Below is the text of Mr Major’s speech made to the Aberdeen Chamber of Commerce Dinner on Monday 9th September 1991.
Thank you, Mr. President, for your kind introductory remarks.
It is a great pleasure to be with you this evening. I very much welcome this opportunity to meet representatives of the business community here in North East Scotland.
This Chamber is well-
A Chamber of Commerce that makes the most of these opportunities is truly serving the interests of its members and the wider local community.
But industry in Grampian -
Headline inflation has been virtually halved since last October. It is now down to 5.5 per cent, the lowest figure for 3 years. Moreover, the underlying rate of inflation has also fallen dramatically -
Over the last year, inflation has risen in most other EC countries. In the UK it has fallen significantly. And by the end of this year I expect our inflation rate to be below the EC average. Indeed, our inflation rate may well be lower than that of Germany.
As inflationary pressures have eased, so interest rates have come down. Not just once or twice. But 8 times since last October. Only last week, the conditions were right for a further 1/2 per cent cut. That took our base rates to 10 1/2 per cent -
If the Government had predicted last autumn that inflation would be halved; that sterling would remain strong against the deutschmark; and that domestic interest rates would fall from 15 per cent to 10 1/2 per cent, we might have been accused of excessive optimism. Indeed, our opponents might well have put their scepticism in stronger language. For that remarkable combination of a steady exchange rate, falling interest rates and falling inflation is just what we have achieved.
Yet the battle against inflation is being won at a time of great economic difficulty for many. The United Kingdom economy has been passing through recession. It has been painful for many individuals and many businesses. That recession is of course by no means confined to the UK -
We cannot be absolutely sure whether the recovery has started because we only get the figures some time after the event. However, there are some encouraging, if still highly provisional indications, that recovery is now underway. A number of recent press articles have drawn attention to the pick-
The Scottish economy is of course closely integrated with that of the United Kingdom as a whole. And it would be surprising if wider trends at United Kingdom level were not observed here in Scotland. Yet the pattern is by no means the same. All the evidence suggests that the current economic downturn will be shorter and shallower in Scotland than in the United Kingdom as a whole.
Over recent years, the Scottish economy has achieved remarkable success. Between 1986 and 1989, Scotland had a faster rate of economic growth than Germany, France, Italy, the Netherlands and Denmark. Final figures for 1990 are not yet available. But independent forecasters take the view that Scotland out-
There are many reasons underlying Scotland's economic success. The calibre of its people. A unique highly-
First, inward investment. Two years ago, the value of new projects attracted to Scotland reached an all-
Second, the resurgence of offshore oil and gas activity, centred here in the North East.
The rapid growth in North Sea activity last year set new records. Exploration and appraisal activity on the UK Continental Shelf reached its highest ever level. Spending committed to new projects was also at a new record. And so was the value of new orders placed for goods and services. Despite increasingly intense competition -
The pace of recent developments and the continued high discovery rate means that a new peak in combined oil and gas output is now expected by the middle of this decade, with welcome implications for Grampian, Scotland, and the wider UK economy.
Last year, gas production hit a new record [of some 50 billion cubic metres]. Output is now expected to continue to grow strongly for the rest of the decade. With completion of the new gas pipeline tying the Beryl and Brae fields to St. Fergus, and the development of the large gas condensate Bruce field, gas supplies landed through St. Fergus will increase substantially within the next couple of years. The development of central and northern North Sea gas condensate fields like Bruce and East Brae signals a wholly new phase in the development of the UK's gas resources.
Oil exploration so far this year remains at very high levels: I am told that the North Sea has now overtaken even the Gulf of Mexico as the highest area of offshore drilling activity anywhere in the world.
And oil production is expected to pick up again following completion of the outstanding safety work associated with the Cullen Report. The Piper field itself is now expected to be back on stream ahead of schedule by early next summer, with a new platform incorporating all the safety and engineering lessons learned from the Piper Alpha disaster. As other significant new oilfields like Saltire and Scott come on stream, total oil production should climb steadily over the next three to four years towards a second peak very close to the previous record set in the mid-
Until comparatively recently it was still widely assumed that Britain's self-
These developments provide a clear vindication for our approach to the oil and gas industries. A flexible and attractive tax regime. Non-
But there is of course more to Grampian than oil and gas. Long before oil was discovered in the North Sea, Grampian was justifiably noted for the quality and natural produce from its countryside. The Aberdeen Angus, the golden Glenlivet malts, the fish harvested from the dangerous waters of the North Sea. I have seen some of these products already today when I paid a most useful and enjoyable visit to the Knockando Distillery on Speyside. So interesting was it that my staff are encouraging me to sample (and I choose my words carefully) the distillery again -
Industries such as these provide crucial employment in rural parts of Grampian and elsewhere in the North of Scotland. We in Government recognise the importance to those areas of the continued success and prosperity of a range of industry.
Earlier today, I launched formally Grampian Enterprise Limited, the local enterprise company for the North East. I was struck by the feeling of purpose and commitment which I sensed. The calibre and enthusiasm of Ian Wood and his colleagues are impressive. The staff are clearly committed to Grampian too. I am delighted that through the Scottish Enterprise initiative, the Government have provided the opportunity -
The opportunity is indeed immense. It gives business people the chance to shape the provision of economic development and training programmes to suit local needs. But it is potentially much more significant. The initiative puts business in the key position to lead the skills revolution which our economy needs. It provides an opportunity to influence the thinking and the planning -
Governments cannot do that. But we can provide the resources -
Mr. President, there is much more that could be said about the economy of Scotland and of Grampian in particular. You may well be relieved to hear I do not plan to say it.
But there is one strand which sums up the message I would leave with you tonight. It is this; Grampian and Aberdeen have certainly had a great deal going for them -
I thank you, Mr. President, for your hospitality, and wish you and the members of the Chamber every success for the future.