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1993 - Mr Major’s Press Conference in Tokyo

Below is the text of Mr Major’s press conference, held in Tokyo on Friday 9th July 1993.


PRIME MINISTER:

I think this week we have had a productive meeting in Tokyo. To be frank, the results are better than I anticipated when I came and better I think than most people expected. Let me just touch very briefly on the main issues without repeating the communiques and then open up the floor to the questions that you may have.

I think on the market access package it is clearly a significant step, it does mean that we are now open to return the talks back to Geneva on a multilateral basis, there is still a great deal to be done, I do not hide that from anyone, but I think it does reopen a realistic possibility of a satisfactory outcome towards the end of this year. I think people often tend to forget how much wider these particular trade talks are than any we have seen before. That does correspondingly mean the prize of them being successful is that much greater, though the price potentially to be paid, were we to fail to reach an agreement, is also one I hope that will provide a substantial impetus for everyone to make whatever sacrifices may be necessary to ensure we get a satisfactory outcome.

I think this summit has acted as a catalyst, it was always likely that it would and I am delighted that that is how it turned out.

If I could just say a word about the economic discussions we had and the economic communique. The underlying message I think is quite clear, we need to break down the barriers to growth and the barriers to jobs, that was a theme in the discussions the European Community had at Copenhagen, it has been echoed very satisfactorily here in Tokyo this week.

With the exception of Japan, all of the countries represented here have very substantial budget deficits, bigger than is desirable I think in every case. We spent some time discussing that, I think there is a recognition that those deficits need to be reduced and that all of us need to keep social costs within the bounds of what we can afford. This is not just a particular problem in the United Kingdom, it is a problem that it was evident in the discussions is felt right across the G7. It will mean difficult decisions I suspect in each of those countries but they are decisions that are going to be necessary. Provided people understand what lies behind them and what the impact of them will be, I think people would prefer those home truths rather than empty promises.

On the summit itself, we have had some useful innovations this year and I would like to congratulate Prime Minister Miyazawa upon them. It has had rather less pomp than we have sometimes been accustomed to on these occasions and I certainly welcome the fact that that is the case. We will have even less pomp, I trust, in future.

I made further proposals for reshaping the summit process, they have been accepted, most of them, and we are proposing to make it a good deal more informal in future, there will be much less time preparing documents, much more time in really frank and informal discussion between the Heads of Government. I think that is welcome, it may be there are yet more reforms to be made and perhaps we will see how next year's meeting in Naples goes before returning afresh to that particular matter.

On the political declaration, we spent some time on Bosnia and non-proliferation and I think there is a very satisfactory statement there. We agreed that Iran, Iraq and Libya all pose serious problems for the international community. I was delighted at the backing for constitutional talks in South Africa and returned to a theme I have mentioned before, the desirability of lifting sanctions on South Africa soon to give them access to the international financial institutions. They still have a birth rate growth of around 3 percent, no economic growth at all, and the impact of that combination of factors is very damaging indeed for many millions of the poorest of people in South Africa.

On Russia we have a substantial meeting this afternoon with President Yeltsin. I met him over breakfast, he certainly was very relaxed and in very good form. He feels he is making good progress in reshaping the political system, he understands there is still a substantial way to go to complete the new draft constitution and convene new parliamentary elections. But there is no doubt he is a good deal more confident about matters after his remarkable referendum victory some while ago.

We talked about arrangements for stepping up Russia's political dialogue both with the European Community and with the seven summit countries. At Copenhagen a week or so ago I sought and obtained the agreement of our European Community partners for twice yearly bilateral summits with President Yeltsin, I think he was very pleased with that, certainly he proposes to take up that particular offer. And I suggested this morning that we should this afternoon invite President Yeltsin to join us in Naples next year at the end of the formal G7 for a further G7 plus 1 discussion on the same basis as this year and that offer will be made to President Yeltsin this afternoon and I have no doubt he will accept it.

We spent some time on free trade, some time on other matters that perhaps I will raise only in questions if you invite me to do so. We have agreed a substantial new programme to help privatisation in Russia, it amounts to 3 billion, it is a privatisation and restructuring programme and I think that will be very well received this afternoon.

