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Below is the text of Sir John Major’s speech at the Singapore at 50 Conference held at the Shangri-La Hotel in Singapore on 3 July 2015.

It is now over 40 years since I first came to Singapore as a young Banker, and frequent visits since then have kept me abreast of the remarkable way in which it has developed.

It has been an extraordinary evolution since independence, and especially since Singapore broke free of its relationship with Malaysia.

It is sad that Lee Kuan Yew – such a magisterial figure in your history – is not here for your 50th Anniversary, but I’m delighted to share a platform with his successor – my good friend and colleague of many years, Goh Chok Tong.

In this session we are looking at some of the new challenges faced by democratic governments. In the brief time available to us, I can only skim over the surface, but I hope to say enough to provoke debate.

First, some context. We live in a new age, in which electors demand openness, freedom of information, and a swift response to public concerns. They are not remotely passive; they react swiftly and sharply to policies they dislike – sometimes even when they know those very policies are in the long-term interests of the country.  

This points up a structural change – in politics and government. As individuals become more assertive, it is far more difficult for the political parties that form governments to obtain – and then retain – support.

Partisan allegiance to political philosophies is fading in many countries and, as unquestioning philosophical support falls away, governments must rely on popular and successful policies to retain support.

In principle, this is excellent – thoroughly democratic – but it has a downside: success may take a long time, and holding on to public affection can drive government to short-term policies. This is the antithesis of what Singapore has always done – and an unwelcome trend.

An even bigger problem is that market forces are becoming more powerful and national governments less so. This is the effect of a truly global market. Globalisation has implications for domestic governments.

If a country is to compete in our global economy, external rules and regulations may have to be adopted; every nation’s currency becomes more sensitive to events – sometimes events on the far side of the world; inward investment must be attracted in the face of global competition; the price of essentials to everyday life – food, energy – may rise or fall as a result of external factors. All this is unsettling.

And international agreements can demand unpopular action in a Nation State – on climate change, for example. Singapore illustrates this: as a low lying island State, Singapore needs sensible policies on global warming from nearby States: notably China, India and Indonesia. But such policies are often unpopular in those countries.

We could all extend this list in our world of inter-dependence. The plain truth is that – more now than in the past – governments are not in control of events – but are driven by them. Sometimes, election promises – made in good faith – have to be abandoned for reasons outside any national government’s control.

All this can make for an uncomfortable democratic legitimacy. And it will not get any easier in the future.

These dilemmas arise from a world changing faster than we have known. They leave governments struggling to keep up with new challenges – both domestically and in the wider world. They are expected to understand events, then analyse, and respond to them, but with the 24 hour professional media – they are rarely given much time to do so.

This dilemma is more difficult for democracy than autocracy. Autocracy can make decisions and implement them speedily.  Democracy is slow, often painstaking, because it has to obtain consensus and agreement.

This may be less efficient management, but it is what the majority of public opinion demands. In the longer-term, democracy – the imposition of public will – is bound to prevail in any country that has fair elections.

It is 25 years since Sir Tim Berners-Lee set out an idea at Cern that developed into the World Wide Web: it has changed our world. Moreover, it is largely uncontrolled by government – and, probably, uncontrollable in a free society.

The Web continues to develop in a manner that is bound to influence and change government. It is casting a light on how people think and what they do in their professional and personal lives. We know more about one another – our fears, our hopes, our quirks – than ever before.

The Web influences behaviour – for good or ill. It can offer truth or lies. It affects what people do. It might encourage some to take up charity work – or seduce others to become suicide bombers for an extremist sect, as it recently has a boy from Dewsbury in England.

It can post, as one foolish man has done, security information that puts governments at risk and lives in peril. Almost nothing is off limits. People react to peer pressure, and the Web enhances that pressure.

We can’t dis-invent the Web – nor should we wish to do so: it is a magnificent invention. The question for government is: can its misuse be controlled, and can it be used to improve the quality of life?

I believe it can – but controlling misuse begs the question: what is misuse? It can’t be misuse simply by embarrassing governments – but it must be misuse where it aids illegality and crime: governments cannot ignore that.

The plain truth is that social media has added a new dimension to the opportunities and pitfalls of government. It can either help or hinder. It can help because a direct form of communication can aid government in understanding public needs and attitudes and responding to them.

