I am delighted to be taking part in the formal opening of this splendid new plant.
The project has all the hallmarks of what is best in Britain. It has been completed on time and within budget. It is based on a marvellous new technology which has been developed by ICI's own research staff. It is a project which successfully exploits the special advantages in skills and materials which you have here in the North West. And at a time when the chemical industry—like many of our industries—is facing increasing competition abroad, over half of the plant's production is going into exports.
I congratulate all who were involved in the planning, construction and commissioning of the plant. [end p1]
Like all major industrial projects, this one is not without risk—and all the more so because I know the competition in chemicals is fierce. But without risk-taking, you can't have progress. And at ICI you minimise the risk and maximise the prospect of success by a constant striving after greater efficiency and new markets.
This project is part of ICI's strategy of expanding its share of the EEC market in solvents—which is four times the size of the UK market. Now that we have settled our dispute with the Community about the Budget, we must focus all our attention on making a success of the Community—and getting the most out of it in exports and jobs. Here in Runcorn you are setting an excellent example. [end p2]
Europe is our home market. It is our closest market. It is our biggest market. But it is arguably also the toughest market in the world. If we can hold our own in Europe—and we can—then we can hold our own anywhere in the world. [end p3]
More than 40 per cent of our exports now go to our Community partners. Ten years ago it was only 20 per cent. Our share of the chemicals import market has gone up steadily.
West Germany has now overtaken the United States as our biggest single market. And each one of our EEC partners is now in the top ten league table for British exports.
I know that there are now fears in many parts of industry that our exports are going to suffer because of high interest rates and the high level of sterling. And likewise industry's share of the home market.
People are right to be worried because there has been a big deterioration in industry's price competitiveness. [end p4]
But the level of sterling is a fact of life. The Government can't get it down by buying in foreign exchange and pumping money into the system because this would undermine our whole strategy for getting inflation under control.
Nor can we reduce interest rates without regard to what is happening to the money supply. If we tried to do so prematurely, the amount of money in the economy would start expanding too fast—as it did last year; and again, we would be turning our backs on the crucial task of getting inflation down.
But though the timing must remain uncertain, lower interest rates will come. We are holding back the Government's spending and borrowing. What we need now is confidence that monetary growth is really coming down. It will then be possible for interest rates to be reduced. [end p5]
Some of this may sound unpalatable. But if individual companies are losing orders for lack of competitiveness, they must look to their own costs. And this must mean greater efficiency and paying out wages and salaries that they can genuinely afford.
The alternative can only be fewer jobs now, and less investment and therefore fewer jobs in the future.
I believe that more and more people are understanding the connection between pay not matched by increasing output and higher unemployment. Lower pay settlements now will mean lower unemployment later. [end p6]
The plant which we are opening here today is a fine example of what can be achieved by making profits and investing them in the future, and by skill and cost-efficiency in bringing the investment to fruition. It is a great pleasure to declare the plant formally open.