One matter I raised that is not in the communique, I raised it at a late stage but it is not necessarily a matter for the communique, is a letter that all of the participants at the summit have had from Mr Shevardnadze. The position in Georgia is desperate, not just the war but very dire humanitarian problems as well. I think we do need to encourage both Russia and Georgia. with United Nations support, to have yet another look at finding a solution to the problems of Adhardzia [phon], it is important they do so, it would open up the way for the despatch of United Nations observers. Firstly there is the question of trying to mitigate the fighting, but there is also the question of a severe danger of starvation and a dramatic lack of medical and other equipment in Georgia. I raised that this morning, I now think it is probable that the European Community and others will be despatching some assistance to Georgia fairly speedily, I have no doubt myself that that is badly needed.

Just finally, if I may, a word about the bilateral relationship with Japan. The Japanese government have invited me to return in September for a bilateral visit. We are keen to enhance our political relationship with Japan, it is in very good shape now, it has been improving dramatically over recent years, we have thriving trade, I think that is going to be boosted by the removal of the tariff on Scotch whisky, there are internal tariffs as well, perhaps they also may decline over time. British and Japanese companies have been working together in projects in a number of companies. When I come back to Tokyo in September I propose to bring with me a mission of very senior businessmen and leaders of high technology companies, that will be led by Michael Perry of Unilever but there will be a number of other very high profile British businessmen with me as well.


QUESTIONS AND ANSWERS

QUESTION (George Jones, Daily Telegraph):

Prime Minister, the summit declaration includes a commitment to reform the United Nations, are you now prepared to see Japan and possibly Germany as permanent members of the Security Council?

PRIME MINISTER:

I welcome the debate on the Security Council reform and we fed in our comments to the Secretary General of the UN. I am happy to make the position entirely clear. We are certainly not against change either in the UN or in the Security Council. What the debate is about is about enlarging the membership of the Security Council, including its permanent membership. The permanent membership of any member, including the United Kingdom, is not of course in question. The main concern that we have is to maintain the effectiveness of the working of the Council. It has over the past 2 or 3 years been working with, I think most people would say, an unprecedented degree of consensus, nobody wants to damage that, to enable the Council to respond satisfactorily to a whole range of regional crises -- Kuwait, self-evidently, Cambodia, Somalia, Bosnia - and nobody wishes to damage that degree of consensus. That said, it is going to be a difficult debate. There are many aspirants who would like a permanent seat, agreement will be difficult to reach and particularly difficult if we are to reach it without damaging the work that the Council does.

I think that debate should take place, I welcome that. There are a number of countries who by virtue of their global interests, you have mentioned Germany, you have mentioned Japan, by virtue of their global interests, their contributions to international security, that will be interested in seeking a permanent seat. That carries with it obligations, peace keeping of course is one obligation that it will tend to carry with it. I am very pleased to see the steps being taken in Germany to amend the constitution, that would allow full German participation. I welcome the statement by the Japanese that they are prepared to do all they can to discharge their obligations to the Security Council. Now if agreement can be reached on these points, I suspect those countries could be among the beneficiaries of reform but it would have to be on the basis of their playing a full part in Security Council activities, including peace keeping.

So the simple straightforward answer is I am certainly not opposed to reform, I think it has to be the right reform and it has to be on the right basis. That debate has started, I think it will go on for some time, but I welcome it.

QUESTION (Peter Jay, BBC):

If there had been no Economic Summit, what difference would that have made to the ordinary man and woman in the street, apart from saving the Japanese taxpayer a lot of money?

PRIME MINISTER:

I am not here to speak for the Japanese taxpayer, I have enough trouble with my own taxpayers, I will leave others to speak for that. I think the catalytic effect of this meeting on the trade talks was clearly very important. I think also the degree to which it clarified international problems, the deficit is one I would stress most obviously, was also very useful. But also it clarified the contribution collectively that the participants can make to restoring some measure of growth across the world economy.

