Speeches, Interviews & Other Statements

Margaret Thatcher

Speech at Lord Mayor’s Banquet

Document type: Speeches, interviews, etc.
Venue: Guildhall, City of London
Source: Thatcher Archive: speaking text
Editorial comments: MT arrived at 1845. She wrote "2133-2159 26 minutes" on the delivery copy.
Importance ranking: Key
Word count: 2550
Themes: Commonwealth (general), Conservatism, Defence (general), Defence (arms control), Economy (general discussions), Employment, Monetary policy, Privatized & state industries, Public spending & borrowing, European Union (general), European Union Budget, Foreign policy (general discussions), Foreign policy (development, aid, etc), Foreign policy (International organizations), Foreign policy (Middle East), Foreign policy (USA), Foreign policy (USSR & successor states), Women


My Lord Mayor, My LateLord Mayor, Archbishop Robert Runcie Your Grace, your Excellencies, My Lords, Ladies and Gentlemen,

thank you for your generous welcome, and may I congratulate you on your splendid speech. I am delighted to be here again at the Guildhall. And I'm glad to be able to say that “Yes Minister” is not the only programme to run for a second series.

My Lord Mayor, as a keen sailor you no doubt followed the Americas Cup with interest. [end p1] It was said that Australia's brilliant victory ended the world's longest winning run. You, My Lord Mayor, have ended an even longer winning run. And I'm very proud to be standing here in Guildhall beside you on this historic occasion. You, as you said, are the 656th Lord Mayor of London. [end p2] And I am merely the 48th Prime Minister. Most of our predecessors would, I think, have rubbed their eyes in astonishment to see us here together this evening.

And I'd like to congratulate you, too, Sir John Donaldson on a unique achievement. You are the first Master of the Rolls to be married to a Lord Mayor. [end p3] I wonder how often you will have to explain that the Master of the Rolls is not the man who arranges the Lord Mayor's limousines.

The world is full of surprises. What was unthinkable yesterday is commonplace and conventional today. [end p4]

The City's success is built on trust. That trust comes from lasting integrity.

But, important as it is, integrity alone is not enough. Not even the most hallowed of your institutions is immune from change. I believe even the Stock Exchange is undergoing one or two adjustments. [end p5]

Behind its formal magnificence, the City of London is as quick to change as any square mile on earth. And experience has taught us that governments, too, must have the strength to adapt to the realities of a changing world. [end p6]

Four years ago when I first addressed this great Banquet the Government faced a daunting task. [end p7]

The saying that “politics is the art of the possible” can so easily be used as an alibi for failing to attempt the difficult things, for lowering our sights and for limiting our vision. Britain deserved better than that.

Facing The Truch

Today, after four years, there is a new spirit of confidence and self-respect here at home. [end p8] This was not achieved easily. We had to face some uncomfortable truths, and explode some comfortable myths.

We faced the truth about inflation. Printing money was a policy pursued by weak governments. It took courage to fight it—by government and people alike. Together we are winning. [end p9] But success must never be taken for granted. The battle has to be fought anew every year and every day.

We exploded the myth that governments can spend their way to economic revival—a half doctrine of Maynard Keynes peddled by those who persistently ignore the other half. [end p10]

This Government has set itself the task of holding public spending next year and the year after to the amount planned and published before the Election. When Nigel Lawsonthe Chancellor publishes his Autumn Statement next Thursday it will be clear that we have done just that. It hasn't been easy, but then I take the view that a government must apply to its own activities those same disciplines which others have to apply to theirs. [end p11]

But the most debilitating myth was that the state can perpetually provide a higher standard of living regardless of individual effort. It can't and it never could. [end p12]

Even those who planned the reconstruction of our society in the last days of the war did not have a vision of an all-providing government. [end p13] It was Lord Beveridge himself who wrote: “The underlying principle of the report is to propose for the state only those things which the state alone can do, or which it can do better than any local authority or than private citizens.”

Never believe that big government is necessarily strong government. The opposite is true. [end p14] Once Ministers meddle in everything, government has neither the time nor the means to do those things which only government can do.

Moreover, there are many things, like running great industries, which government is simply not equipped to do. [end p15]

Since we came to power, a dozen state-owned businesses have been denationalised and have flourished.

