Speeches, etc.

Margaret Thatcher

Speech in Chelmsford

Document type: Speeches, interviews, etc.
Venue: Chelmsford, Kent
Source: Thatcher Archive: transcript
Editorial comments:
Importance ranking: Major
Word count: 3887
Themes: Civil liberties, Commonwealth (South Africa), Conservatism, Defence (general), Defence (Falklands), Employment, Industry, General Elections, Monetary policy, Privatized & state industries, Pay, Public spending & borrowing, European Union (general), Economic, monetary & political union, Foreign policy (Africa), Foreign policy (USA), Foreign policy (USSR & successor states), Foreign policy (Western Europe - non-EU), Health policy, Labour Party & socialism, Liberal & Social Democratic Parties, Media, Trade union law reform, Strikes & other union action

Mr Chairman, Simon, thank you for coming out in such splendid numbers today to support the Conservative cause and to return Simon Burns with an increased majority to represent you in the next Parliament at Westminster.

Now there are several things I would like to say. There is so much I scarcely know where to start. But I think the first point that I wish to make is this. We as a party have a record that none of the other parties can begin to rival. When we took over in 1979 Britain was in decline as an economy, she was full of strikes, it was known that we were accepting decline, she had little reputation among the countries of the world and altogether we took over a country that was but a ghost of its great past. And people were talking about it being ungovernable. That's what we took over. From there to here we have turned as a Conservative Government, that country into one whose standards have been raised in the eyes of the world, which does not follow the rest of the world, but leads in many many of its decisions. Which has tackled many of the fundamental economic problems from its industrial problems, its trade union problems, its enterprise problems and, in fact, the reputation of our country rides high in the eyes of the world. That was the achievement of Conservative Government and it would never have happened with either a [end p1] Labour Government or a Liberal Government.

Yes, come on clap, aren't you pleased about that?

I might just gently remind you when the Socialists got in with a tiny majority and when that majority ran out I must remind you that the Liberals kept the Socialists in office. And the only choice at this coming election is either a Conservative Government with a majority good enough to raise confidence in the eyes of the world, or a Socialist Labour Government consisting of the Labour Party and the Liberals which would be Socialist. So let there be no doubt about that.

Some of them now seem to try to give the impression that they agree with some of the things we did. But when we were doing them they fought us tooth and nail the whole way. Just may I remind you of the taxation position we took over? It was a standard rate of tax, 33 pence in the £, standard. It was a top rate of tax on earnings, 83 pence in the £. It was a top rate of tax on savings 98 pence in the £. No wonder people saw but little incentive to work harder, or to save harder, or to invest. That was how we had to take over and sort out the finances of our country. Now let me then deal with how we did it, the finances, the industrial success, and then have a look at the consequences we had on defence and also on the other things on foreign affairs and on Europe in the world.

Now, as I see people appearing on television, they all have smart suits and smiles and they all say they are going to put up the expenditure on whatever the commentator asks them as the subject of the question. Is it the Health Service? Yes, yes, it's under-funded, it needs more. Is it Education? Yes, yes, it's under-funded, it needs more. Is it Pensions? Yes, yes, it's under-funded, it needs more. Is it Child Benefit? Yes, yes, it's under-funded, they need more. It's YOUR money. It's your money. That's how they got the taxation so high the last time and when the taxation wasn't high enough that's how they borrowed and borrowed and borrowed until the rest of the world wouldn't lend them any more money for those policies and that's when they had to go to the IMF.

May I tell you as someone who has had to preside over the finances of this country for a very long time? You have to learn to say NO to extra demands for expenditure, or to coin [end p2] a phrase you have to say NO, NO, NO, or to coin a double phrase, you have to go ON, AND ON AND ON SAYING NO, NO NO. Because there are far too many people who think that democracy consists of keeping your seats by promising people in one constituency expenditure on the taxation of another. It doesn't. Success depends on determining how much expenditure you can afford. What are your priorities. Having a small contingency reserve and when that is gone you say NO, if we are to keep sound we hold our public expenditure and then we get down our borrowing. And that, Ladies and Gentlemen, is what we did. And it's not by giving in to every demand. That is weakness. Strength consists in having sound financial policies, constraining your public expenditure. And what is unusual about that? You do it at home. You do it in a small business. You do it in a big business. And if you didn't you'd go broke and that is what happened with the last Labour Government. It went broke. It had to go to the IMF.

And now I see signs of giving the impression that all they have to do is say, ‘Yes’, and the money will appear.

And the same with the Liberals. The only money that would appear under those circumstances would not be money we earned, it would be money which could only be borrowed at an enormously high rate of interest and the last thing industry and mortgage-holders need at the moment is a higher rate of interest. They need a lower rate of interest. Although there would be an alternative that they had in fact promised to spend so much that they printed the money and you get inflation back.

