My Lords, Ladies and Gentlemen.
The honour of being here is mine. I am absolutely delighted and honoured that you asked me to present these Export Awards, the fifth export occasion organised by the Cumbrian Newspapers, whom I congratulate on their marvellous idea both for stimulating exports and stimulating business in this very important County, which is never forgotten.
I would like, on behalf of the guests, to express our appreciation for this occasion and for the hospitality which we have received. [end p1]
The essential point about today is this, if a nation is to prosper it is essential that we not only have enterprise but that that effort is rewarded and that those efforts are publicly applauded and we publicly say how much we value the success of exports.
That is what today is for, not only that you continue on your successful way but we say how valuable it is not only to the locality but to the whole of our country that you continue to succeed.
Over the past seven years, as you know, we have grown quite strongly in our industry and commerce in this country and indeed growth has averaged a higher rate than it has in previous years. That has been a tremendous fillip to us all because at one time I wondered whether the great spirit of enterprise which built this nation was still present in our country and now we know that it is and that it is flourishing and we know that British industry is being profitable and that its productivity continues.
It does continue, but not quite fast enough. I always, as a Prime Minister, will say: “Yes you are doing well, but please do better” , just exactly what every Managing Director says to his people.
But the challenge is this. Many years ago when I came into politics we were falling behind our new successful competitors in Europe and I used to go to seminars and see bar charts and all of the latest kind of chart that we are treated to these days [end p2] which showed that countries like Germany and France were getting ahead of us in output per head and the gap was widening. This I found very very depressing indeed, but the most depressing of all was the fact that somehow that seemed to be accepted and that others would go ahead and that we would decline.
Some of us never accepted it and tried to get policies that once again would encourage the enterprise by the incentives we could give, by getting Government out of business. I constantly say to the audience which I sometimes address of businessmen: “There are not many people in Governments who know how to run business and if they did they would be out there doing it” .
So it is not really for governments to try to run business because they make decisions which are not the right decisions for a flourishing business. And so we tried to get Government out of business and to try to do its fundamental job of running the finances of the nation well and creating the general framework of law and regulation within which business could operate and also to try to run a taxation system which gave incentives to companies that made profits. So we dropped the taxation on companies, and to give incentives to all people, from the most senior to the most junior in a firm, that the harder they worked the more they would be able in fact to keep for themselves. [end p3]
Well now that system in fact worked, that incentive policy worked, and the manufacturing industry is much much more efficient than it was and we have begun to close the gap, which is what pleases me, we have begun to close the gap that had opened up between Germany and France and ourselves. Our productivity has for a time, for the last six or seven years, been going up faster than theirs, productivity per person, so we have begun to close the gap.
Not sufficiently yet. Germany and France are still ahead of us in output per person and this year they are coming up quite fast which gives us a new challenge. Because again as I go, on your behalf, to the European Summits and start to talk to my fellow Heads of Government and I say to them: “Now look, tell me, how are your unit labour costs?” —believe you me, Heads of Government do talk to one another that way sometimes. And what I have noticed in Europe is that their unit labour costs are coming down and unfortunately this year ours are going up.
That is why you will hear politicians say: “Look, at a time, especially when we have got inflation, at a time when other countries” growth is coming up to ours, it is absolutely vital that when you consider wage increases you must be certain that the productivity increase is larger than the wage increase, otherwise our costs will go up, the orders will go elsewhere and so will the jobs.” [end p4]
Of course it is not only costs, I need hardly tell you that, you would not be here with these marvellous Export Awards today unless you also knew the importance of design, of service, of quality, of attending to the needs of the customer. Of course you need all that, also you need the essential value for money and at the moment the problem is to see that we continue to close the gap because it is my ambition that productivity per head in this country will overtake that of any other country in the Community.
Of course, as you know, we are now part of the European Community and one of the reasons we went into the European Community was to be able to sell to a much larger market. It does not mean that every small business has to sell to 320 million people, of course they do not, they target their particular niche in the market as small businesses always have done. Specialist businesses target their particular niche in the market, as they always have done, but they will have a bigger overall market in which to sell.
But the competition is going to be very tough and we went in believing that we could compete. At the moment, as you know, we have the problem of inflation which means that we have actually paid ourselves more than the goods we have produced and we have to take the necessary steps to get it down because otherwise it would grow like a cancer and we should be in real difficulty. [end p5]
So yes, there will be some of those among you who say: “Look, Mrs Thatcher, interest rates are too high” , and I will have to say: “Until we have got inflation down, they will have to be too high, because so often you have to look at what is the lesser of two evils and inflation would be the worse of the evils, particularly when some of our competitors have managed to keep their costs and inflation down more than we have” .