This is a valuable tool that governments have barely begun to explore – let alone implement. They should do so.

But it has a negative side, too. Social media can whip up opposition to decisions that are demonstrably necessary – but may be unpopular in the short-term: it is a medium that can force democratic politicians into an ill-thought-out response, or one that is, frankly, wrong.

It can put enormous pressure on governments for an early decision, and pre-frame public attitudes before facts are fully explored – or explained. This is a truly negative development for good governance.

We saw the power of social media in the Arab Spring. It supported and encouraged uprisings that brought down autocratic governments and dismissed long-term despots but – in the absence of order – left behind chaos that continues to destabilise countries across the Middle East.

Good government requires tolerance and understanding by Governors and Governed alike and, at the moment, that is not available in many countries. As it settles down – it is, at present, in its infancy – social media can enhance tolerance or inspire chaos:  hopefully, it will be the former.

And, of course, it has highlighted the growing problem of terrorism which poses some acute dilemmas for democratic governments.

Last year, there were over 13,000 terrorist attacks around the world – mostly in the Middle East, North Africa and South Asia. No other region had more than 1,000 incidents – but many countries were affected, and yet more will be.

As this happens, it will create a friction between measures to protect the citizen – and measures to uphold civil rights. There is a delicate balance here.

Secondary problems arise also for countries with no domestic terrorist threat – most obviously the problems of displaced persons and massive migration. No country dare be complacent.

To many people in Singapore, the problems of the Middle East, of Syria and Iraq, may seem far away, but the ugly truth is that they are influencing jihadist groups worldwide.

Nationals from the Philippines and Indonesia appear to be fighting in the Middle East. There are Maoist insurgents in Sri Lanka and jihadis in Pakistan and India. There are Muslim militants in Southern Thailand. The point is simple: no country is immune.

Even Singapore – although serious counter-terrorism plans are in place – has had impressionable youths radicalised by Islamic State.

A big question lies in front of government: how can they harness each aspect of modern technology – to improve governance and make life easier for the citizen.

Some answers are obvious: technology and digital tools can target and deliver services better. They can improve access to services, ensure better traffic control and parking, be better informed on shortcomings to be corrected.

All this is already being implemented in many parts of the world. “Smart” cities surely lie ahead – with digital advances enhancing urban living, using energy efficiently and engaging more actively with citizens. The scope here is obviously long-term – but almost infinite.

One aspect of modern technology – cheap and easy communications – is already affecting human behaviour. I come from the age of the quill pen – but even I have come across Google Hangouts, Skype, Facetime, which can bring people together from every part of the world: on one level, this is a benevolent development that increases familiarity and can reduce or remove tensions.

This is excellent – but again has risks attached to it: it can also be used to oppose, to frustrate, to magnify difficulties – all of which can complicate the exercise of government. And it can – indeed, is – being used to radicalise young minds.

But I am optimistic that long-term advantages can outweigh short-term problems. Governments can use technology – and especially the Internet – to improve governance. The technological uses are frankly too wide and pervasive to mention here – except to note that they exist and are increasingly being implemented across the world.

In nearly every aspect of our lives, technology can improve both business efficiency and services, although we have not yet remotely explored all the options.

But we do know that the internet and social media is a valuable tool to obtain clarity about what electorates need and want.

It can improve education enormously, and thus national economic wellbeing. The scope here – for young and old alike – is huge. The best lecturers – and minds – in the world can be available to everyone.

This raises a mischievous question: in fifty years’ time, will we need universities? I hope so – believe so – but know others who take a different view!

The internet can disseminate and receive information. “We didn’t know” – as an excuse for inaction by government or individuals – is on its way to becoming obsolete.

It can cherry pick best practice from across the world.

And, as it extracts information, it can spot trends – to plan policy for the future.

One worry for government is whether social media can undermine or diminish them. The answer to that is that it can – and will – unless and until government becomes sufficiently familiar with it to regard it as an ally and not as a threat. Then it can – and, I believe, will – be a worthwhile ally.

Let me summarise: in brief, social media will change the nature of government in ways we have not yet begun to realise. On the credit side, the information tools at its command will give government the ability and knowledge to target its policies more accurately, more inexpensively and more productively. It can help deliver better and more efficient government.

