – bless her honest, cotton-picking socks! – [laughter] seems to think it should happen; she is very well paid. Mr. Prescott is middle class, he is very well paid! Nobody doubts where the instincts of the Labour Party lie or what will happen. I don’t know what the editors of some of the great Labour-supporting newspapers who earn large sums of money think, I hope they have worked out how much it is going to cost them if the upper rate of tax goes up from 40 pence to 50 pence which is the minimum demand of the Labour Party in the House of Commons or perhaps 60 pence but certainly a very expensive proposition.

    The people I am concerned about are the people up and down the country who at the moment are being told one thing by the leadership when it is transparent that that is not remotely what their position would be likely to be were they in government. That tax slip of Mr. Blair’s was brushed to one side. Gordon Brown was a bit more explicit on another aspect, on child benefit. Because he is being pressed on tax, he decided he had better display a touch of virility so he decided to announce that he was going to take away child benefit for people with families of youngsters between the ages of 16 and 18 who decide to stay on at school. Let me say something about this:

    I left school at 16. I didn’t leave school at 16 because I didn’t want to stay, I didn’t leave school at 16 because my parents wanted me to leave school at 16. I left school at 16 because we could not afford for me to stay at school and I chose to go out and work; my parents didn’t like it but I chose to go out to work.

    If you take child benefit away from any youngster in any family, perhaps a low-income family, perhaps not but very many families on low incomes are desperately keen that their children should have a better education, a better opportunity, a better chance than they ever had and these days 1 in 3 of our youngsters go through A-levels and on to university and I am proud of that and I defend the expenditure to make sure that that is possible but if in future Labour were to carry out this plan and have the opportunity, you have a youngster of 16, 17 or 18 going on to A-levels, as they should, they will lose a £560 child benefit every year for each child. Most families have two children, often only a couple of years between them, you will get a rolling effect that dwarfs any tax changes we have seen for generations and how well-targeted it is, targeted directly upon many of the people who have the lowest incomes in the country – £560 a year gone.

    Apart from the stupidity of that in inhibiting youngsters whose parents have modest incomes going on to further education, it is thoroughly dishonest for this reason: child benefit was a tax allowance. We changed it from a tax allowance to a cash benefit payment so that it actually went directly to the mothers to be used predominantly for the children because of concerns that that wasn’t happening. What would be happenings is you would be taking away a tax allowance and what is the equivalent in tax? For someone on average earnings, that is the equivalent of an increase of 5 pence in the pound on the standard rate of income tax if that was actually withdrawn from families. That has crept out without the Labour Party realising exactly what it would have meant for people. If that has crept out under pressure, I would like to know what else is lying hidden that needs to come out and that we need to examine before we get towards the next general election.

    Peter asked whether we are going to win. I remember Peter asked me that before the last general election. [Laughter]. I look forward to Peter asking me that before the next general election but one and I will give him the same answer: yes, we are going to win and I will tell you why we are going to win:

    We are going to win because when you strip away the absurd hyper-exaggeration of everyday news events, what is happening in this country at the moment is that we are producing the most stable economic platform that we have seen for generations. What a tragedy it would be if, having gone through all that has happened in the last few years to create that environment and that opportunity, it were to be casually tossed away with the sort of policies that a change of government would bring about.

    I don’t think that will happen but I don’t base my confidence only upon the economy though I am confident about the economy. I base it on one or two other things that hit here [touching part of body?] rather than in the wallet and the first of those is the proposal for constitutional change that our opponents have. If you wanted to draw up a recipe that would divide and break up the United Kingdom, you would draw up the proposal fox constitutional change and particularly a tax-gathering parliament in Scotland that the Labour Party have committed themselves to. Once you get that parliament in Scotland, within a measurably short period of time if you are going to have the parliament, you would have to have a Labour government and Labour governments; like all governments, become unpopular.

