Twelve months ago we met in Perth on the morrow of a great Election victory. I did not then offer you soft options and easy answers. I believed then, and I believe today, that we have had more than enough of them over the long, sad years of decline. I urged you not to underestimate the task that lay ahead of us; and I warned you that we should need both patience and high courage to see it through.
Today I want to chart our progress, and point the way ahead.
They told us when we came to office that a Conservative Government would be confronted with wholesale disruption; that we should find a nation which had become “ungovernable” . [end p1]
We don't seem to hear so much that sort of talk today.
I wonder why?
Could it be that our critics sometimes recall the disruption of essential services which marked the spring of 1979; the miseries too often inflicted on the sick and on the old; the hospitals blockaded, the Cheshire Homes denied essential supplies?
Is this why they have fallen silent? As well they might; for we have begun to remind people that Government is not a party to every wage negotiation. Public dislocation designed to apply political pressure is not only anti-social, but futile. Beginning of section checked against BBC Radio News Report 2200 9 May 1980:
They won't change Government policies. And it's got nothing to do with the realities of pay bargaining. As I hope Mr. Murray and the TUC will recognise before perpetuating the job-destroying folly planned for May 14th. [End of section checked against BBC Radio News Report 2200 9 May 1980.] (Applause.) Who would win—our competitors? Who would lose—Britain. [end p2]
Some critics also told us, I seem to recall, that the Tory Party was led by an “Iron Lady” with weird obsessions about the dangers of aggression by dear benevolent Mr. Brezhnev; a dangerous lady who was going to wreck the wonders of detente.
Again, we don't seem to hear quite so much of that sort of talk today. Perhaps we've seen rather a lot of the benevolence of Mr. Brezhnev—towards his neighbours. The Afghanistan experience has shown us all what the “hug of the bear” is liable to mean.
But more of that later—let us first consider matters a little closer to home.
For too long, people in Britain were encouraged to believe that our problems could be dealt with regardless of what was going on in the wider world. We had become too inward-looking, too depressed by our own failures to see the opportunities of the future. [end p3]
“No man is an island” : but nor can any town, or region—or even country—prosper in isolation from the world outside. Grants and subsidies can provide temporary help to an area in transition: but they provide no permanent solution.
Scotland has her own problems. But Scotland can prosper only if the United Kingdom prospers. In its turn, the United Kingdom needs a prosperous Europe, and a world in which peace is secure and trade expanding. [end p4]
The Government's strategy of economic realism, looking not just to the problems of the present but to the opportunities of the future, offers the only way ahead for Britain. And because some of Scotland's problems are of longer standing and are more deep-rooted than those of the south east, it is even more important that they should not be dealt with on a basis of short-term expediency.
Realism can be painful now; but without it the eventual revival will be even longer delayed. When it comes, the skills and the labour resources of Scotland will find opportunities they have for too long been denied.
So let us look outwards, not inwards, and to the future rather than to the past.
We have to make Britain a land of opportunity. [end p5]
Opportunity to decide how we should spend our money, instead of having the decisions taken for us in Whitehall.
That was what Geoffrey Howe 's first Budget was about: shifting tax from what we earned to what we spent. We believe that millions of ordinary citizens prefer to fix their own priorities, with less deducted from the pay packet. That's what opportunity is all about.
Opportunity to start up the enterprises of the future. That was the theme of Geoffrey Howe 's second Budget.
Many of our great traditional industries face the need to reduce manning levels to meet the challenges of the 1980s. It is, as I said, a painful process. Change is always hard—but resistance to change is ultimately far harder. [end p6]
That is why successive Governments have developed redundancy payments to cushion the blow. Today tens of thousands of long-service employees receive—and rightly receive—sums in compensation for redundancy which offer them the chance, for the first time in their lives, to launch out on their own.
The special encouragements to small business in the Budget were precisely designed to give them a fair wind. If the victims of today's retrenchment become tomorrow's merchant venturers, we shall have laid the foundations of a far healthier and more prosperous future for our children than we can ever hope to offer them by clinging to the monuments of the past. [end p7]
Opportunity to acquire the ownership of that fundamental family possession: a home. George Younger, Malcolm Rifkind and Michael Heseltine are now piloting through Parliament legislation to give to every council tenant the right to buy the family home—and at a bargain price. Nowhere is this more important than in Scotland. For nowhere else in the United Kingdom are so many people locked into local government tenancies with no present possibility of escape.