And in the process over 100,000 people have taken the chance to buy a stake in the company they work for. [end p16]

Add them to the 750,000 people who have bought or are buying their council houses and you will see that we have carried forward the historic task of all governments that love liberty, of extending ownership of property more and more widely among our people. And make no mistake—this is a journey which is only just beginning. [end p17]


My Lord Mayor, we all remember the moving words in which your predecessor spoke a year ago about opportunities for young people. No Lord Mayor has devoted himself to that cause more energetically and more effectively than Sir Anthony Jolliffe. [end p18] Best of all, he has pledged himself to carry forward his work after his year of office has ended. We owe him a great debt of gratitude.

This year the Government has launched the largest training scheme ever for our young people. A year ago, we said that every 16-year-old should have a choice between staying on at school, finding a job, or receiving training. [end p19]

My Lord Mayor, we are on target. By Christmas there will be a place available for every single 16-year-old. For them, unemployment should not be an option.

It's the most imaginative training programme in Europe. And I thank most warmly all those here who have taken part in it. [end p20]


Since I spoke to you a year ago, we have seen some recovery from recession in the western world.

But International Debt problems are still a cause for serious concern and will hamper the recovery of world trade. [end p21] This apart, the prospects for the world economy are more encouraging now than for years.

Britain's growth this year will be the fastest in the European Community. The Commission forecasts that this will again be true next year. [end p22]

How was this achieved? By increased public spending? By still more public borrowing? Quite the reverse.

You may remember in 1981 when Sir Geoffrey Howe took his courageous steps to cut Government borrowing 364 economists united in condemning his action. 364 economists one for almost every day of the year. What an alarming thought. And all of them actually in agreement! [end p23] They said the Chancellor was wrong. They said he would deepen the recession. It was they who were wrong for Britain's recovery dates from that time.

My Lord Mayor, it is financial discipline that creates the conditions for healthy growth, it is financial discipline that encourages better productivity and competitiveness, and it is financial discipline that promotes more lively and efficient management. [end p24]

Instead of languishing at the bottom of the productivity league, Britain is moving up the table. And although unemployment is still tragically high, there is a most encouraging sign:- the number of people in work has begun to rise again. [end p25]

A word about international debt because I am in the city Britain is helping with these problems, directly and through the IMF. And commercial banks in this country are also helping, where further lending is consistent with banking prudence. But it is ultimately up to the debtor countries themselves to take determined measures on their own behalf. Mexico has shown a way forward. We hope that Brazil will soon follow. [end p26]


In foreign affairs, my Lord Mayor, the international scene of today has no precedent. For thirty years we have been accustomed to a world dominated by two super powers. Each with a military strength inconceivable to previous [end p27] generations. We have to look back two or three thousand years, to the empire of Persia or Rome, to find even one power with such military ascendancy over its neighbours. Never in times of peace has there been such a rigid division of Europe as now exists between Soviet Communism and democratic freedom. This division has extended to other continents. [end p28]

That is not all. In one generation, the tidal wave of decolonisation has created a far greater number of independent nation states than ever before. When the United Nations was founded in 1945 it had a membership of 51 states, only 11 of which came from Africa and Asia. [end p29] Who would have thought that less than 40 years later the membership would have mounted to 158 including 90 African and Asian states. Decolonisation also exposed the newly independent countries to fresh dangers, and uncovered old conflicts which had been masked by an imperial presence. [end p30]

Indeed, there have been many savage and costly wars, in the Middle East, South East Asia and Africa. Millions of people have been made homeless. Millions have died. Sometimes, for example in the Middle East, parties to disputes have sought and found outside help, and so planted the seeds of wider conflict in areas of local tension. [end p31]

In Europe, the traditional battleground, we have been spared, for nearly 40 years, the horrors of war, and the tragic human sacrifice, which only yesterday the nation once more so movingly honoured and remembered.

When we recall these things, let us not forget it is the strength and resolution of the Western Alliance which keeps the peace today and which has discouraged [end p32] expansion into Western Europe across the Iron Curtain.

The need to deter aggression has imposed a heavy burden on our economies and a searching test of our will. Nevertheless we have not had a major East/West crisis in Europe for many years, something for which we should be profoundly thankful. [end p33]

Britain has been a strong and loyal member of the Western Alliance since its foundation.