    Mid-term elections in Scotland and who is likely to win? There is a possibility that the Scottish Nationalists:- separatist party openly declared for separatism – would become the majority party in the Scottish parliament and what mandate are they going to claim? Is it really credible to have a Scottish tax-gathering parliament and still have public expenditure from the rest of the United Kingdom spent in Scotland at a much greater level per head of population than it is in England? Of course it isn’t practical. Is it practical to have Scottish MPs at Westminster voting on matters that affect England while the same English MPs in England cannot vote on the same matters affecting Scotland? What sort of recipe for chaos is being unleashed with its ill-thought-out porridge that they are producing for Scotland?

    What have they got against the Scots that they should pay more taxes? What have the Scots got against themselves that they could contemplate any party that would want them to pay more tax?

    Then there is the question of Europe. No issue has been more explosive, no issue has been more misrepresented, no issue has been more conducted in stereotypes with the debate often determining itself only on the fringes of argument – those who are fantastically opposed to Europe and those who are fantastically in favour of Europe. There is a middle and it is a very large middle. I don’t know how many of the businessmen here have half their trade going to the European Union and back but I bet a majority of you do because half of all our trade goes to Europe and back so we have a real interest in playing a constructive role and arguing our case. Removing our influence and standing on the outskirts would mean that the problems that we are having with beef, where I am in great dispute with our European partners, could be magnified over a whole range of issues if we were outside the European Union or not playing a part in trying to determine the rules of the European Union but that doesn’t mean we are going to go into a federal Europe.

    I can tell you quite frankly I have no intention whatsoever of going down the route to a federal Europe. I just don’t believe it would be right for Europe to go in that direction and I know that it would not be right for this country to go in that direction and we have no intention whatsoever of doing so. We will argue the case, we will debate the case, we will win the case – in which case all is well – or we will not win the case and we will just say “No! You can go in that direction if you like but we are not!”.

    At Maastricht, we had huge disputes. Nobody truly believed that I would come back from the Maastricht debates having said “Non to the social chapter and “No” to a single currency with the opt-out. The City didn’t really believe that, none of the newspapers believed it. If you promise not to tell anybody, even some of my colleagues in the House of Commons didn’t believe it! [Laughter]. I know you will find that hard to believe [laughter] but I promise – and tell not a soul – that they didn’t. But at the end of the negotiations there was a choice: no treaty at all because it is agreed by unanimity or recognising that Britain has a distinct view and we are not going to be pushed in that direction.

    At the inter-governmental conference in front of us, the same principles will apply. I have set out with great clarity what our negotiating position is in the negotiations and if I have to say’ “No” I will say “No”. I did before and I will again, not because of parliamentary pressures at home, not because of public opinion at home – not just because of those things but because what is in the White Paper on Europe is what I believe about Europe and I have to say I am pretty fed up with the absurd commentary which says you either have to be on one wing of the European argument or the other wing to have any views at all. Well my views are very clear. On one hand, I am being told always that I am shifting my position, on the other I am being told I am being told I am too stubborn and why don’t I listen to people. I am happy to accept one of those if someone can make a credible case for it but I am just a touch concerned that having both of them often on the same day on the same page of the same newspaper written by its seems to me the same person who clearly is not perhaps wholly convinced of his case.

    We are not going down the federal Europe route but our political opponents are, the Liberals because they believe in it, the Labour Party because they believe it is fashionable. I just believe it is wrong and when we come to the general election that will be a big division so there will be divisions on tax, divisions on the constitution, divisions on Europe and great divisions on education and other matters.

    The fact of the matter is, Peter, when people come to vote in a general election, forget the nonsense of by-elections, the protests – “Oh my God, I’m sick of those people, let’s not bother to come out and vote today!”. You have got real issues, issues that affect the family, the money, the future, the country and upon those issues I am perfectly prepared to take my Conservative case to the country and just as I recall at the last general election as we entered the last week 7 or 8 per cent behind on the Sunday before the election, with every newspaper writing us off and wondering what Mr. Kinnock was going to do in Downing Street, I didn’t believe the polls then, I don’t believe them now, I thought we would win then and I was right, I think we will now and I will be right again. [Applause].

  • Mr Major’s Speech to the Institute of Directors – 24 April 1996

    Below is the text of Mr Major’s speech to the Institute of Directors in London on Wednesday 24th April 1996.

