Below is the text of Mr Major's speech made to the Cambridge Chief Executives Forum on Friday 13th November 1992.
I'd just like to talk about some things that I think are relevant to our situation at the moment, what has happened, what is happening, and what is going to happen in the future. It's a private occasion, so I will [indistinct] one or two matters in public, and I know that you will respect that. Let me just talk about some of the background. I think it is important to see what the background is to where we are. Two things that happened over the past two or three years. Undoubtedly good news everybody said. In one respect they were. But they had a very material effect in an economic area entirely unsuspected. The first of those two great events was the collapse of the Soviet Empire. We wanted it for a long time. The second of those two great events was the collapse of the Berlin Wall, something all of us found offensive, and were pleased to see the back of.
There was a great surge of optimism, and understandably so, for who could possibly have defended either the Soviet Empire or the maintenance of the Berlin Wall. But what has been the practical effect of those two? Take the collapse of the old Soviet Union first. The obvious illustration is simply this. Would Yugoslavia be in flames today if there still had been the Soviet Union? And the answer is no. And so one sees that with every great and worthwhile event -
And then there is the collapse of the Berlin Wall. We all cheered, we all watched the television pictures, we all knew it was a historical inevitability which had to happen. But the impact of it happening has been very profound, for Europe and for business. Of course, there were two colossal political and economic discussions that I believe were made by the German Government after the collapse of the Berlin Wall. The first was the one to one swap Deutschmark for Ostmark in terms of introducing a new financial system into the new East German Lander. And the second was the belief in Germany that that great all-
The United States in near recession for three years. The Japanese economy in a very sickly state by its own powerful motives in the past. Huge fiscal stimulus in Japan -
Now where are we in the United Kingdom? Let me just set out an objective that we have. An objective that I have always had. The objective I set on the first day I became Chancellor, way back in the dark ages. You may think it's only three years! If you'd had my job [laughter] What was it, though, that objective? A fairly straightforward objective, I would have thought, sustainable, non-
Where did I start on the day I became Chancellor of the Exchequer? With 15% interest rates, 11% inflation and rising. That was where I started at that stage. It was the constant concern of business and commerce that we were heading for hyper-
Firstly, because I now think there is a lot of disinflation out there in the system. It is possible to move more rapidly to a more relaxed monetary policy and to recreate the conditions for investment. But secondly, for this reason. When I looked beyond the United Kingdom economy and the Germany, French, Italian economies, I looked at the economies in the United States and Japan. When I looked at what was happening in the Soviet Union, and its impact on Eastern Europe, 1,500% inflation in Russia, 2,500% inflation in Ukraine, one begins to see a set of economic circumstances coming together that potentially, in the absence of two things I will come to, could have toppled Western Europe through that narrow dividing line between recession and slump, and for that reason I think it was right, though the balance of this lay in that direction, to begin to look for recovery for growth and for stimulating the economy in a different way for the problems we face.
There are two things the world needs -
Without that GATT Agreement there is a risk of a retaliatory trade war between the United States and Western Europe. And there is only one way in which that can go. That will mean a move from recession to slump in Europe and in America, and it is folly that almost defies belief that that could be brought about for the sake of a handful of oil seeds and a barrel of grain, and it must not be allowed to happen. For that reason I enjoyed the [indistinct] with President Delors [indistinct] [laughter]. I am very pleased indeed that the European Community have now decided that they will re-
Once Europe and the United States have settled, the scene then moves on to Geneva. We have other problems there. Relatively small problems, bananas from the ACP countries, is it? A tricky little problem. It's actually a tricky problem for those countries and for us, and a very serious one. But they are problems that will not hold up the GATT Round. And there's not one single thing in the world that will do more to stimulate world trade and growth and confidence and prosperity and earnings and profits than a GATT Round. And for those countries who seek to hold it up, for one domestic reason or another, whilst with their other hand they pour out aid to the Third World, I am bound to say to them, the whole of official aid from the whole of Western Europe to the Third World is but a drop in the ocean compared with the importance to the Third World of opening up the industrial markets of the West to their products. And it is a moral matter, as well as a political and economic matter, that we get that GATT Agreement and the opening of those markets.
So those are some of the things that are important. Let me turn to the measures the Chancellor announced yesterday. What actually lay behind them. I think there is a certain amount any Government can do to stimulate the right economic [indistinct] I don't kid myself for a second that the Government can do it all, for we can't. The people who produce this country's growth and prosperity and jobs are the people like you who run businesses, predominantly medium-
We have passed through, are passing through the first ever south-
I have very few prejudices, though those few I have are increasing in number. But one prejudice I assuredly do have. I am sick and tired of the British habit of writing down our country, its prospects, what it is, what it stands for, what it can do. You don't see that in other countries. They instinctively beat their chest in favour of their country, whereas the dear old British laconically lay back and say well, yes, we don't do that very well. You can't expect us to deliver on time. It's not the way we treat it. And all this nonsense. But the reality is it is nonsense. And it's damaging nonsense. And it is actually time that we started standing up and saying this is a brutal and competitive world, and we have got to stand up for ourselves. By we I mean the politicians, business, opinion formers, the media, actually stand up for Britain and say we can do things better than other countries, and you just watch what we're going to do. Because that is the way in this increasingly competitive world that we're really going to make our mark. The measures that Norman Lamont introduced yesterday were very sharp, three-
The change in the first few allowances in manufacturing industry. I must admit to you a heresy that I hold and have long held, held in the Treasury when I was overruled -
So those are some of the measures that Chancellor mentioned. There are two others to which I would turn very briefly, for I think the impact of them has not yet. When I first went to the Treasury I was confronted by something called the Brierley rules. The Brierley rules were a set of rules developed by a great and good mandarin, Sir William Brierley, to set as many road blocks as it possibly could to any relationship between the public sector and the private sector on infrastructure subjects. And it was a very important piece of Treasury theology that there was that dividing line, and if you go across it these rules made jolly sure that [indistinct]. And I had the privilege of meeting Sir William Brierley just after he retired. And I asked him about these rules, and I said, “what d'you think of them?”, “absolute rubbish, he said”! What we have now done is go a long way further. It is actually to set out a series of circumstances in which the public sector and the private sector can combine to produce the right sort of infrastructure.
I do mean things like the Channel Link, the Birmingham road, new developments like the [indistinct] Dartmouth crossing, like underground railway, large-
So there is a great change. It will take a while to come about, the East-
These are not short term measures. These are not measures to get us over Christmas, or over the next week or over the latest scandal that undoubtedly will erupt somewhere around the world. These are matters addressed to the medium and the far distance. With one single shining objective in the middle of them. To make sure that we have the right structure for British business, British industry, and British commerce, to maximise its opportunities, its profits, its prosperity, its growth, and its employment creating new jobs. Many years ago the old CBI had a slogan. I thought it was the best slogan the CBI ever had, and I myself am sorry that they didn't stick with it from the 1970s when they thought of it till today, Britain Needs Business was their slogan. Gloriously ambiguous. But it is true. Britain is a [indistinct]. We are a trading nation. We always have been. We never had our eyes fixed down at our bootstraps. Our eyes, our prosperity, have been fixed on markets overseas, on innovations, on developments, on research and development, on new ideas. More Nobel Prize winners for science and industrial matters in this country per head of population than any nation in the world including the Japanese who always get the credit. Because Britain does need business. Our prosperity does, our future does. Unless we are able to recreate that entrepreneurial spirit we had in the '80s, and it slipped away from us, at the end of the '80s in the excessive boom that was created and inevitably followed by the recession as people who had over-
So it is a great change. People will accuse us of a U-