Conversely, government will be under greater pressure to succeed, to be in touch, to reflect the public will. I suspect the impact of all these changes will be to make government more complex, and the public more demanding.

One last question arises: why has Singapore – a small island State – been so successful in a world of many nations of greater size and with more resources?

There are many reasons. But, at their heart, it is because Singapore has always judged what is in Singapore’s interest and acted with determination to implement it.

Singapore looks to the future more rigorously than any nation I know. She has leveraged every opportunity to remain ahead of the curve: this conference illustrates that perfectly: each session celebrating fifty years of independence is geared to look to the future.

That is why Singapore has succeeded in the past; and – I believe – why you will continue to succeed in the future.

Below is the text of Sir John Major’s speech at the Hinton Lecture held in London on 10 November 2015. The speech was entitled “A Nation at Ease With Itself”.

I met Nick Hinton, but only briefly, so cannot claim to have known him. I wish I had. But this lecture, named in his honour, enables me to talk about what life is like for the poor and the near poor: and how civil society – together with Government – can help improve their quality of life. It is, I hope, a theme that would have appealed to him.

Twenty five years ago, at the door of Downing Street, I set out my ambition for “a nation at ease with itself”. At the heart of this was my wish to tackle inequality.

That day I had the power, but the economy was failing and there was no money. By the time the economy was mended and I had the money, I lost the power.

Even so, the solution is not only money. Education is the high road out of poverty. I began to implement reforms that were at first discontinued by my successors, then reinstated and carried so much further.

I broke the binary link between universities and polytechnics – a divide that, to me, reeked of class distinction.

I introduced a Citizen’s Charter to improve the standard of public services and make it more personal. Since people paid for them, in advance, through their taxes, I believed they deserved the same quality of service as if they had paid in cash. Often, it seemed to me, the poorest – perhaps cowed by authority – didn’t receive this.

But these and other measures could not arrest the powerful forces that were – and are – driving inequality and so, overall, I failed.

With age comes reflection, and I have begun to reflect more and more on inequality. Sixty years ago, my family’s circumstances were not easy. But in a country now immensely more wealthy, life is still not easy for many others.

Let me first state what is obvious but often ignored: there is a gap between what our nations need in social provision and what the taxpayer can afford.

Rich as we are, our nation isn’t rich enough to rescue all those left behind while, at the same time, it has to meet the soaring social costs of a population that is living longer and growing in number.

For a long time, civil society has bridged much of this gap – helped, in recent years, by tax reliefs to encourage giving, and State funding to carry out statutory social work.

But, inevitably, there are gaps, and I wish to set out how we might bridge them – and why we must.

The why is easy: as a country, we are one of the richest in the world – and yet some of our communities are among the poorest in all Northern Europe.

Even in areas that are recognised as wealthy, there are families or individuals who have fallen behind.

And, in communities where traditional jobs have gone, too many are on low incomes – or no income at all. A minority can move elsewhere to find work. But the majority can’t: not through disinclination, but because – even if they have sufficient savings – it is tough to uproot to find a job and a home. For the penniless, or for those with families, or who act as carers, it can – literally – be impossible.

Policy-makers must understand how hard it is to escape from such circumstances. It is not inertia that keeps the unemployed immobile: it is simply that, without help, they are trapped.

And let us cast aside a common misconception. Everyone out of work is not an idler. Everyone in receipt of benefits is not a scrounger. Of course idlers and scroungers exist – and Governments are entirely right to root out the cheats who rip off the taxpayer. But the focus must not be only on those who abuse the system; we need equal concentration on those who are failed by the system.

Although borderline poverty is far less than it was, it is still more than it should be. And it cannot be ended by benefits alone. Where benefits are necessary – and they always will be – we should never begrudge them. But they are a palliative, not a cure. The cure, in areas left behind, is more jobs that pay a living wage.

We can raise living standards: we have been doing so for decades. At the turn of the 20th Century, millions struggled to eat. In London, one in three lived below the poverty line; in York, one in four ate less well than the wretches in the poor house.

Over the decades, mass poverty has shrunk back. The quality of life has risen across all income groups – but much less evenly than is healthy. Politicians and charities and churches and the free market can all take a mini-bow for what has been achieved. But there is no cause for complacency: a hard core of relative poverty still remains.