    PRIME MINISTER:

    Mr President, Ladies and Gentlemen. A few moments ago, David, you encouraged us with details of your latest business confidence survey. I suppose I might call it a sort of alternative news summary on how I hope it forms the basis of the real news summary in the days that lie ahead. Clearly what is happening in the economy is of crucial importance to all the plans we have.

    What I think that survey confirmed is what many of us have felt for some time: the economic prospects are bright, they will get brighter, and increasingly we have a lot to be confident about in this country. And I think it is time to be positive – I hope that message will be carried through to people up and down the country. This pervading atmosphere of gloom that so many people have perpetrated does no good to them, no good to the country, no good to our prospects and there is no conceivable justification for it. It is about time for the gloom-mongers to depart and for us to look more clearly at the prospects that lie ahead.

    The centre of your debate today is Europe. And firstly this morning I want to set out my view of the opportunities it offers and the fierce debate that almost invariably surrounds it. I would like to set out how I see the future of Europe over the coming years and what I see as Britain’s place in it.

    For the last 30 years, Europe has been the great explosive issue of British politics. Our membership of the European Community, as it was then called, was confirmed in a referendum in 1975. Today there are some who question that membership in each political party and in the media.

    I understand the concerns and frustrations that lead to that questioning, in many ways I don’t find it surprising. For years past some have portrayed Europe only in the most negative terms. Every frustration is played up, often inaccurately; every benefit denied at worst, or ignored at best. And in these circumstances it is little wonder that the European Union has become so unpopular in the United Kingdom.

    But there is another side to the picture. I also see clearly the hard-headed benefits that Britain has gained from its membership. And as Prime Minister, I believe it does the country no service whatsoever to suggest that the only choice we face is either to go along with every demand our partners make, or to head for the exit. That is naive, it is damaging and in my judgment it is just plain wrong.

    We are in Europe and we all know that we are staying in Europe. And anyone who seriously thinks of leaving should perhaps explain to the nation precisely what that would mean. What, I wonder, would be the impact on inward investment, which accounts for three-quarters of a million jobs in manufacturing alone? Would the Nissans, the Toyotas, the Samsungs still be so keen to come here if we were not playing a leading role in the European Union? What would be the effect on the city and the great exporting companies were we to leave the Union? Would we be taken more seriously, or less seriously, in the wider world? And why have more and more countries in Europe, including some of the most prosperous, decided to join the European Union in recent years?

    Some suggest we could just negotiate a trading relationship with Europe. But I must be frank with you. The idea that if we were outside the European Union we could somehow become a trading haven on the edge of Europe, with all the benefits of that vital market of 370 million, while others fix the rules without any regard whatsoever to our vital national interest, seems to me to be cloud cuckoo land. This country is an international trading nation, it is not a little England, and it must never become so.

    So the first point is, we are staying in Europe, that is not in dispute. But the second is where the battle must be joined, and that is what sort of Europe are we staying in, and how do we address and remove the legitimate concerns that so many people have in this country?

    Let me be frank. Some politicians in Europe do have an agenda of ever greater integration, an intent to subsume states into common institutions in order to prevent the re-emergence of old national ambitions and rivalries. And they believe in that integration just as passionately as many of us oppose it.

    I understand and I respect their views, they reflect the long experience of wars and conflicts right across the continent – a different experience from ours in this country. But I don’t believe they are the right way to develop European cooperation. The nation state that we care about so much lends security, comfort and familiarity and people need that more than ever at a time of change and insecurity.

    You cannot legislate for a common nationality or a common sense of identity. The nations of Europe have developed over centuries, their cultural traditions can’t be eradicated by a simple stroke of the pen, and nor should they be. That would not carry the consent of the peoples of Europe, whether in Britain or elsewhere. And if politicians ignore those realities we would increase rather than reduce conflicts and tensions across Europe, we would set at risk all that Europe has achieved.

    So we in Britain are not going down that centralising route. At Maastricht I said no to policies that I thought would be damaging to the interests of this country. And if I had not won on those critical issues, there would have been no treaty for there would have been no agreement. And equally on the intergovernmental conference we have set out our position. Nothing can be imposed upon us in the intergovernmental conference unless we agree to it. And if it isn’t in our interest, I will not agree to it, I will just say ‘No’.

