John Major – 1995 Speech to British Retail Consortium

Below is the transcript of John Major’s speech to the British Retail Consortium on 24th January 1995.

President, Chairman, Ladies, Gentlemen.

Napoleon once referred to the British as a “Nation of Shopkeepers”. Today the Retail Consortium would rightly take that as a compliment. At the time, the British army didn’t.

And Napoleon was left to reflect on St Helena on the wisdom of his remark. He had plenty of time and not much to do. There were no superstores there and precious few shops. No wonder Napoleon tried to escape. He failed – so he was able to consider at leisure the merits of both the British Army and the British retail trade.

Whatever the merits of retailing then, no one doubts today it has undergone a revolution. The variety and diversity of goods in our shops has expanded beyond all belief.

In our supermarket are green beans from Kenya, lemon grass from Thailand, asparagus from Peru and starfruit and ortaniques from Morocco. Ortaniques. And once we used to think bananas were exotic!

And in the high street, are small specialist shops, selling socks or ties or Belgian chocolates. The idea of a viable consumer market for shops like these would have seemed incredible even a few years ago.

Has any peacetime activity had a more dramatic effect on our lives in the twentieth century than retailing? Personally I doubt it.

It used to be so very different. As GK Chesterton – who belonged to the Napoleon School of Charm – wrote:

“God made the wicked grocer

For a mystery and a sign

That men might shun the awful shops

And go to inns to dine”.

Rather unflattering – and totally out of date. Today, Chesterton would be tucking into pre-prepared haute cuisine from the chill cabinet, washed down the chateau bottled supermarket wine.

ECONOMY

I know, for many of you, the going has been tough in recent years. The economic and competitive pressures have been intense. But the prospects ahead are now enticing. The economic recovery is established, is virtuous and offers the opportunity to build sustained growth into the next century.

Over the last year manufacturing has grown 5%, with productivity up over 6% and unit wage costs falling. There’s been more good news from the CBI survey only today. We hear so much claptrap about British manufacturing from people who don’t understand how it’s changing – how good its prospects are. In fact it’s once again playing a key role in the economy.

And that feeds through to exports. Exports are leading this recovery and how refreshing that is. Up 13% on last year, with our first trade surplus since 1987. We’re net exporters of machine tools, TV sets, pharmaceuticals. British Steel are now one of the UK’s top ten exporters. Shorts in Belfast doubled their aerospace exports last year. British exports to China rose an astonishing 43% last year. We even have a current account surplus with Japan.

With growth at 4% last year, the British economy is growing faster than any other big European country. Every year we’re seeing the international economic forecasts updated in Britain’s favour. They said we’d grow faster in 1993. We did. They said we’d do it again in 1994. We did. Now, they predict we’ll grow faster than all our main European competitors this year too. So we will. From 1994 to the end of 1996 we expect to have grown by 10%. Who’d have predicted that two years ago?

This hasn’t happened by accident. It’s happened because sixteen years of supply side reforms have revolutionised the attitude and performance of British industry. And because the decisions taken over the last few difficult years –unpopular though they have been – were aimed at ensuring a recovery that would last.

Inflation has now been below 3% for 15 months running – a record not achieved for 30 years. Of course it will fluctuate. But the underlying level is still the lowest for a generation. And we intend to keep it low.

Tax cuts there will be. We are instinctively a tax cutting party. Every improvement in the PSBR brings that day closer. But we will only cut taxes when it is prudent to do so, and not before.

ECONOMY AND RETAILING

I know that my bullish assessment of our economic prospects is not yet reflected in every part of the retail sector –especially those which depend on a buoyant housing market. But the overall picture shows retail sales at record levels – up on last year and well above the last peak in 1990.

But consumers are more careful and cautious today. This recovery isn’t coming in a rush. The evidence suggests that the biggest dampener on consumer spending isn’t taxes or take home pay but the fear of unemployment. President: if so, that should soon change. Because unemployment in Britain has been falling for two years – last month’s fall was one of the biggest since records began. It’s falling in all regions. Vacancies are at their highest levels for over four years. The prospects for jobs are good. Over 70% of new jobs are now full-time. So there is good reason for consumer confidence to return more strongly.

COMPETITIVENESS:

Let me turn to two aspects of competitiveness: one in your control, one in the Government’s.

First, quality and supporting local firms. In the 1970s, people turned to German or Japanese goods because British goods were often seen as unreliable or shoddy. But that has changed.

The best retailers have long known this: now others are joining in. Your Consortium – with DTI and the Textile Confederation – are encouraging greater UK sourcing of clothing, textiles and footwear. Of course, retailers want to offer their customers a world wide choice. But, where it makes sense, they’re buying British.

This is not just about national preference. It’s about enlightened self-interest. Increasingly “British” has quality stamped right through the product. And increasingly, quality is selling Britain right around the world.

DEREGULATION

So, better local sourcing to build on quality is something you can do for yourselves. Deregulation is an area where I can help you.

I am committed to cutting red tape. Of course we must protect consumers. But over-regulation is deeply damaging. It costs profits, investment, efficiency and jobs.