So my first point is this. We had sound financial policies. We held our public expenditure. May I give you a specific example? We were very very tough when we got in, in not giving extra public expenditure although when you have a recession the expenditure rises, and the income doesn't. So we were in difficulty anyway. So we weren't able to give extra public expenditure. We had to hold it down. By the time we got to 1982 we had got it under control and we got a Contingency Reserve, you always have a Reserve for unexpected things. Unexpectedly the Falklands happened. Now by that time also we had got our defences up. So we were able, being a Government with a clear majority, to say quite quickly, “The tyrant shall not have his way. We will go down and get those Islands back. They are the Queen's territory and the people want to stay British.” [end p3]

So there was extra expenditure. Couldn't possibly have been foreseen. But being a sound Government we had kept other public expenditure within limits. We had kept our borrowing within limits and we had a Contingency Reserve. And I remember when they said in Parliament where are you going to get the money from? I said we have been so sound that we can do it out of our Contingency Reserve. The unexpected happened and we were able to fight and win that whole campaign brilliantly within the sound finances that by that time we had got in hand.

Now which do you think deserves the greater commendation? Someone who is so profligate that they hand out money and get you into difficulty or someone that is tough and sound and gets the finances in good repair and is able because of that reason to meet the unexpected? I suggest to you that we were right. Government in fact must have sound finances. There is no room now in the immediate future for extra public expenditure.

It is part of my pride that towards the end of the eleven and a half years, so sound had we been on public spending, that we didn't have to borrow a penny piece for four years in order to meet our outgoings. Indeed we were able to do what many families and many companies do, we were able to think of the future, we were able to save for the future. And every single company in the land, if it thinks of the future, has to make enough profits this year to provide investment for the next. What we did, in my last four years, we actually had a Budget surplus although by that time we got taxation right down to 40 pence in the £ for both earned income and savings income and a 25 pence standard rate, we were in fact able to have a surplus from that rate of tax and that surplus went to paying off the debt created by past generations.

Now that was sound Conservative Government. It was sound not only that way in finance. It was sound in other ways. Let me tell you the second way in which it was sound. We knew that the wealth of a country is not created by smiles and promises. It is not created by Governments. Its created by the efforts of countless individuals and companies who want to improve their lot and build up a better future for their children or create a bigger and bigger company with greater and greater success. It is that which creates the enterprise. It is the enterprise which creates the wealth. How did we get it? It was a matter of principle with us. It was what we believed. We believed in this initiative. We believed [end p4] in this enterprise. So, having started to get down the taxation, the next thing we had to do to free-up enterprise was in fact to cut away many many controls. Now we did it on principle because controls stop enterprise. The principles in fact worked out.

When we came in you couldn't decide how much you paid your people. Oh no, that was decided by Government, there was an incomes policy.

You couldn't decided on prices, Oh no, that was decided by Government. There was no sort of competition policy. And competition is what keeps prices down. Not Governments.

You couldn't decide how much you paid to those who lent you capital. No, no there was a dividend policy.

You couldn't decide precisely where you set up your factory because after you got planning permission you had to get a Development Certificate. And in fact management couldn't manage and some of our best people went overseas.

So those controls had to go. And very successful it was. And we do not want them coming back now in the guise of a Socialist Charter. In the guise of a Socialist Charter from Socialist Delors and a totally non-elected, non-accountable Commission. The John MajorPrime Minister was absolutely right to keep that out. Do you know why some people want to saddle, put it on us? Because in some other countries they have got their costs on employers so high. Germany in particular. They have piled on so many costs on employers, much higher National Insurance Contributions, Child Allowances, and so on. So high that they fear they might not be able to compete with us and they want to saddle us with those costs.

We have different ways of doing things. We do not have a minimum wage. Because if you do you get all the differentials throughout the place and up go your costs. We say something different. We say if you haven't enough after working on which to keep your family, we add to it from the tax-payer Family Credit so you can keep them in decency and keep them in a way in which you'd expect. That doesn't add to industrial costs. Its a much better way and we do not want the Commission dictating to us by a majority vote about [end p5] what we should have. We got rid of those controls. I might put it more vividly. Our example even in the end led Russia to get rid of hers. It was called a Politburo and we don't want it back in a different guise.

So. Sound finance. Get the controls off to release the enterprise so people can make their own decisions. And they have done it very very well indeed. Those were two things. But there was a third thing.