    But I don’t seek confrontation and nor do I expect it. In negotiation the European Union can be tough, but in the end it must respect and accept the vital interests of its member nation states.

    There are things that we don’t like about Europe, but we must fight them on the arguments, not on the basis of stereotypes and slogans, they do no good to our interests or to our prospects of success. And my personal view is quite clear. Although there are many things in Europe we would like to change, there is a lot that helps us. The balance is in our advantage. Not every decision, of course is exactly what we would have liked, but neither is every decision comfortable for every other country. We aim to build in the years ahead, in the conference and beyond the conference, a Europe that is more in our image and more to our taste. If we win the argument to build a Europe of nation states, all of Europe will benefit. Equally, if others choose to go in a direction that we reject, they need to recognise that we will stand our ground and not follow them in that direction. The Europe that evolves will be flexible, and it will need to be flexible to recognise and accommodate our national interests and beliefs, as well as theirs.

    The European debate must take into account not only national interests and sensitivities, but economic realities. And upon those economic realities I want to concentrate for a few moments. Today we live, as no audience knows better than this one, in the most competitive business environment we have known. Competing against countries around the world is an everyday reality. The man in the street in Manchester, Milan or Munich is not only competing with someone else in Europe, he is up against someone on the other side of the globe as well working in Seoul, Shanghai or Singapore. And we compete successfully or we fail, and if we fail, we go out of business. And that is the main challenge facing all businessmen. We need hard-edged policies to address these challenges. Business must win the battles for contracts, not government. But the decisions that government make, and the policies they follow, can help or they can hinder. And if governments get things badly wrong, they will condemn their businesses inevitably to defeat.

    Many people talk about competitiveness, but over 17 years of government our commitment to competitiveness is a matter of record and an article of faith. To be competitive we had to overcome problems that have beset Britain for generations. In the 1980s we tackled the excessive union power that was throttling British enterprise, and Norman Tebbit will speak to you later, and your own President, had a key part in that particular battle, so successfully won.

    In the 1990s we have inflation at the moment under better lock and key than it has been for generations, and it is never a battle that is permanently won, and if we were to take the arm-lock off inflation, we would begin to face the problems we have seen in previous years. For decades inflation was the scourge of the British economy, fuelling industrial strife, discouraging investment and making long term planning quite impossible. Now we are enjoying the longest run of low inflation for nearly 50 years.

    And not only is that vital for business. If anyone has ever lived in circumstances in which if the bills go up at the end of the week it is difficult to know how they will be paid – they will understand the true wickedness of letting inflation get out of hand and I have no intention of letting that happen again.

    In the 1980s we began to return to the private sector businesses that used to be badly run in the public sector at the taxpayers’ expense. They are now profitable companies bidding in markets the world over.

    In the 1990s we have tackled the more difficult privatisations, such as coal, successfully privatised in 1994 and now the most efficient coal industry anywhere in Europe. On rail, impossible according to some, quite extraordinary people decided they weren’t in favour of the private sector running British Rail. I sometimes think they forgot who built up the rail network in the first place. And yet that privatisation is now well under way and delivering benefits – new services, new investment, new improvements to stations and in my judgment a much better service for the train user is certainly going to come about as a result of these changes.

    Always, right the way through the ‘80s and right into the ’90s, there was always someone saying that each privatisation was one privatisation too far – mustn’t do that, it is change, it is uncomfortable, it is trusting that wicked private sector with something that has been run so comfortably, but so inefficiently, in the public sector. So those pessimists were wholly wrong, they have had to eat their words as one privatisation after another has proved to be a success.

    And above all, to be competitive as a nation we have had to get spending under control. It is now coming down again and tax rates have come down with it. British business now has the second lowest burden of business taxation of any G7 country – 6 percent of GDP in Britain, compared with 9 percent in Germany, 14 percent in France.

    We now have an economy that is more successful and has better prospects than for a generation. No longer do we look at our European competitors and wonder what their secret is, now they are beginning to envy our success here in the United Kingdom.