If I could pick out the points of emphasis: agreement in Japan to the need for fiscal stimulus to improve Japanese demand, I think that will be very helpful; the reiteration by the United States of dealing with their fiscal deficit is a substantial contribution that they can make; and in Europe of course the renewed commitment by the Europeans collectively that there is a need for a decline in the present level of interest rates. I think the combination of those factors, brought together so that everyone can see the extent to which they interlink in restoring confidence and growth of the world economy, is very useful.

So the word I would offer, if you wanted a single word, would be jobs, because 7 think it is the combination of those factors that restores confidence, will I trust restore growth, and with it, although there is not an umbilical relationship between growth and jobs, we are not going to get: jobs without growth. Providing we get growth we will have continued investment and I hope we will be able to take some of the 23 million G7 unemployed citizens off that list of being unemployed and back into work.

QUESTION (Financial Times):

Prime Minister, can you please tell us what you discussed with Mr. Yeltsin as far as trade access is concerned and also can you tell us how much of the privatisation package is actually new money and also how much of it is going to be equity rather than loans?

PRIME MINISTER:

I think we will set out the details of the privatisation package after we have given it to President Yeltsin and discussed it with him this afternoon. It is a mixture of redirecting existing resources and new money - it is a mixture of the two.

On the trade aspect, we did spend some time talking about trade this morning. The objective, not obtainable in the short-term, must be free trade between Russia and the rest of the world. We would like to see Russia join the GATT - I think that also is an objective we have. The Chancellor of the Exchequer joined me for the breakfast with President Yeltsin and as we made clear this morning, the restructuring of the Russian economy has some way to go before we can make free trade a reality.

Free trade imposes obligations on Russia as well as advantages for Russia. They would certainly need to remove some of the quite extraordinary subsidies they have in many parts of their industry. President Yeltsin accepted that; that is the direction in which he wishes to go. As he begins to make moves on subsidies, I hope the western countries generally will begin to increasingly open their markets and move towards a completely free trade option. What clearly is patently silly over time is for the West to continue to provide financial resources to Russia whilst at the same time closing their markets to Russian exports which would enable them to diminish their need for those same financial. resources.

I found it a very productive discussion. President Yeltsin invited me to go back to Russia - we are looking at dates - and one of the issues we will certainly discuss then is trade.

QUESTION (Japanese Newspaper):

Could you tell me why you are so eager to reform the summit? Secondly, when you met Mr. Myazawa, when you promised to come to Japan again, did you say that he was going to see you again?

PRIME MINISTER:

I look forward to seeing him again. I have seen him many times in the past, I look forward to seeing him many times in the future.

Why reform the summit? At its simplest, because it is far too bureaucratic. It is too bureaucratic, it is too pre-cooked.

There are several advantages in a summit like this - some of them are tangible, some of them are less tangible. The tangible results are some of the things I was talking about a few minutes ago and I won't reiterate that. The intangible advantage of a summit is the extent to which the leaders of the industrialised nations get to know one another much better. When there is a problem, when there is a crisis, it is much easier to be able to pick up the phone and talk to someone you know, you have met, you trust, whose mind processes you understand. Also I think the informality of discussions - we had a very informal discussion over dinner on the first evening, very informal, very wide-ranging and I think everyone learned a great about all the other participants as a result of that discussion.

Often when one comes together in these meetings the sort of thing one ought to discuss is not the issue that needs a decision tomorrow but the direction of policy perhaps over very many years. That is not a matter for headlines the next day or the day after. There is an immediacy about the news for these days; nobody these days runs large stories about how G7 leaders might have contemplated what the world would look like in twenty years' time, there is not a lot of space in the press for that, they are more concerned about what actually happened today. Informality and informal discussions will enable those wider discussions to take place as well.

QUESTION:

Prime Minister, you were talking about home truths earlier on.

There is a Gallup poll in today's "Telegraph" which shows Labour on 43, Liberals on 26 and the Conservatives on 24, your own rating is down to 19% which is the lowest ever in Gallup. Why do you think the dissatisfaction at home with the Government is focused on you so personally and at the end of a week when you have achieved some widely-acknowledged good results here? Aren't you going to feel like packing it in if your rating goes down any more?

