Mr. Chairman, Mr. Nicholson, My Lord Lieutenant, My Lords, Ladies and Gentlemen. Tonight we celebrate the success of northern business and northern enterprise. The businessmen of the North East were the pioneers of industrialisation a century and a half ago. Coal-mining and steel, shipbuilding and heavy engineering dominated the economy and the landscape of [end p1] the North East. Yours was then one of the richest parts of Britain. It showed in the vibrant cities which grew up wherever the Northern rivers go down to the sea. It shows in the universities and in your fine country and town buildings. [end p2]
But for several decades you have faced mounting challenges as changing technologies, markets and new foreign competition gnawed at the old pillars of Northern prosperity. No-one underestimates how hard your fight has been. Nor the problems that were left in its wake. Problems that for convenient shorthand we [end p3] cover by the phrase “inner cities” .
Of course they are not unique. Cities have risen and declined since the beginning of recorded time. Risen in the new markets, new opportunities and technology of their day. Declined when they have failed to catch the changing tide of markets, or to find a new outlet for the talents and skills of [end p4] their inhabitants. That has happened in too many of our cities.
But you have faced the challenge. And you have fought back.
Since the first North East Businessman of the Year Award in 1984 the event has each year grown in size and importance. It has justified the initial faith of its [end p5] sponsors, the Newcastle Chronicle and Swallow Hotels. Although one Swallow does not make a summer, after six you may well be onto something big—a blossoming of renewed confidence in the attitudes, vitality and independence of companies in the North East. [end p6]
ECONOMY
Mr Chairman, the North East is truly prospering. And so is the whole country.
I wonder how many people realise that: —we have now had seven years of steady growth averaging over three per cent; [end p7] and we are heading for our eighth; —the number of jobs we have now is at record levels, over 25 million; —investment in the 1980s has grown faster in Britain than in any other major European country; [end p8] —that business profitability is higher than it's been for twenty years.
Yes indeed. And so the standard of living of our people—and the level of provision for our social services—are higher than ever before. [end p9]
These are real achievements; and they are reflected in everyday lives at work and at home.
But none of this came about by accident. It happened because, after decades of getting it wrong, we've now got the policy framework right. Government has concentrated on its proper role. [end p10] And personal effort and enterprise have been set free to build and revitalise our industry and commerce.
Yes of course there are problems—there always will be. Right now we have to bear down on inflation and so in time reduce the trade deficit. That's why we acted quickly last year to [end p11] raise interest rates. Of course higher interest rates are unwelcome to those who borrow, although not to those who save. But it's saving that we need to encourage, while we discourage borrowing to finance excessive consumption.
The results of the action we have taken should be showing through this year. [end p12]
The worst thing we could do for business, for investment, for confidence, would be to sit back and let inflation mount.
The Government's job is not only about keeping financial policies sound, vital though that is. The wealth of the nation comes from the talents and abilities of her people. Stifle them and the country declines. [end p13] Free them and the whole nation benefits.
That is why we have reduced controls and restored incentives.
It is only ten years ago that the top rate of tax on earnings was 83 pence in the pound; and on savings 98 pence in the pound. Now it is 40 pence in the pound for both. [end p14]
It is only ten years ago that the standard rate of tax on earnings was 33 pence in the pound, now it is down to 25 pence. Haven't our [Geoffrey Howe and Nigel Lawson] two Chancellors of the Exchequer done well?
But I referred earlier to getting the policy framework right. May I enlarge upon that. First, it is the Government's duty to set [end p15] standards and to see that they are observed: —standards of safety at work; whether in shop or office or factory; —standards for consumer goods; —standards of health for food products; [end p16] —standards against pollution.
You will know that both we and the European Community are active in this role. And it is my belief that as we become more prosperous so people will demand higher standards, whether as customers or as individual citizens who care about their environment. One of the most encouraging things about [end p17] life today is that so many people are taking the long term view.