    Across Europe they know that Britain is the number one destination for inward investment in the European Union, second only to the United States worldwide. They know it is Britain that has Europe’s leading financial centre and the lion’s share of Europe’s most profitable companies. They know it is Britain that has got the lowest unemployment of any major European country and more of our people actually in work than any other major European country. They know that Britain has grown faster than the G7 average each year since 1993 and is expected to do so again this year and again next year.

    We have in place all of the ingredients for a rapid growth in prosperity. Life is better, and it should get better yet, but not if we turn our back on the policies that have carved out these opportunities in the first place. Not if we are seduced by candyfloss promises instead of continuing to make the hard choices. Only if we keep on sharpening our national competitive edge will Britain be able to go on winning in the fierce global market place.

    I want Britain to be in the front rank of industrial nations. So I have a clear objective for this country’s future – to make Britain the enterprise centre of Europe. That means policies that build on our strengths and it means we must learn the lessons from the world’s fastest growing economies. It means sound responsible economic management – easy to say, not so easy to deliver. But inflation has wrecked too many, recoveries in the past for us to risk throwing that prize away now. It means finding room to reduce taxes by keeping the lid on public expenditure. That is the only way to keep taxes down and then to get them lower still. And that is why, as the economy grows, we are committed to getting spending back down below 40 percent of national income and keeping it there, and that compares to something over 50 percent amongst our partners in Europe. And as we do so, we will press on towards our target of a 20 pence standard rate of income tax and the abolition of capital taxes.

    We need an enterprise culture that runs right through society, one that encourages the belief that individuals can themselves, by their own efforts and their own actions, make a difference. And that is why I am determined to stand up for the risk-takers, whether it is the people who are ready to take on and run a piece of the railway, or the companies that will shake up our gas, and electricity, and water markets as competition comes, or the thousands upon thousands of people up and down the country who risk everything they have to make their own small business a success.

    And I want more people to have a stake in enterprise. In the last budget, Ken Clarke made it even more attractive for companies to get their workers involved as shareholders. Now it is up to industry to play its part. Many of you of course already have employee share schemes and I hope more of you will. My challenge to you is simple, let us see if we can have a majority of workers in Britain’s large companies holding shares in those companies by the end of this decade. It is eminently achievable and it will do a great service to the spread of capitalism.

    Britain is a global trading nation and will remain so, that is both our history and our future but what we trade in will change. Much of tomorrow’s trade will be in information, in technology, in software, in communications and here Britain, with its skills and culture, its trading links right across the globe and the huge incalculable advantage of the English language, is well equipped to take on the world and to win those battles but we can only do it if our young people have the skills they need and that is why progress in education is so important and why we have continued so rigorously with our education reforms.

    We have seen a massive explosion in the number of people going into higher education in recent years. In 1979, 1 in 8 of our young people went into higher education; today, no longer 1 in 8, today it is 1 in 3. We are making progress in schools through the national curriculum, through tests and inspection and league tables and vocational education. We are shining a searchlight on the things that went wrong in education. Sometimes, when they become apparent it is embarrassing but it is better to be embarrassed and to have the information so that we can put it right than to let education remain a secret garden when we are not turning out the right sort of skills in our youngsters that industry will need and that they will need for their own life satisfaction.

    But we mustn’t only look at the schools. We need to ensure that every adult in Britain understands the opportunities to learn new skills, to take advantage of new technology at work or at leisure. We need to open the nation’s mind to the opportunities that lie ahead so we are getting together with industry on a project for the millennium to let as many people as possible try out computers in schools, in libraries, in shops in the high street, wherever it can be arranged to give them the opportunity to see for themselves and to develop the skills that will equip them and all of us for the changes that lie ahead as we move towards the new century.

    Our route to success in the challenging, competitive markets of tomorrow is built upon sound finance, low taxes, the liberation of enterprise, the skills and the capabilities to compete and a global trading ambition to reach out for the markets of tomorrow. Indeed, I believe that is the only way to deliver the wealth, the prosperity, the jobs, the opportunities that this country needs and that the people of this country deserve. It is the only way to meet the challenge of the future.