Friends, like families, differ at times but nothing alters these basic truths—that the United States is our ultimate defensive shield, the guarantor of Western freedom, and the best hope for the world's oppressed. To that conviction we hold. [end p34] We are confident that any differences that may occur will always be infinitely less important than the purposes and loyalties which bind us together. [end p35]


No region is more troubled than the Middle East. We profoundly hope that the Lebanon will find a way through its present agonies and regain a sovereign, independent existence, free from foreign troops and rid of the forces of violence. We have a small contingent of British Troops in that country. [end p36] Their work carried out in most difficult circumstances is highly valued and I pay tribute to their steadfastness and integrity.

Meanwhile the Iraq/Iran conflict continues with its enormous loss of life, human suffering and material damage.

These two conflicts present a further obstacle to progress on the wider Palestinian issue. [end p37] Fighting among the Palestinians themselves further aggravates the situation.


It is often said that Europe should play a bigger role in solving these and other world problems. The truth is that in the present condition of the European Community it cannot do so. [end p38]

We need a Community that is free of internal disputes and able to exert its full weight as a force for democracy and stability.

In three weeks' the Community's leaders meet in Athens to tackle the reform of the Community Budget and the Common Agricultural Policy. [end p39]

On the Community Budget, it is not privilege that we seek but equity. Unless the burden is fairly shared, resentment will grow—and not just in this country.

On the Common Agricultural Policy, we are making strenuous efforts to bring the costs under control. [end p40] It just doesn't make sense to go on producing surpluses that have to be sold at a loss, at an immense cost to the taxpayer and upsetting world markets.

If we can solve these problems—and sooner or later we have to—then at last the Community will be able to recover its momentum and work far more effectively for a better future. [end p41]


My Lord Mayor, many people who are deeply concerned about that future are understandably worried about the deployment of cruise missiles. Of course we would rather not have to deploy these weapons. For four years the Western Alliance has tried to reach an agreement with the Soviet Union that would make deployment unnecessary. [end p42] But so far one thing has made agreement impossible. The Soviet Union has tried to insist on a monopoly in Europe of modern medium-range missiles. That monopoly we simply cannot accept.

Let me dispose of two myths about cruise missiles. [end p43]

First myth: that as soon as we deploy Cruise we destroy the chance of an arms control agreement with the Russians. Not true. There will only be a few Cruise missiles here by the end of this year. The rest will come in slowly over five years. They are easily transportable and could be returned to the United States as soon as a satisfactory agreement were reached with the Soviet Union. [end p44]

Second myth: that deploying Cruise missiles means escalating the nuclear arms race. Not true. Look at the facts, because they are too little known. Even if all the Cruise missiles and Pershings have to be deployed, US nuclear warheads in Europe will nevertheless have been reduced by 2,400 since 1979. [end p45]

Moreover, counting intermediate and strategic weapons together, the Americans now have one-third fewer nuclear weapons than they had in 1967. As Mr. Weinberger has pointed out to Congress, the total explosive power of all US nuclear weapons is only 25 per cent of what it was in 1960. So don't be misled by the hurricane of propaganda blowing across Europe from the East. [end p46]

We really mean it when we say that we want to negotiate arms control agreements. Not only on nuclear weapons but on conventional forces as well. [end p47]

My Lord Mayor, I have said in recent speeches in Washington and in Blackpool—that I seek a better relationship between East and West. But let me make it clear. This Government will not compromise on principles. We shall do all that is necessary to defend our way of life. That is not up for negotiation. [end p48] The conflict of ideas will continue and we shall do all we can to win.

But we seek no other kind of conflict. We will do everything possible to reduce the risks of war and to avoid the misunderstandings which increase those risks. Britain is ready to pursue, in the right circumstances, a sensible dialogue with the Soviet Union and the countries of Eastern Europe. [end p49] It is in that spirit that I have accepted an invitation to visit Hungary early next year.

We want and will work for a safer world. Let it never be said that we failed because East and West misunderstood one another. [end p50]

My Lord Mayor, it is our destiny to be living at a time when there exist weapons of war of a dimension hitherto unknown.

At such a time, there is an inevitable feeling of anxiety, of unease that is widely shared.

But there is another feeling that comes to many of us. It is that we as a country have something unique to offer to a troubled age. [end p51]

A sense of fairness, a calm approach, a love of liberty, an experience of a wider world—all these things come down to us from centuries of history.

But let no-one mistake our firmness of purpose.

This nation has met the challenges of other times. I have no doubt that we shall rise to the challenges of our times. [end p52]

We shall stay true to our principles. We shall prove worthy of our inheritance. We shall be equal to the task.