The fact was, first, the Trade Union law was totally out of balance as between employer and employee. Totally out of balance as between the ordinary member of the Trade Union and his Trade Union boss. What is more, many many Communists, realising they would never succeed in standing for Parliament, have made their way on these strange Trade Union laws to the top of their Trade Union. And they were using those laws for all they were worth against the interests of a free enterprise economy and against the interests of their own members. Because you don't strike your way to success, you work your way to success. And so we had to change that. Step by step. And we did so. And we did so so that it enabled employers to resist totally unwarranted strikes because we stopped secondary strikes. We stopped blacking. And we did so because we believe in the spirit and decency of the overwhelming majority of the people in Britain. That given a chance they did not want to go on strike they wanted to do an honest day's work for an honest day's pay and stay at work.

And so, just before the third of those acts came in, the inevitable happened. The Scargill miners—not all of them—went on strike. And we fought that strike. Did we get any help from Mr Kinnock? Oh, no. He appeared by the side of Mr Scargill at the Durham Miners' Gala. No. We had to fight that, because we believed what we were doing was right. And because our faith in many of the people who work in industry was abundantly upheld as the working miners went to work day after day and the police upheld their right to do so. We would never have won that strike without having the right principles, without having the right assessment of the British character, without having the right policies and the guts to see it through. [end p6]

And so enterprise began to be restored and we began to grow faster than ever before. Do you believe that Labour would ever have introduced those polices? Do you believe the Liberals would have had the guts to introduce them? Guts? No. Smiles, niceness yes. But guts no. We did this and those who now suggest that they would have agreed with some of it weren't there when it came to be counted to get Britain up to the standard that she has achieved in the world and to make the rest of the world respect her.

And so it is Socialism that is falling the world over. And just when it is falling the world over-and wasn't it a good result in France recently?-just when its falling the world over we don't want it back here, and the world doesn't expect it back here in any of its guises, full-blooded or wet. Any of them, any of them at all.

That was the first point. Always takes longer than the others.

Let me turn to the second point. Having in fact restored the reputation of our country, because you don't have any reputation in foreign affairs councils unless people can see that you have the will to tackle your own problems in your own country. Having done that, within our public expenditure programme, we took a look at the world situation, which again when we came back in, it was We who were fighting Communism, we who are very strong members of NATO, we who are upholding the nuclear deterrent, because we knew that it was weakness which tempts an aggressor, it is strength that keeps him away. We had decided, also along with President Reagan, that the defence expenditure had got down too low and the first thing to do was to show the Communist world, it was strictly divided across the line, that however much they may wish to extend their view world-wide, and they did, they would never succeed in doing it militarily because we would stop them. So they needn't threaten. They needn't threaten one country after another. We would stop them. And when the critical decision was when President Reagan said he would go for SDI. The press called it Star Wars. In fact it was the age-old thing that the free societies will get the highest, bestest technology, long before the tyrannies can ever get it because we have freedom of discussion. And they will keep us ahead technologically. A decision that was abundantly seen, the advantage of which was abundantly seen in the Gulf War. And so we restored our military strength and then we went to tackle this Communist creed, this Socialist creed, because they are two sides of the same coin, and fight the battle of ideas. [end p7]

In addition to strengthening the military aspect, we also tackled the Communist countries about human rights whenever we met them. Why is it that under your Communist/Socialist creed you don't have freedom of speech? You don't have freedom of worship. You don't have freedom to take your own job. You don't have freedom to elect your own members. You don't have freedom to move out of your country. You don't have freedom to move in your country. And so gradually we tackled them on things we would regard fundamental liberties.

Gradually we tackled the world over on private property. Because, you will know, there is something you will notice in countries where there are no property rights. There are no human rights, because people are never allowed the independence, never allowed the property to build up their independence to stand up against a Government. And so part of our task here was to spread property as widely as we possibly could in this country, and then we fought the battle of ideas in the Communist countries, and we also decided in this country to look to see who would be likely to be the next group of leaders in the Soviet Union. We thought somewhere some time some younger people must come to power. And the rest you know, as Mr Gorbachev came here and saw, as people do when they come to a free country for the first time, the kind of prosperity, dignity and liberty that a free society and a free economy can produce.

And so Britain wasn't right back in the countries in carrying out this policy; the fact was we were in the forefront in dealing with the East European bloc and the Soviet Union. The fact was that we and America have been the greatest alliance for liberty the world has ever known. It was we in fact who stood up to the tyrant in Europe, defeated half Europe and rescued the other half. And that alliance has in fact been the salvation of Europe and must be kept alive into the next century.

All this is the record of twelve years of Conservative Government. A record that would never have come about without us. All of the principles upon which we acted are as valid now as they were then. The sound finance, the policies to create wealth, the strong defence, the fighting the battle of ideas, not only in East/West, but also we in fact stopped sanctions from being imposed upon South Africa, which wouldn't have helped any of her people to come through to the democracy they are now within reach. Time after time we had to fight for [end p8] all of these things.