    We would like all of Europe to adopt competitive policies and succeed. There is nothing altruistic about that. We have nothing to gain here in this country if the market on our doorstep goes into decline and if Europe does not put competitiveness at the top of its agenda it will decline and that is why I regret so much that Europe has not yet completed the single market. It should and soon, starting perhaps with some concrete progress on the single market for energy. Energy bills account for a huge proportion of industry’s costs and Europe’s businesses can ill afford to pay over the odds for it.

    The same goes for telecommunications. Thanks to privatisation and liberalisation, prices in Britain have tumbled by almost 24 per cent in real terms over the last 5 years. That hasn’t happened in other countries, in the Netherlands for example, where prices have increased by more than 6.5 per cent over the same period, a 30 per cent difference with the drop in the United Kingdom. Here at least, though, there is the promise of progress.to complete the single market with full liberalisation due by 1998 and what a shame as well that negotiations to create a single market in pension funds have come close to stalling since some countries are simply not willing to give up their national captive markets.

    Europe as a whole is never going to compete and win in the world if it cannot even bear competition in its home market so Europe must proceed to complete the single market as soon as possible.

    Nor can it be right or justifiable that Europe still tolerates huge state aids for some countries’ air lines – that just rewards inefficiency and punishes success – and here too the result is higher prices when what Europe needs is the lower prices that competition and deregulation will surely bring.

    I understand, I know why people are reluctant to change, they want to protect jobs. We all want that but jobs are most secure when companies are most successful. The social polices of some of our partners sound very attractive and they advocate them with great self-belief but I believe they are misguided and they destroy jobs. Across Europe, companies are feeling the pain. Much of Germany’s new-job creation is now in Poland or the Czech Republic and in Britain too which, according to the President of the BDI has “the most effective job-producing machine’ in Europe” and I agree with the President upon that point.

    In France last month, Brittany Ferries tried to get the government to cut the social costs it must bear as a French employer with a French workforce. Employing 2,500 workers, it claims that it pays up to 18 million pounds a year more than would be paid by a similar British employer. A spokesman was quoted as saying that he wanted “to level the playing field, to find a way of giving us the same overheads as Britain.” Again he is right. He asks for that with good reason.

    The difference between our employment costs and Europe’s is stark. For every £100 he pays in wages, a British employer has to add £18 in non-wage costs. Quite enough you might think but in Germany not £18 but £32; in Spain £34; in France £41; and in Italy £44 and that is the measure of the cost of excessive regulation and that explains also the attitude that I took and take upon the European Social Chapter. Those costs explain why it would be against our interests to be part of the Social Chapter.

    Let us be plain about it! It isn’t just what is in the Chapter now, it is also a question of what would go into the Chapter if Britain signed it. The Social Chapter isn’t a finite list of specific measures, it is a mechanism, a mechanism to implement unspecified social policies in many cases by qualified majority voting so we would have no veto to protect British businesses. If we signed up to it, we would emphatically not be able to pick and choose which bits of it we wanted and at the moment the British opt-out focuses minds on the Continent on the competitive cost of more social regulation, it acts as a brake on further measures but if that brake went, if we signed it, if we were part of it, we would then see an avalanche of new measures building on other countries’ existing traditions and many of those measures would be precisely the sort of policies that we have spent the last 17 years getting rid of and I don’t want them back on the backs of British industry and British employers. [Applause].

    Look at the sort of over-zealous – I think that describes it accurately – over-zealous employment regulations some of our partners have at national level. For example, in Germany, if your firm has more than 5 permanent staff you can’t cut staff without consulting the works council, pretty inconvenient I would have thought for huge companies striving in a very difficult market and if you want to work overtime in Luxembourg, you need government consent to work overtime. I could give you further examples but I will spare both you and our partners from them.

    Just ask yourself this question: If all of Europe were in the Social Chapter, we signed up to it and became part of it, wouldn’t it be more tempting and less painful for our partners to try and foist the same rules on everyone rather than putting their own house in order? The answer to that is self-evident, of course it would and that is why we shouldn’t sign it. The Social Chapter could make jobs one of our fastest-growing export businesses and that is not in our interests.