Let no-one say they do not want it. Since we published our proposals last summer, 1500 tenants in Scotland have bought their own homes, and at this moment another 12,000 applications to buy are being processed. But these are the lucky ones; they are tenants of local authorities—mostly Tory—which are willing to recognise their entitlement to become home-owners. [end p8] There have been, to date, another 18,000 enquiries from would-be purchasers. Many of them will be frustrated in their ambitions until our Bill gives them the right which Labour councils are denying them. We shall not betray them.
Opportunity and choice go hand in hand. Monopoly denies both.
Monopoly, by definition, is the denial of choice to the consumer. Monopoly is absolved from the pressures of competition to improve the service that it offers to the customer. Too often it appears to be primarily concerned with the interests of those on its payroll, regardless of the effect on the consumer. [end p9]
We have a Monopolies Commission and an office of Fair Trading to police the private sector, and we are strengthening their powers. It is right that we should do so. But the greatest hazards of abuse arise from the statutory monopolies of the public corporations. That is why we have decided to ask the Monopolies Commission to look at some of them as well. They have already scrutinised certain aspects of the Post Office, and they are now looking at British Rail Commuter Services.
But while the Monopolies Commission can shed necessary light on dark places, it is debarred from applying to the public monopolies the ultimate sanction that can be imposed on those in private industry: the obligation to restore competition. [end p10] That remains the Government's own responsibility. That is why Norman Fowler is carrying through Parliament legislation to allow private enterprise buses to compete more freely with the public transport monopolies. And why Keith Joseph is going to have a go at the statutory monopolies of the post and telephone services.
For years we have tried to lay down from the centre what each of us could earn, what businesses could charge, where they could make their investments, and what they could pay in dividends. We hoped that this would help to halt inflation. It did nothing of the kind. [end p11]
Every so-called “incomes policy” collapses as the last one did: and the one before that, and again before that. And when it does the floodgates burst.
Governments can't absolve people from their responsibilities if Society is to remain free. So we have put back the responsibility for pay bargaining, where it belongs—with management and unions who know the conditions in their factories and the market for their products. Sadly it takes time for attitudes to change; and meanwhile great damage can be done. The necessary adaptation is made far more difficult, I believe, by the extent to which the structures of trade unions have grown apart from the workers they claim to represent. [end p12]
All too often the unions call the strikes—even where there is no dispute—but it is the workers who suffer the consequences.
Redundancies are taking place today as a result of last autumn's stoppages in engineering. Tens of thousands of those who took part knew all too well what the consequences for them might be. They did not wish to take the risk. But they were not consulted, and for the most part they did as they were told. No doubt they fear retribution for disobedience.
What can government do about these things? First, we are seeking to make the union leadership more responsive by providing funds for ballots of the membership—unions with an instinct for democracy will respond to this offer. [end p13] Second, we are changing the law to remove the worst abuses of the closed shop and to restrict picketing to the place of work of the picket.
Third, we have made it clear in Parliament that every police chief in the land will have the total backing of the Government in enforcing the law which says that those who want to go to work can get there.
But in the end so many of these things come back to personal responsibility. As Mr. Terry Duffy rightly pointed out the other day, it doesn't benefit the shop floor worker to stick out for more if winning it means pricing himself out of his job. This message is making its impact; but too often it is only doing so when the business concerned is already on the brink of failure. Our appeal to everyman and woman at his place of work in Scotland is this; jam today can't be worth redundancy tomorrow. [end p14]
Thankfully, much of British industry and commerce is confronting the challenges of a strong exchange rate, and a stagnant pattern of international trade, with great resilience. Let me quote a handful of Scottish examples.
Down the Tay at Dundee, Timex are in the midst of a £12 million expansion to take them into a brand new field of 3D photography. At South Queensferry, Hewlett Packard are spending £2½ million to build a new unit for which 350 recruits will eventually be needed, to produce printed circuit boards. [end p15]
In the Borders the knitwear firm of Dawson International this year won a Queen's award for export performance—performance which promises a prosperous future for Dawson's 5,500 employees; and this at a time when we are sometimes given the impression that textiles in Britain are having a difficult time.