PRIME MINISTER:

Politics is personalised - I think that is the nature of life not just in the United Kingdom but all over the world - much more personalised than ever it has been. I think that is part of the baggage people have to get used to. I don't think one needs to let it necessarily worry oneself.

I seem to recall during the last election answering an awful lot of questions about opinion polls. I also seem to recall what the election result was like and none of the opinion polls remotely got near to the result as it actually turned out to be when people had to make their decision.

I understand people' s concerns at the moment. It has been a rough old twelve months economically but if I had to said to you the evening after the election last year that fifteen months further on we would have inflation at 1.25%, interest rates at 6%, exports booming, a substantial shift in European policy towards our direction and we would have had four successive months in which unemployment fell without unemployment reaching 3 million let alone the 3.5 million most experts were predicting, I think you would have probably raised an eyebrow and suggested I think again but when you strip away lots of the short-term sensational matters that have dominated people's interest in the United Kingdom over much of the last year, that is the reality of what has happened.

The other reality of what has happened is that a complete parliamentary programme has gone through the House of Commons and very soon will be entirely through the House of Lords. If that same opinion poll had said what had Parliament been concentrating on this year I bet a huge proportion of people would have said: "Oh! They have done nothing except Maastricht and the European debate!" but in fact there have been a very large number of substantial reforming pieces of legislation through the House of Commons so I am not overly concerned about opinion polls.

SAME MAN:

Do you ever feel like packing it up?

PRIME MINISTER:

Do I look like it?

QUESTION (PASS News Agency, Russsia):

Prime Minister, were the respective leaders unanimous in their wish to meet Mr. Yeltsin in Naples and what is your personal opinion about the transfer from G7 to G8?

PRIME MINISTER:

The answer to the first question is yes, we were all completely unanimous. There was no shred of dissent about the desirability of Mr. Yeltsin coming to Naples next year or about inviting him now.

I think the formula of G7+1 is an appropriate formula for the time being. The G7 are the largest industrialised nations in the world. At the moment, Russia does not fall into that category so I think it is appropriate G7+1 but Russia is a vitally important nation politically and in every other way and the G7 leaders think it is both appropriate and in our interests as well as in Russia's interests to have this regular and annual dialogue.

QUESTION (Anthony Rowley, Business Times and Oxford Analytica):

Prime Minister, how seriously should we take this statement in paragraph 7 of the Economic Declaration that the G7 have agreed that no recourse should be made to initiatives and arrangements that threaten to undermine the multilateral open trading system? Presumably the search, for instance, for a framework agreement between the United States and Japan will continue to go forward.

Secondly, I wonder what you make of Japan's unwillingness at this stage to see an indefinite extension of the Non-Proliferation Treaty?

PRIME MINISTER:

I think you should take it seriously, I think the desirability to move towards an open trading relationship is very widespread and I think the importance of that can scarcely be overstated. It often surprises me when I talk to people around the world, the extent to which they do not realise the shackles that still remain on free trade. One of the great advantages of the market access package that the quad produced the other day was the scale of the reduction in many of the tariffs but in many cases it still isn't abolition of the tariffs. We have a General Agreement on Tariffs and Trade. I think "General Agreement" is a rather informal position - I think it was intended to be temporary at the time and has never properly been formalised. I hope that we will be able to move to a more formal multilateral trade organisation as part of these particular talks. I think that would be a great advantage if we are able to do that. There still seem to be differing views on that but I certainly hope we can achieve that.

Regarding your second question, I think that is a question for Mr. Miyazawa, not me.

QUESTION (Chris Butler, Daily Express):

If modesty will permit, would you describe what you think was Britain's main contribution both to the summit and to the communique?

PRIME MINISTER:

How long have you got?

QUESTION (Chris Butler, Daily Express):

Briefly.

PRIME MINISTER:

You are asking for two things that are mutually incompatible, firstly to set out what we have done and secondly to tell you briefly - the two things are incompatible.

