Speeches, Interviews & Other Statements

Complete list of 8,000+ Thatcher statements & texts of many of them

1975 Sep 25 Th
Margaret Thatcher

Speech to the Empire Club

Document type: Speeches, interviews, etc.
Venue: Toronto, Ontario
Source: Thatcher Archive: CCOPR 811/75
Editorial comments: Embargoed until 1700 UK time. The speech was delivered at lunchtime, following which MT gave a Press Conference for the local press.
Importance ranking: Major
Word count: 1582
Themes: Commonwealth (general), Economy (general discussions), Employment, Monetary policy, Public spending & borrowing, Foreign policy (Americas excluding USA), Foreign policy (International organizations), Leadership

HEIRS OF RUNNYMEDE

This is my first visit to Canada, and for me it fulfils a great ambition.

For years I have met your Ministers, Parliamentarians, and people, as they have travelled to Europe, and heard and read of the way of life you have fashioned here.

To us it has always sounded like a great and successful adventure, an adventure in courage, in new technology, in learning to weld together the great variety of views from the several provinces of your country into the one nation that is today Canada.

And now, at last, I have come to see these things for myself.

Part of the pleasure in coming here is that we share so much in common.

We are all heirs to those great freedoms which are at the heart of the western ideal.

Heirs of Runnymede—those liberties first expressed in Magna Carta, which have steadily been applied to all our people. [end p1]

Heirs to a great responsibility—the responsibility of seeing that the best of those things we have inherited, are renewed by our generation, transmitted to the next, and extended to other countries who choose our way rather than one which could lead only to political and economical servitude.

I know that you will want to hear from me about Britain, Great Britain.

It is true that at present we have problems, serious problems, and it would be foolish of me to ignore them. You do not solve problems by ignoring them, but only by facing them, analysing their causes, propounding solutions and above all by persuading public opinion to follow a proposed course of action.

Our problems are similar in kind, but perhaps different in degree, to those which other Western societies have experienced.

They are inflation, unemployment, absence of growth, and public expenditure beyond what the taxpayer can shoulder.

We have all suffered from inflation—indeed that phrase “double digit inflation” was invented to distinguish the modern level of inflation from the lower rates of the past two decades.

Our inflation rate is now 25 per cent per annum—a height most of us would have thought impossible had it been forecast only two or three years ago, and a height which would destroy our society if any Government allowed it to continue. As you know, steps have now been taken to tackle it and the rate will come down next year.

But we have lost 18 months, and that not only means that we are 18 months behind some other nations in overcoming the problem, but that during that period it has got worse.

The actions we take may have to be stronger and go on longer than in those countries which prescribed the remedies at an earlier stage in the disease. [end p2]

But the problem will be dealt with—indeed we have no choice but to deal with it and deal with it firmly—because more than any other nation in the world (with the exception of Japan) we depend on exports for our standard of living. We have to import half our food supplies and most of our raw materials, although we hope to be self-sufficient in fuel in the early 1980s.

For us to continue with a rate of inflation higher than that of our competitors would be to pursue a policy, which steadily reduced the standard of living of our people in a world where the standard of living of many others steadily rose. No Government, no political party, could or would do that.

And for all Governments, all political parties in a free democratic society, reality is a most potent factor in making economic policy. Politicians and economists continually warn of what will happen economically if firm steps are not taken, but somehow people seem to hope the inevitable will not come to pass.

So long as the problems are only round the corner, we seem to be able to ignore them. Them comes the day when they are actually on the doorstep. Until that point, politicians have a choice—they can do what is unpopular but advisable or what is popular or unwise.

After that point the unpopular becomes imperative but because the problem has become a crisis the action is acceptable to the majority of people.

It is often said that politics is the art of the possible.

The danger of such a phrase is that we may deem impossible things which would be possible, indeed desirable, if only we had more courage, more insight.

I have always felt that it is the task of politicians to be two or three years in advance of public opinion to be able to foresee dangers, to warn about them, and then to guard against them. [end p3]

This, it seems to me, is the essential task of a leader—not to follow public opinion from the back but to lead it from the front.