    Mr. President, at Maastricht I negotiated what became called “an opt-out from the Social Chapter”. That will remain but it must remain effective and in some ways there is a risk to it at the moment. I am not prepared to see that opt-out, undermined by the creative use of other articles of the treaty such as health and safety at work. We agreed those provisions in 1985 to deal with matters of genuine health and safety. Recent attempts to use them as the basis for imposing the working-time directive on Britain go far beyond what we agreed to and not only that, they breach the understanding I reached at Maastricht when I negotiated our opt-out from the Social Chapter.

    I have told our European partners in clear and distinct terms that we must change the health and safety provisions so that they reflect the more limited scope that was originally intended and that we originally agreed to and I take this very seriously. We cannot be expected to have confidence in European agreements if they are subsequently undermined by shifts in interpretation. I do not want to be misunderstood about this. If old agreements are to be broken, I do not see how we can reach new agreements.

    Mr. President, I want Europe to succeed. I have no doubt that our best interests are as part of the sort of Europe that I have tried to sketch out this morning but I don’t believe that Europe will succeed unless it faces the tough decisions necessary to win in tomorrow’s world and if it doesn’t, it isn’t only our continental partners that will lose, we will lose as well and that is why we need to be in the middle of the argument in Europe, not at the sidelines in the middle of the argument, arguing for the sort of Europe we believe in and care about and the business environment that will bring prosperity to our countries right across Europe.

    Every time I go to south east Asia or the United States or Japan, I see the growth of competition that is coming from those parts of the world, I see how much of the world’s market they are eating up day after day after day after day and I ask myself: if Europe doesn’t lift its eyes and begin to see what is happening elsewhere in the world rather than in Europe, what will be our competitive position and our place in the world in 10 years or 20 years from now?

    Those are the points at issue, that is why we are having the disputes that so often hit the daily headlines with our European partners. It isn’t a matter of this trivial subject, that trivial subject, this occasional dispute or that occasional dispute; it is a question of the direction in which Europe goes and whether it will go in a direction that can make it successful and competitive or whether it will shrink in on itself and find that slowly but inexorably it has less influence, less competition, less wealth, less prosperity and matters less in the world and fighting that battle is very much in our British national interest.

    Mr. President, I don’t believe you make business more competitive by hitting them with extra costs like the Social Chapter, I don’t believe you create more jobs by imposing a minimum wage – and Heaven alone knows, with nearly 20 million people unemployed in Europe we need those jobs – I don’t believe you support the force of market by resisting privatisation, private ownership, which is what most people in most parts of the world have now accepted.

    Why should we find it rejected in parts of some of the very centres of capitalism itself in western Europe? And you don’t reward hard work and initiative by a policy of high spending and high taxes not fair on the individual and crippling to the competitiveness of companies.

    These are policies of importance, they are policies that if we don’t fight for in Europe I cannot see who will and if Europe doesn’t fight for them or a British government doesn’t fight for them, then the long-term impact of what happens in Europe and the washback upon what happens in this country scarcely bears contemplating. That is why I say we must be in the centre of the argument, that is why I don’t want the argument conducted in stereotypes on one extreme of the argument or the other extreme of the argument. We will never find everything in Europe to our taste, in truth we never believed we would but we need to make sure the balance of advantage is there for Europe and for us and for our future and these are central issues that are coming up for discussion in the inter-governmental conference and in decisions that will be taken beyond it.

    We have seen for the first time in many years that we are more competitive than our European partners because we have followed the policies I have been talking about. We had a good argument to put over. We need to lift the atmosphere of confidence right across this country so that we can conduct our arguments with our European partners with confidence so that they don’t say: “Well, you are only saying that because there are disputes about European policy at home!”. We are saying it because we believe in it, believe in it for us and believe in it for them.

    Mr. President, life in Britain is better than it has been for generations, our membership of Europe has on balance helped make it better. It can be better yet and we need, all of us – government, business big and small and individuals in every part of the country – to approach the decisions ahead determined to protect what has been achieved and then to build on it for the future. That is my responsibility and I intend to discharge it. The arguments will be difficult but I believe they can be won and I believe they will be won. [Applause].