We have already made significant progress. Last year we reformed the law on Sunday trading. We have legislated to relax outdated rules on late night shopping and to enable children to go with their parents into suitable hostelries. In the last budget Ken Clarke announced our plans to simplify VAT rules to help up to 600,000 small businesses with their cash flow.

One area that particularly concerns me is the plight of smaller businesses. Over seven million people – 35% of the workforce outside Government – work in businesses with fewer than twenty employees.This is where the new jobs will come from. So we mustn’t strangle business – especially small business – in red tape. Otherwise over-protected consumers may become unemployed workers.

We’re tackling three aspects of this problem.

First, over-fussy regulation. I know that nothing makes businessmen’s blood boil more easily. That dreadful phrase “It’s more than my job’s worth” is the inevitable prelude to over regulation.

The new Deregulation Act has given us new powers to ensure that rules are enforced fairly and consistently. We intend to make good use of them.

So we’re reviewing all laws affecting business, to bring them into line with three key principles.

– Businesses should have the basic right to a clear, written explanation of what action an enforcement official wants them to take. A retailer told to renew his floor or his tiles should be able to ask why; whether it’s just the enforcer’s whim or whether it’s the law; and whether his competitors are having to do the same.

– Businesses should also have the right to put their point of view to enforcement officials before action is taken –unless it’s a genuine emergency.

– And in future there will be a new model appeal system to hear the merits of the case. We’re working on that right now and will be consulting business about it.

The result should be a radical shift in power. The onus will be on the enforcer to avoid excessive action; not on the business which has to count the cost.

Second, we will continue to sweep away unnecessary regulation.

The Deregulation Act will give us new and quicker ways to cut red tape without requiring full-scale legislation. We have long needed this power – and we mean to use it. We’re earmarked fifty-five measures already. We shall be bringing the first batch to Parliament very soon.

We’ll be scrapping bureaucratic controls over a wide area. Cutting back paperwork that burdens building societies and the insurance industry. In future, you’ll be glad to hear, the Transport Secretary will no longer have to approve parking control equipment. We’ll also be changing absurd rules – like those on greyhound betting. At the moment there’s one rule for horses and another for dogs. In future, you’ll be able to bet through the tote on the greyhound derby at Wimbledon, even if you’re enjoying an evening at the track at Hove. At present, for some daft reason, you can’t.

And we’ll be cutting back on the excessive information businesses have to provide in areas like consumer credit. Of course we’ll protect consumers, but too much paper confuses everyone and it’s a burden on small business in particular.

Deregulation helps business. But it also makes life simpler for everyone. We will simplify licensing procedures for community buildings, like village halls. We mean to combine licence applications and reduce inspection visits. This should be a real help to local groups like Women’s Institutes, charities and playgroups.

We have been looking at the rules on how charities can invest their money. Clearly charities must act wisely and prudently. But the present law came into force thirty years ago. I can tell you tonight that Michael Howard will shortly act to increase the proportion of money charities can invest in equities from the present 50% limit, to 75%. On the charities’ own figures, this simple change could boost their income by up to 200 million pounds a year.

These measures are early steps. I hope you’ll go on helping us identify others: that’s a genuine invitation.

I can announce one further measure tonight. The present law on sales of liquor on Sunday is absurd. Why can people buy liquor in a shop at noon but not at 11.30; or in a pub at 3.00 o’clock in the afternoon but not 4.00 o’clock? Now we have Sunday trading there is no logic in these regulations. They are old fashioned, out of date, patronising, Government-knows-best restrictions. And they should go.

So we propose as soon as we can to sweep them away, and replace them with simple and sensible laws. Supermarkets will be able to sell liquor throughout the six hours they may open on Sundays. Smaller off-licences will be able to trade from 10.00 in the morning to 10.30 at night. And the compulsory afternoon break on Sundays, when pubs now have to close from 3.00 o’clock to 7.00 o’clock, will be abolished – though the licensing magistrates will be able to re-impose the break if local circumstances make that necessary.

Thirdly, as we sweep away out-dated rules here, we must make sure that new rules don’t flood in to replace them. Not least from Europe. That’s why we continue to oppose the European Social Chapter, which all other political parties are committed to introduce in Britain. I’m sure they are sincere but I’m also sure they’re wrong. They are arguing for more regulation. For a minimum wage. I believe both would cost jobs. I want jobs. So we won’t have Social Chapter regulation and we won’t have a minimum wage.

I do not believe many people realise just how damaging the Social Chapter could be for this country. Before I secured our opt-out we had seen the harm that could be done by attempts to bring in costly social legislation. The attempt to impose rigid hours of work on all employees across the Community in the Working Time Directive. Or the original version of the Parental Leave Directive – which would have imposed costs of over a billion pounds on UK business every single year.

The Social Chapter could open the floodgate to a new tidal wave of damaging and unnecessary legislation. The European Union shouldn’t decide rules on redundancy payments. They should be decided here. The European Union shouldn’t lay down rules on workplace creche facilities. They should be decided here. The European Union shouldn’t decide terms and conditions of employment for part time workers. They, too, should be decided here.

It is vital to our competitiveness and jobs that Britain remains outside the Social Chapter. Our opt-out is not negotiable. So far as I’m concerned we’re out and we’re staying out.

