Below is the text of Mr Major’s speech, made in London on Monday 20th July 1992.
I am afraid I have one piece of news for you that you will not have been expecting, we will be playing cricket against our European Community partners and I have some confidence about the outcome.
Let me say firstly how pleased I am to be here today to present those awards, I know how important they are, I know how hard they are to earn, I know what a remarkable tribute they are to those who actually receive them, and so it is a very special pleasure to be here today to have the opportunity of presenting them.
I know for some businesses at the moment it is a difficult time, there have been difficult months and for some those difficult months continue. But I think that, if anything, makes it even more important to beat the drum for free enterprise. Free enterprise is the only way in which this country is going to have the strength, the importance, the economic and political authority that I wish it to have, and that point might as well be understood at the low point of an economic cycle as well as the high point of an economic cycle. For at the moment we need that enterprise more than ever.
But I think the point is really wider than that. We will always need free enterprise, the risk-takers, the go-getters, the people with energy to beat down barriers, create profits, create wealth, create jobs, and I believe that no-one knows that or understands it better than Aims of Industry and I do congratulate you on celebrating your 50th anniversary of fighting for free enterprise.
I had a Mr Cube childhood, I grew up with that remarkable advertisement for free enterprise, it is I believe a natural part of our heritage and I think you can be very proud indeed at what Mr Cube stood for and what Mr Cube achieved.
And I think when one looks at free enterprise, considers what it stands for and what it means, no-one illustrates the merits of free enterprise better than the three award winners today whom I congratulate very warmly on their achievements and on their success.
We talk of free enterprise, it is worth pausing for a moment to ask what it means, what does it imply, what does enterprise need to be free from? Two things, I believe, essentially. First it needs, and you touched upon this in your remarks a few moments ago, it needs to be free of unnecessary government intervention. We are continuing to cut red tape and remove barriers to enterprise, but I share your view, there is still much more to be done and I will return to that in a few moments. But business does need to be free to take macro-economic business decisions about products, costs, markets, investment, and only the private entrepreneur can take those decisions in the interests of their own companies. But second, and in some ways perhaps rather more important, it needs to be free of unpredictable macro-economic cycles. We have broken free in recent years of our corporatist past, not just the corporatism of government picking winners or second guessing the businessmen, we have broken free of the idea that if only government would sit down over beer and sandwiches with the captains of industry and unions to agree a macro-economic strategy, all would be well.
Well it was not when we did that and it would not be if we tried it again. The old idea that with a bit of tweaking of the money supply here, a little fine tuning of interest rates there, a little bit of spending somewhere else, everything will come out all right and then if all else fails, a massive devaluation to bail us out of our mistakes and to solve our problems.
Well I must say to you bluntly, it never did and it never will and it is not the way to run an economy. I do not mean in saying that to imply that government and industry have nothing to discuss, of course they do, a great deal to discuss, but it is extremely important to have that informal dialogue and constructive partnership between government and industry on a wide range of issues. And the announcement of a re-shaped Department of Trade and Industry is specifically intended to make sure that the Department relates more closely to sectors of industry and provides us with an appropriate structure. It is not a precursor of an interventionist future for there is going to be no interventionist future.
We want to see British companies win in the market places of the world. Coming second means coming nowhere, if you are second in a contract you do not get the contract. Unless you come first you might as well not have bothered. And what we seek to do is to strengthen our importance as a great trading nation and I make no apology for the determination of the government to help in achieving that objective.
Today I have the pleasure of presenting some awards. But I would win a far greater prize for free enterprise if I could raise your eyes and other people’s eyes for a moment to the future and a wider opportunity.
Let me state as a fundamental fact that I believe we must have consistency of economic policy. Business has been asking for this for decades so let us be consistent. I make no secret of the fact that I believe the economic policy we are following is the right economic policy, we are in the Exchange Rate Mechanism and we are staying in the Exchange Rate Mechanism. And I believe that will bring a very considerable prize within our grasp, that is a stable macro-economy, low inflation, permanently low inflation with enterprise freed not just from petty regulations but from the fear that all your efforts might come to nothing if you lose a gamble on the inflationary cycle. I want inflation to cease to be a matter for discussion in company boardrooms. Stable prices should be given, they should be expected, they have been for many years in the economies of some of our major competitors. Business has a right to expect stable prices and government has a responsibility to seek to deliver those stable prices.
We are now getting inflation down and we mean to keep inflation down, it is fundamental to the health of the economy, it is fundamental to the health of free enterprise, it is not easy, it is painful, it does take a while but it is absolutely essential that we win that particular battle.