So we have in fact to tackle that problem and tackle it we shall and when it is well and truly tackled the interest rates will come down. But not until. So please do not let me give any false optimism today on any account.
Now may I turn to exports? May I also say that people who export very successfully are often people who also sell very well in this country successfully because it is in the world's markets that we are operating. But it is by our exports that we judge what our goods are like compared with those of other countries. And the record on exports really is very good indeed.
Last year we exported, and I am going to take the manufacturing figures and give you figures without the oil exports. Last year we exported £108 billion. Well, the figures do not mean very much unless you get it per head—£2,000 per head for each person was exported from this country. Now that is pretty good, it is pretty good standing on its own. [end p6]
In the last three months visible exports, that is the manufacturing without the commercial and without the oil, were 9 percent higher in real terms than a year ago. So visible exports, manufacturing exports in the last three months, 9 percent higher than a year ago. So a lot of you have been selling very hard and very successfully overseas.
Unfortunately the record on imports has gone ahead even faster than that, as often happens when you have got a high rate of growth, it has gone a bit too fast, the difference is taken up on imports of two characters: first, an increase in imports of consumer goods, particularly of cars; but secondly an increase in investment equipment. [end p7]
In a way, that is good because it means that you are sufficiently confident that growth will continue, you know that you have got a very very much lesser profits tax—corporation tax—than you used to have and so if you make a good profit there is a good return on the extra investment and you are planning to continue investment into the future. That is good and inevitably, in the highly specialised engineering world in which we live, quite a bit of the equipment will have to come from overseas and it is. I wish I could say that we had a better export in investment equipment—that is one of things in which we will have to get back in the future. When we lost a good deal of the car industry overseas, we also lost a good deal of our engineering equipment and we shall have to get that back in the future. [end p8]
But so far, the exports are going up well; imports going up too fast, but we want more successful people like those whom we in fact have here today and I would like at this stage to turn round and congratulate our winners once again:
The larger company, which does all the packaging work—the metal packaging work—which was put in, as you said, for the first time; the smaller company which Mr. Chapman started up on his own in the true British way and has become very successful; and the Lilliput Company which I think has won an award three times out of five.
These things did not just happen. One has to have a fantastic amount of commitment to succeed in the export world. If you need extra help, we can supply it from the British Overseas Trade Board and I hope those of you who do travel abroad on exports will be the first to pay tribute to the work our embassies are doing in trying to spot where the orders come from and in trying to help in every single way they can. So many congratulations to those who have won and also to many of those who are also doing well but who will win perhaps in the future.
We know that the commitment required is not only from the top—it is also required from every single one of your workforce, from the most senior to the most junior—and I would be grateful if you would also thank them on our behalf because exporting is not a side-line in any way—it is the mainstream of many businesses. [end p9]
I would also like to say that there are many other companies in your area which are doing very well indeed. May I just mention one or two:
During the last year, British Nuclear Fuels, whose major reprocessing operations are based at Sellafield which I know well, secured record overseas business of £169 million. Well over half of this was from Japan and the company is one of Britain's biggest yen earners and contracts worth over 500 billion yen—or £2.5 billion—are the contracts that company won. Two-thirds of the business for the first ten years of its operation is with overseas customers.
I would also like to mention British Steel. I cannot come to this part of the world without mentioning British Steel! British Steel Track Products at Workington, who in June this year secured their largest ever export order—a £12 million contract … (gap in tape)
… . Developments, one of Cumbria's high-tech firms beat off the competition to supply the state of the art communications system used by sports commentators at the Seoul Olympics—another very great success.
Acrostyle of Ulverston, who make electrical control gear, Burlington Slate Ltd. from Kirby and Furness, and Duraflex Chairs Ltd. from Maryport. [end p10]
Now I shall be in acute difficulty if you represent a company that I have not mentioned! (laughter) but will you please see that your name gets into the Cumbrian Newspapers.
May I thank you most earnestly for the tremendous effort you are making. May I spur you on to greater efforts in export and in import substitution because we want to get back to be competitive on cost as well as on every other factor, so that the problem we have now may soon cease and Europe may know again that we are a formidable competitor for that market of 320 million because we can succeed and I believe that we shall in a few years time come up to the level of France and then Germany.
May I thank our hosts, the Cumbrian Newspaper Group, for their enterprise in arranging this event. May I thank them for their service to the community in this part of the world and also in some respects across the border and once again congratulate today's winners who have made such a great contribution to our export success (applause).