PLANNING

President, deregulation affects the whole climate in which you work – you need the assurance that Government will not overburden you with red tape. You also need a clear framework for planning where to put your business. Where to expand.

We will shortly be responding to the Select Committee’s report on shopping centres and their future. But let me make two things clear now:

– New development is necessary. I know it’s often controversial. But we can’t treat our towns and villages as museums of the past:

– So our policy is not to smother investment – in either town or country. We have introduced tougher tests for out-of-town development. But we haven’t padlocked the gate to every new, green field site.

As so often in Government, we have to balance competing interests. The consumer wanting choice and access. Retailers – large and small – who must remains competitive. The attractions for many of large scale shopping. But the need, too, to keep our high streets and town centres vital places both to live and work in.

Survival was never achieved by standing still. Town centres themselves must adapt – whatever their size. We all have an interest in meeting this challenge: Government, local authorities; and not least you, the retailers.

One hundred town centre management projects are already under way. I warmly welcome the involvement of a number of you present here this evening – Boots, Marks & Spencer and others – who have been pioneers in this field.

The age of the motor car has forced many changes on rural areas in particular. We need innovative ideas to help improve choice for country communities which have lost the village shop and for people without cars, particularly the elderly. Can we make better use of new technology in these areas? Can retailers think of better ways to provide transport to shops?

This year, the Government will be publishing a White Paper on rural issues. There is, I know, a concern amongst those who live and work in the countryside that our thinking is dominated by urban considerations. It isn’t. To prove that, the White Paper must set out a coherent view of the relationship we expect between towns and cities and the countryside. It must take account of changing economic circumstances as well as the need to preserve and enhance the beautiful parts of our country. I intend the White Paper to set out a policy which will last well into the next century, so it is very important that everyone contributes to the debate. I hope the British Retail Consortium will put their ideas to John Gummer and William Waldegrave who are taking this forward.

CRIME

Lastly, I want to say a few words about crime.

We know how devastating crime can be for the victim. What is not so well known are the economic consequences. This is a vital issue for your members. Crime costs retailers some 2.5 billion pounds every year. Or to put it another way: retailers’ profits would increase by over 20% if crime could be eliminated.

When we think about retail crime, instinctively we think of pilfering and petty shoplifting. They are bad enough. But alas, too often nowadays we are seeing crimes of quite a different order. Arrogant gangs of intimidating youths on organised shoplifting sprees. Ram-raiders who drive their trucks through shop windows. And not least, a number of appalling crimes of violence against your staff.

You have already launched the Retail Crime Initiative. We will continue to work in partnership with you – retailers, local authorities and the police – to establish effective crime prevention schemes.

First, we need to get planners and local authorities to think more carefully about town centre designs. We need better liaison between police and retailers to share intelligence. Paging and ring round schemes to give early warning and quick response. Radio links between retailers, private security firms and the police. Local crime prevention panels and security committees. There’s a lot going on. But we need more.

Second, I believe we’ve got to get more closed circuit TV schemes in city centres. These schemes have huge potential in the fight against retail crime.

Already, about 250 schemes are up and running or planned:

– In Airdrie, CCTV in the city centre cut crime by 73% in six months;

– In King’s Lynn, car thefts fell by over 90%;

– In Newcastle and North Shields, crime levels were cut by 20%. And business insurance premiums fell too.

Crime prevention makes excellent commercial sense. Yet only about a fifth of retailers join in crime prevention schemes. A recent survey suggested that a further half of all retailers would like to get involved. I believe we must involve them in schemes like business watch and City Centre TV. And quickly.

Third, we have to challenge the attitudes that accept crime as a way of life and effectively punish the criminal.

We’ve given the courts the power to pass long prison sentences for serious crimes: up to life imprisonment for robbery and serious violence, including violence against retail staff. Burglary and theft can also carry substantial prison sentences. We’re acting to tackle persistent juvenile offenders can be dealt with more effectively. Stiff sentencing not only keeps the criminal out of circulation, but clearly demonstrates society’s abhorrence and intolerance of crime.

These changes have all been put in place. They take time to work but they amount to a comprehensive change in our attitude to the criminal. We will continue to look at what further initiatives may be necessary.

President, I have always admired the way the retail industry contributes to the community as a whole. The extent to which you take part in voluntary activities – nationally and locally. Charities, sport, help for the needy and disadvantaged.

Retailing is above all a local activity. And your long term interests have always been intertwined with the interests of the local communities. So I welcome the way in which retailers are becoming increasingly involved in social projects which tackle crime at its roots. It is important for you and it is vital for our society that we help young people to discover that there be better alternatives to crime. You can help to put this message across.

President, you said in your introduction that retailing is a British success story. I agree. After nearly two hundred years, we are still a “nation of shopkeepers”. We take pride in that. So let’s ensure that in the years to come, we can still take pride in that. Getting that depends on a healthy and flexible economy and a stable and secure society. Tonight I have set out some ways in which we can work together to achieve this. My task above all is to keep the economic framework sound. To avoid the bad old days of boom and bust. I pledge to do so.