I believe we could and should have taken preventative action against inflation earlier. Now we must fight it and continue to fight it as a top priority. We are now in a world-wide recession. The United States, Canada, and Europe are all affected, and so are the developing nations.

And the recession has not been caused by deflationary policies. This time it seems the other way round. We have run into a recession through inflationary policies which have been caused by rates of expenditure far in excess of our capacity to produce the requisite goods. Either nationally or internationally, the money or credit has been found or created to accommodate this level of expenditure. And the result is that the nations have experienced a rate of inflation which could not continue.

Many firms have been in difficulty because they could not find enough working capital to finance stocks on the required scale, to pay the rising wage demands, to replace old capital equipment, let alone to expand. Some have gone out of business, some had to reduce the numbers employed. This time it is not deflationary policies which have led to unemployment, but inflationary policies.

Although our levels of unemployment are at present a good deal less than other countries, they are still rising and will, we fear, rise further. That is another reason for making the battle of inflation our top priority.

A few months ago I had occasion to re-read the speeches on economic and financial matters of leading politicians of the last thirty years. Many of them contained warnings to the effect that “We cannot go on living beyond our means” — “We cannot spend more than 100 per cent of what we produce” — “You cannot get a quart out of a pint pot” and so on. These phrases will be familiar to you. And indeed they are true. [end p4]

But for many years they have been obscured because we have gone through a period of growth. During that time, it has been comparatively easy for Governments to deal with problems by handing out more money through increased public expenditure on many desirable projects. Some of these expenditures were financed out of real growth. Some of them exceeded the growth and then the growth stopped altogether, but the rise in public expenditure continued, and so did the rise in borrowing.

People who have become accustomed to think of Government services as “free” are now realising that there is no such thing as a Government grant, only a taxpeyers' grant.

Now expenditures which, looked at in isolation, may seem socially desirable, have to be judged by their economic effect: will they in the end reduce the incentive to create more wealth by taking away too large a proportion of present effort and discouraging more?

Over the years the political emphasis has been on greater and greater expectations. The other side of the equation is greater effort. Without the effort the expectations cannot be realised. Without the extra production, extra money will only result in increased prices.

This is the lesson not only for Britain but for many other countries too. And a lesson none of us can afford to ignore. From time to time, we move into a different world. This is just such a time. For it has been brought home to us what we have known intellectually for years—that the world's resources of raw materials are finite and that some of the solutions to our problems may be in the direction not of using more, but of using less. Further the developing nations who have some of these commodities, though by no means all, expect their standard of living to rise at a faster rate than in the past.

In the last session of the United Nations we saw a degree of co-operation and mutual understanding greater than we have seen in the past. The interdependence of nations is now becoming a reality as well as an ideal.

Canada and Britain have a great deal to contribute to this forward movement. [end p5]

We are both part of the Atlantic Societies—societies which have shown the world how much increased prosperity can and does result from giving rein to freedom of opportunity—a freedom based on individual choice and decision. We both inherit the European Tradition—a European history which not only inspired our democratic ideals but which gave us an artistic culture and a scientific inventiveness. And it gave us something else—the capacity to use those benefits for our peoples as a whole.

Many nations have invented things. It is the capacity and the vitality to turn those inventions to greater use which raises the standards of our people. And we are both senior members of the Commonwealth of Nations. A Commonwealth which because of its diverse interests and experience, because of the way in which it has met and overcome many difficulties, because of its ideals, tolerance and humanity, has much to offer to the counsels of the world.

We are proud that we both share these traditions.

I am told that in the LESTER B. PEARSON BUILDING this tribute to Mr. Pearson appears:

“Sooner and better than his contemporaries he had come to understand that the world, for all of its diversity was one … that no nation, even the most powerful, could escape a common creaturehood and a common peril” .

This is the challenge of our times and it is a challenge we in Canada and Britain can and shall meet.