Now, the future. The same principles then are valid. Firmness in public spending. Keep your borrowing as low as you can. And if you want the interest rate down the best hope of doing it lies in two things. One: a good sound Conservative majority on April 9th so the world knows that we have a strong Conservative Government with the same principles. There are many many decisions being held up, awaiting for that result. There are many many people withholding their judgment, waiting to see whether we are returned, and I would venture to suggest that if we are, there would be such a return of confidence in the world over that we should get Sterling rising again sufficient to enable us then to reduce the interest rates which would be the very best news. People are waiting in industry, in big business and small business, and those who hold mortgages as well. Then we shall get the continuation of the wealth-creating policies, the reasonable levels of taxation we now have, and we hope as more wealth is created we should in fact be able to reduce those because there is one very interesting thing: the best, most enterprising, richest countries in the world are not those who have the biggest proportion of public expenditure—after all Russia had the biggest of the lot—Sweden had a very big one, and she's chucked out her Socialists at last. They brought it low, they are like the United States, which has a much lower proportion of public expenditure, and also Japan. So we are on good ground if we want wealth-creating policies.

Now, let me deal with one other argument. It is suggested that somehow you can say yes to every demand and distribute wealth without it ever having been created. That's an old Socialist doctrine. Promise everything and never [break in tape] standard of living, they have left enough over for a very much higher standard of social services. I see Tony Newton over there. Why don't you come over here? He's our Minister for National Insurance. He knows from the many improvements that we have made that at the same time as we got down taxation actually more wealth was created and we were able to do more in his Department.

But the focus has been on the Health Service. Well, I don't flinch from the Health Service. Now, I am not going to give you statistics. I am going to give you facts. Facts are easier to digest than percentages or money. The essence of success in the Health Services is how [end p9] many more patients can you treat. Let me give you the facts.

1979–6 million patients were treated in the Health Service.

1990–91, the latest available figures, 7.5 million patients were treated in the Health Service. 1.5 million more than twelve years ago. That is a record of which we should be proud. It couldn't have been done. It required extra resources. It also required better management because, as all of you know, it is not only the money you put in, it is how much value you get out of the money. And that requires very good management and that extra 1.5 million patients a year shows what happened under people who didn't spend all their time saying we care but spent the time creating the wealth to do the job. And that was Conservative Government.

The main operations that we usually require, that are in greatest demand, for older people tend to be hips, cataracts and heart disease of a coronary by-pass.

1979, these are facts, operations for hips 29,000. 1990: 44,000.

Cataracts: something which people really do need, just as much as they need hips, but it makes an enormous difference. 39,000 in 1979. In 1990, what do you think I am going to say? 94,000 cases. [Applause].

Coronary by-pass: 3,100 in 1979. 1990: 14,500.

This is by a party that doesn't spend all its time talking but spends all its time doing. And so, my friends, these self same principles, we wish to continue to do the work up to the end of the century that they have done in the past twelve years.

Yes, there is sound finance. Keeping inflation down so that the money you put in at your grandson's christening will buy the same amount of goods when he comes to spend it at his coming of age. What a different world it would be. [end p10]

Passing property to the future, not a one generation society but constantly thinking about the future so that young people had something to look forward to from their grandparents and have a better start than we did.

Policies which create wealth, policies of low taxation, low controls but a framework of law within which industry can operate.

Policies of strong defence. Policies which stand four-square by the great Anglo-American alliance. And if America ever goes out of Europe, the peace of Europe will not be as secure as it is now.

Policies which mean that we co-operate with other countries in Europe but we do not lose our sovereignty which has been the salvation of those very European countries.

Those are the policies which we must continue. Those are the policies which we must highlight during these coming ten days. I don't know what has happened to the easy interviews that some of the leading politicians get these days and the way they are allowed to get away without answering the questions. I don't know, when they had me there, they made it tough. And you had whole audiences and you each had to go before a whole audience and answer questions. Each one of you. Separately, because you don't want to turn it into entertainment but you want to show yourself. I don't see that happening now. You had very very tough commentators and they showed you up if you ran away from the question. I think we should have very tough comments. I am sure that Mr Major would sweep the field and the others would be shown for what they are.

And so, my friends, as I go about people say to me more often than any other phrase… They say, and in doing it they are saying it to the Conservative Party, “Thank you for what you have done for our country.”

I hope that the news on April 10th will be that those great things which we have done for our country by having faith in the unbroken spirit of its people will be able to continue up to and beyond the end of this century.[Standing ovation].