If you look at the contributions - and you actually saw the speech never mind the communiques at Copenhagen last week and here - you will notice a very substantial similarity in the broad economic argument that I advanced at Copenhagen that is also here. I don't claim to be the only person who holds that view but I certainly advanced it forcibly in Copenhagen and forcibly again here, the question of open markets and a whole range of supply-side reforms.

No-one is seriously arguing these days - with the possible exception of the British Labour Party - that large fiscal expenditure is the way to lift countries out of recession and to put lots of people back to work. On the back of the fiscal deficits that people have, nobody is really advancing that argument.

The opening up of markets, of supply side reforms, they are something we have argued for for some time now accepted in the Copenhagen communique, accepted here. That is a very substantial point.

On some of the smaller points since you simply asked for an illustration, I suppose the summit reform is one illustration; the decision to invite President Yeltsin now is another initiative that came from the British; the decision to provide more help to Georgia, although it came last in the communique, is another British initiative. There are others as well. I will give you a full list later if you like.

QUESTION (Paul Reynolds, BBC):

If the situation in Bosnia deteriorates, will you cut and run or will you intervene more strongly?

PRIME MINISTER:

I don't think one can make decisions of what one would do in Bosnia until you see what actually has happened on the ground. We have made it perfectly clear that we want to stay there and assist with humanitarian aid. We were the first in, we were there in large numbers. We have been in some of the most difficult positions. I think the British command and the British troops have done a superb job there right the way through some very difficult times, we have sponsored most of the UN resolutions.

We still want to see a political settlement and the maintenance of humanitarian aid but beyond humanitarian aid it seems to me overwhelmingly likely that if there is a political settlement it will need some form of international support and international guarantees. If Lord Owen and others are able to reach a political settlement, the Muslim state will be in the centre. It will need access to the sea; that is going to need a corridor. It defies logic that that corridor isn't going to need some form of international guarantee, very possibly United Nations troops but quite apart from that, the mess we are likely to find there at the end of the fighting is certainly also going to need an international presence to help with it. I think that, too, will be the United Nations and most of the big nations would expect to fulfil their obligations and play a part in that.

QUESTION (Reuters News Agency):

Prime Minister, would you please tell us how you see the present political upheaval in Japan. As you may know very well, Mr. Miyazawa called a snap election for July 18 and some people expect Japan will have a two-party system some time after the election.

How do you see the situation? Japan is changing or not?

PRIME MINISTER:

I certainly think Japan is changing but if there is one thing I have learned in politics over the last 20 years, it is that it is extremely unwise to go to another country and comment on its political system at the beginning of a general election.

I will simply say that having contested a number of general elections myself, they should be held at regular and not too frequent intervals and I wish all the participants in the Japanese general election as much enjoyment as I had in mine.

QUESTION (Wiliam Keegan, The Observer):

You mentioned the welcome fall in unemployment in the UK. How much of this do you attribute to supply-side policies and how much to devaluation, lower interest rates and the public sector deficit?

PRIME MINISTER:

I think the supply-side changes made throughout the 1980s have made the United Kingdom economy a much more flexible economy than it was in the past. Many people suspected that the unemployment tail after the end of the recession would go on just as it did after the 1981 recession, perhaps for three or four years. It was on that basis that so many people forecast unemployment going up to 3.5 million. Well, it is now clear it isn't going to go up to 3.5 million. The adjusted figures - proper figures, if I can put it that way - didn't actually quite reach 3 million and have now fallen for four months in a row.

I think all the factors you mentioned are factors. The speed at which it turned round I think owes a good deal to the supply-side reforms of the 1980s. The best illustration of that I suppose one can give is if you look at the United States - perhaps the most flexible economy; whenever its economy shows an upturn their unemployment does tend to decline more rapidly than in other far more structured economies in western Europe so I think those supply-side changes played a significant role. That said, I have absolutely no doubt that the devaluation and the reduction of interest rates have accelerated that trend. I think that must self-evidently be so.