In Glasgow Barr and Stroud are just starting on a major expansion project to create 250 jobs, investing £4.6 million; while Prestwick Circuits, another growing electronics company, is doubling its production capacity to cater for export orders. [end p16]
I could go on: but you will note that all these examples have two things in common. All are free enterprise concerns, and all are winning orders around the world. Do you know that last year we in Britain sold 8 per cent more air-conditioning plants, 4 per cent more colour television sets, 8 per cent more women's clothing, and a remarkable 35 per cent more electronic micro-circuitry—much of it made right here in Scotland—to our customers overseas? In the course of the last decade the proportion of our resources accounted for by exports rose from 23 to 30 per cent. [end p17]
I wish we heard more of the achievements of firms which refuse to be daunted by the challenges of today.
I don't for one moment underestimate their difficulties, with a strong pound and dear money. Nor do I seek to disguise the fact that progress has been patchy. If earnings go on rising much faster than output the result will be higher unemployment. The gap has got to narrow. But it is no coincidence that, in the wage round now ending, the gap has been widest where the pressures of competition are weakest.
The level of settlements has been generally lower in manufacturing industry, where the impact of the international market place has been strongest. It has been higher in the service industries; and highest of all in the public monopolies. [end p18]
Geoffrey Howe, with the cooperation of every Minister, has set out to secure a steady reduction in public spending and borrowing over the lifetime of this Parliament, together with a strict control of the supply of money. Sticking to that path will not be easy, or always comfortable, but stick to it we shall.
Already there are signs that the policies are beginning to work. The tide of excess credit which threatened to swamp us when we first took office is on the ebb. Provided this trend continues I hope it will not be too long before we can look forward to lower interest rates without any relaxation of our stand against inflation.
That is the way that we must go. Of course, it is tempting to follow the soft advice of those who would have us slash the exchange rate and churn out extra money. [end p19] But what would be the consequence? Money would lose its value with ever accelerating rapidity and all hope of a long term solution to our problems would be lost.
Our decision, instead, to keep a tight rein on money and on public spending means that the climate for productive investment at home, creating the job opportunities of the 1980s and the 1990s, will steadily improve.
Simultaneously we have the windfall of North Sea oil. Like all windfalls, it will not last for long, and it must not be squandered. [end p20]
Should we heed the advice of those who would have us turn it into a Government-directed investment fund? But when we reflect upon the record, can we really be sure that politicians make the best investment decisions? Were the millions spent by our predecessors on Portavadie, or on the ships the Poles will be happily using to undercut our shipping lines, really examples of money wisely put to use? It hardly looks that way to me.
The winning of North Sea oil is a miracle of free enterprise investment. We must use its proceeds to create more wealth to sustain us long after the oil has been depleted. Just as free enterprise created this opportunity, so given the chance it will find the investments of the future. The wealthiest countries are those which have give full rein to the genius and inventiveness of their people. It is time Britain rejoined their ranks. [end p21]
But Britain can prosper only in a world in which peace is secure and trade expanding.
So now let us look for a moment beyond Scotland, beyond the United Kingdom, to the problems of that wider world in which we have to live. A world to which, because of our history, our traditions, our culture and our skills, we have much to contribute.
I came to office twelve months ago with a vision of what Britain's role in the world should be: a nation able to defend its interests; a nation able to give a lead in world affairs; a nation able to act rather than react; above all, a nation whose self respect was restored. We have come a long way towards that goal. [end p22]
We are defending our interests energetically and successfully in the effort to reduce our inequitable contribution to the European Community's budget. We inherited this intractable problem from our predecessors. They had identified it. They had complained about it. They had failed to tackle it. We have done so. We have negotiated hard but fairly over a period of many months. Our partners have recognised both the fairness and firmness of our claim. Last week's discussions in Luxembourg have shown how far they have moved towards us. I am confident that in the few weeks before the next Heads of Government meeting the remaining gap can be closed. [end p23]
We have given a lead a major international issues.
Not long after we came to office, a British proposal resulted in the convening of the Geneva Conference which did so much to alleviate the suffering of the Vietnamese refugees in South East Asia.
We have put forward proposals for the neutrality, non-alignment and independence of Afghanistan which have received much international support and may yet show us the way out of that terrible situation.