It is of course in the nature of free enterprise to take risks, but the risks should not be the risks of the roulette wheel, the risks that you take should be those of challenging your competition in a fair race and in that we have a considerable competitive edge. We have always had the best scientists, the best innovators and I believe the best businessmen.
In the 1980s we dramatically improved our performance in quality, in design, in marketing and in cross-competitiveness. And so in any fair race that might put us, British commerce and industry, among the favourites to win. And in this country we will have the added advantage that the social chapter, with its unwise costs and its unnecessary interferences, will not apply to us as it does to our principal competitors in the European Community. And let me tell you why it does not apply to us, it does not apply to us because I had no intention of removing government from your backs at home to have it reimposed by the European Community in Brussels, whether it be the social chapter or some other unnecessary imposition of that sort.
But a low inflation economy is going to bring responsibilities for business as well as opportunities, it means greater responsibility for businessmen. Government are not going to bale out inefficiency or poor control of costs and wages by devaluation. There will be no return to the competitive devaluations of the 1960s and the 1970s, I believe they did terrible damage to British industry in the process and I am not going to return to that sort of policy again.
And that means in future we will have to adjust our costs to the exchange rate rather than the other way around. And by us I include not just the private sector but the public sector. It is essential that we keep public spending under tight control and we intend to do so.
Now some pessimists, and you see them, read them, hear them day after day, some pessimists, defeatists, have argued that we will never shake off the old ways, they argue that our history and our national character means that Britain will never be as responsible in controlling wage settlements and costs as our competitors abroad. well I believe that is blatant nonsense and if one looks at what is happening now I believe I can illustrate that. Pay settlements are running at about 4 percent, the lowest for many years; unit wage costs in manufacturing are falling and productivity is rising; our exports are at record levels despite the recession which also suggests that the Exchange Rate is not uncompetitive; and trade deficit in the European Community fell from 11 billion in 1990 to 2 billion in 1992.
The 1980s were a remarkable decade, they were a decade of dramatic supply side reform. Let me pick up the point that you made a few moments ago, Chairman. We have by no means finished those supply side reforms. The President of the Board of Trade will be stepping up the drive against regulation at home and as a key aim of our Presidency, again to pick up the point you made, we will be pushing for more deregulation in Brussels. We are not just looking at less regulation from Brussels in the future, we are also looking to see what existing regulation in Brussels can be removed and removed speedily in the weeks and the months ahead.
And let me just turn to one other vital supply side reform, and I refer to education. In the case of education, we have only just begun our reforms. John Patten will shortly be publishing further proposals for reform, they will be radical, they will be controversial, but they will be in the very best interests of our children. we will build on parental choice with more opting out, we will take determined action to rescue children whose prospects are blighted in the worst synch schools so often sited in so many of our great cities. A free enterprise culture needs recruits with skills, discipline and enthusiasm, they are the vital ingredients for success and we are determined to continue with our existing education reforms and to build on those existing education reforms to ensure that the education system produces the raw material upon which business can fasten and that will give business the skills that it needs to improve the private enterprise culture in the future. And that does mean an essential concentration on basics. To read, to write, to add up is the very basics of education in the early years of education. It does mean for those who are traditionalists that in terms of study Neighbours are out and Shakespeare is back in, and I must say, I believe that is the right decision.
Mr Chairman, just let me say a further word to the three winners today. It is not perhaps my responsibility today to detail the remarkable achievements that have led to this award, but I would say this to them. There was perhaps a time in the past when business and business leaders were anonymous, but I do not believe any longer that is the case. The best of our great businessmen in this country are role models, as well as being the leaders of their own businesses, people know far more about them than ever they did before with the glare of publicity that follows both big business and every other aspect of public life these days.
So their success will not just be a pleasure to themselves, not just important to their families and their shareholders and the country, it actually is a clear illustration to millions and millions of young people out there who see a free enterprise future of what can be achieved with the right talent, the right gifts, the right aptitude, the right consistency, the right innovation and the right luck, and I congratulate them most warmly on what they have achieved for themselves and on the importance of their achievement for those millions of other people around this country.
Mr Chairman, in conclusion let me just simply say this, and I return to a theme I touched upon a moment or so ago but it is one I feel passionately about. Today I am presenting awards to outstanding examples of what I would call supply side achievement. In the 1990s we aim to add the missing ingredient to the policies of the 1980s and that missing ingredient is an environment of permanently low inflation, that prize is now within our grasp, let no-one, Mr Chairman, be in any doubt whatsoever that the government are determined that we will take this opportunity and keep that low inflation for it is vital to our future success.