Second, we must have firm and clear rules to sustain competition. So that businesses cannot simply cosy up together to form cartels or carve up markets between them. And when, in a few cases, an industry by its nature dominates a market we have [end p18] provided the necessary, strong regulatory control to protect the interests of the consumer. Nowhere can that be seen better than in the new National Rivers Authority and the new Director General of Water Services proposed in current legislation. The framework of law, like that of business, has to be responsive to contemporary needs. [end p19]
And third, Government has to lubricate the wheels of change so that we may travel more easily on the road from the industries of the past to those of the future. So we invented Urban Development Corporations to cut the red tape. You have one for the Tyne and the Wear and one for the Tees. We invented Enterprise Zones to cut the [end p20] rates and bring tax benefits in the starting years. You will have a new one in Sunderland. We have brought many of the grants together as a City Grant, targetted better on the inner cities. And we have fashioned City Action Teams to ensure that all the many types of grant and help are brought together to bear on local problems. [end p21]
And fourth we have active policies to enlarge opportunities. Above all in education. Young people need the right grounding in English and Maths and Science, in how to conduct themselves and to be articulate. So they are ready to be trained for the world of work. [end p22]
And where council housing has run down badly we created Estate Action which set in hand capital and maintenance work and gets the estate better managed to improve living conditions. We have started Housing Action Trusts to take over the especially difficult estates and improve them, provided the tenants consent. [end p23]
Perhaps I should add one more point to complete the framework: at the heart of our policies is a desire to see a true capital owning democracy. At last people can build up capital from their own earnings whether it be in house or share purchase. So that those who, like most people, inherited nothing, will have created an inheritance to pass on to their children. [end p24]
These are the true tasks of Government. Not to run business or industry. We don't know how. But to concentrate on getting the conditions right for you to respond.
They rest on our fundamental faith in the individual. And how well you have repaid it. [end p25]
Our policies and the character of the people of the North have come together and have already accomplished so much.
Here in Gateshead: —already famous for its Metrocentre, and soon to be famous for a City Technology College which teaches not only general knowledge and the practical sciences but which also has at its basis [end p26] Christian values which it is proud to teach. —you also have the first Garden Festival to sell out its site completely before the event has even started; (the last chunk was bought by McAlpine 's tonight). [end p27]
In Newcastle: —the rebirth of the whole of the Quayside with two hundred and fifty million pounds of private investment for new houses, offices and shops.
In Washington: —Nissan's car plant, perhaps the best known example of many inward investments in the area. [end p28] In total 220 firms providing 42,000 jobs.
In the North East region at large: —a powerful science base with new technology institutions in Newcastle, Durham and Middlesborough; indeed the North East now produces half of all the pharmaceuticals in the United Kingdom; [end p29] —and more people than ever before are working for themselves: 100,000 now; with 6,000 new businesses starting up every year.
All this is a marvellous example of “Action for Cities” which is a year old this week. To mark its birthday we have published a report called “Progress on Cities” . It details how your success is being [end p30] repeated in other cities all across Britain, in Liverpool, Manchester, Birmingham, Sheffield, Bradford and many more.
And, Mr. Chairman, there is another gradual change going on around us. The change to a Single European Market. We shan't wake up one morning to find everything different, but each day new [end p31] opportunities will open up before us. Come 1992 you can be well set up here. You have a long history of trading from your three great ports. There are opportunities galore not only for the big boys but for small and medium-sized companies. Geographical distances are no limit. The Japanese know that. But so do North Eastern companies. [end p32]
More of you won Queen's Awards for exports last year than ever before. Companies like: —Berghaus, selling skiing and mountaineering equipment to the French for the Pyrenees, the Italians for the Dolomites and the Germans for the Alps. [end p33] —Cleveland Potash who have proved it does not need an original product, just good management, to be able to sell half your output to the rest of Europe.
And the other Companies—Ingersoll Rand, NEI and Davy Mckee—who have taught more and more countries that “it's better made in Britain” . [end p34]
So the North East is rising to this new challenge. Because the combination of sustained economic growth and the enterprise culture is like Newcastle Brown a powerful brew. And it is reaching the parts that other political brews cannot reach. The success which is changing the face of the North East represents a decisive break with the past which can be summed up in [end p35] a word “confidence” . It is the confidence of achievement that has replaced doubt.
The cycle of failure has been broken by the people of the North East.
For when a people believe in themselves all things become possible. [end p36]
As they say on the Tyne: ‘Gan on, me canny lads’. Mr. Chairman, your health and theirs.