We are actively encouraging closer cooperation on foreign policy issues among our European partners. There is no reason why the domestic argument about the Community's budget should inhibit joint European action on external issues. Such action needs to be accompanied by the development of better links with our other major allies. [end p24]
We showed at Lusaka; at Lancaster House, and in Salisbury, that we are once more a nation capable of action rather than reaction. The Rhodesian problem had defied solution for fifteen years. Last May a peaceful outcome seemed more remote than ever. But in the space of 10 months an answer was found and Zimbabwe has now embarked on nationhood in circumstances more favourable than many had dreamed possible. Of course, all those directly concerned had wanted peace. But someone had to find the path: we did so. [end p25]
Our renewed ability to act has been shown in even more dramatic fashion in London earlier this week. The patience, professionalism and, finally, the courage shown by all those involved in handling the siege of the Iranian Embassy, was beyond compare. The effectiveness of our response to the situation and the demonstration of our determination to uphold the law will have lasting international repercussions. In particular its significance should not be lost on those who make terrorism a way of life.
The restoration of our self respect is underlined by the letters I get from people telling me how proud they are that, when travelling abroad, it once more means something to be British. [end p26]
But there can be no question of resting on our laurels. The re-establishment of Britain's standing in the world is more than an end in itself. We live in a troubled time. The international community is threatened by Soviet military power and expansionist ambitions; by Soviet proxies and Soviet subversion. These would be immense problems even in a stable and prosperous world. They are still more dangerous in a world where violence is too often the first recourse of those who are angry about the past, frustrated by the present or frightened of the future. Britain has a major role to play in ensuring that policies of firmness and conviction are pursued and that the present feverish mood is resisted. [end p27]
We must never cease to demonstrate our confidence in our institutions. We must proclaim the superiority of our way of life. Our constant objective must be to make it possible for other peoples to choose democracy. We must prove to the non-aligned that it is only the Western nations who wish to preserve their freedom of choice while it is the Communist nations who wish to remove it.
To that end, we shall always be staunch advocates of genuine independence for all states.
I returned last night from attending the funeral of President Tito of Yugoslavia. We were all impressed not only by the moving scenes of affection for a great leader but also by the sense of calm and dignity in Belgrade. Yugoslavia is a nation confident in its sense of national purpose and sure of the path it wishes to follow. [end p28] Its political system is not one we would have chosen, but it is neither imposed nor sustained from outside. That is what matters.
The contrast with Afghanistan is complete. There the Soviet Union is seeking to subjugate an independent people by brute force. The massacre of school children demonstrating against the occupation of their country is but the latest in a catalogue of barbarities. We must continue to demonstrate to the Soviet Union that they have earned the contempt and anger of the world. We must show that there is an unwavering international determination to right the wrong they have committed. We cannot expel the Soviet troops but we can boycott the Olympics and we can refuse to provide the Soviet Government with cheap credit, cheap food and cheap technology. [end p29]
The independence of Iran must also be preserved. The Iranians are tragically unsure of where they are going. But they alone must decide how they want to live and be governed. The West has no desire to interfere in their internal affairs.
But we do have the right to insist on respect for fundamental international and moral obligations. We in Britain have recently shown our own respect for those obligations. It's intolerable that the American diplomats should ever have been taken hostage. It is even more intolerable that after six months they should still be held prisoners. [end p30]
The holding of hostages can make no contribution to a solution of Iran's problems. It sours relationships throughout the region. It is making the search for solutions to the other crises there immensely more complex. The West has no option but to make its condemnation clear through the exercise of diplomatic, political and economic pressure. I exclude military action because I do not think it would achieve its objective and because its side effects could be disastrous.
It is deeply regrettable that we are being forced to resort to policies against Iran which are similar to those which have flowed from the Soviet Union's invasion of Afghanistan. But there would be even greater dangers in a failure to recognise that, in Iran as in Afghanistan, there are limits which cannot be overstepped with impunity. [end p31]
The effort to establish those limits more clearly and to ensure that they are observed will be a prime element in Western policy in the years immediately ahead.
You may be sure that Britain's role in that effort, as in world affairs generally, will be a leading one. [end p32]
Already, when I travel overseas, I find a new respect for Britain. They sometimes tell me I fight too hard for our country's rights and interests.
I plead guilty to that charge, though I must say that I don't feel very guilty about it.
We are rightly proud of our country.
But pride requires the backing of purpose and performance. Purpose we have today. Performance we must achieve. [end p33]
If we succeed, Britain's prospects will be transformed. Alone among nations we combine self-sufficiency in that most precious of commodities, energy, with a skilled and resourceful people: a stable and democratic tradition, and a Government which knows precisely where it is going.
We do not intend to throw this opportunity away. With your support the vision can be made reality; a country more united; not just more prosperous, but happier; proud of its success and of its place in a more stable and peaceful world.