Among the many attractive qualities of the British is an enduring belief in fairness. As Colonel Rainsborough observed in the Putney Debates over 250 years ago: “… the poorest he that is in England has a life to live, as [has] the greatest he…”. So had he then, and so has he now. The Colonel was a Leveller – I am a Conservative. But, upon this, we agree. We may never achieve a perfect society, but we can surely create a fairer one.

To do so, we need to level the playing field. We are not all born equal: the raw ingredients of an impoverished life often start in childhood. Many are fit. Able. Intelligent. Lucky.

Others are not.

Many are vulnerable. Unequipped with skills. Trapped by circumstance. Often old. Perhaps sick or disabled. For them, a comfortable life seems a fantasy. Often the week lasts longer than the money.

I have never forgotten living in such circumstances. There is no security. No peace of mind. The pain of every day is the fear of what might happen tomorrow. It is terrifying – and it never leaves you.

In our society, we see poverty as a social evil – which, of course, it is: but it is far more than that. It is an economic evil. It wastes talent. It destroys ambition. It lowers national output. It cuts competitiveness. It creates dependency. It leaves families in despair and communities in decline.

And inequality – poverty amid plenty – is corrosive. It alienates and breeds resentment. It undermines national cohesion. The human spirit can endure great hardship: but inequality gives it a bitter edge.

Poverty isn’t only about empty pockets. The poorest among us not only live meaner lives – but shorter lives. In some of our great cities – Glasgow and Westminster among them – the lifespan of the poorest is twenty years shorter than that of the most wealthy. I have no doubt that much of this disparity is caused by poor lifestyle, poor choices, poor diet – but poor environment, poor housing and poor education must surely be contributory factors. Whatever the reasons, this is a shocking situation in 2015.

Some think the solution is easy. Penalise the rich. Cut defence, overseas aid, industrial support and much else. Then, borrow more and spend more. But this just doesn’t work. It is simplistic and naïve.

The arguments against such an approach are so comprehensive, so compelling, I won’t waste any time on them, except to note they are a recipe for ruin. Easy promises, with no hard policy in place to support them, are unsustainable – and those who claim otherwise are simply posturing.

And that is of no help to the poor. Good intentions don’t fill empty bellies, or provide shelter for the homeless, or jobs for the unemployed. What does help is national wealth – created by financial, commercial and industrial success. The richer we are as a nation, the more we can do. If the Good Samaritan is in debt, he can be of no help to others. That is why the repair of our national finances – which is clearly a Government responsibility – is the essential pre-requisite to ending poverty.

So – as the Rowntree and Fry families taught us so many years ago – are better living conditions. Housing is a huge driver of inequality. If house prices rise, so do rents. We need to stop stimulating demand and squeezing supply. This will require strong political willpower, but is absolutely necessary.

We have too few homes for a population that is growing. That’s a bad mix. Not only does it leave too many poorly housed, but a shortage of houses puts property prices up – and beyond the capacity of the young. Would-be home owners are frustrated, and – more relevant to my focus this evening – so are those whose aspiration is not necessarily for ownership, but simply for somewhere decent to live.

So, although they are controversial, I warmly welcome the Prime Minister’s plans to accelerate low-cost building, ease planning on brown-field sites, and speed up our inefficient (and costly) planning system.

And surely it is right to bring unfit and neglected properties back into use: and where they are wilfully left empty for years, to use compulsory powers so that local authorities or the private sector can renovate them.

If we are to make up the shortfall in housing – and make social mobility a reality, and not an aspiration – then plans must include social housing and a vibrant private rented sector. Owner-occupation is an ambition for most, but not all – and we need homes for those for whom ownership is not an option.

I bow to no-one in my affection for the green belt, for our wonderful woodlands, moorlands and wide open spaces. We protect them for all to enjoy, and I hope we always will. But, as we do so, we cannot regard every piece of open land as sacrosanct, when so many are living in sub-standard housing, and there is a growing shortage of single-person accommodation.

Here we have a paradox. Although few deny we need more homes, many oppose new building. Sometimes their opposition is justified – but not always. We must decide to whom we listen: opponents of more housing, or those who hope – and deserve – a home of their own.

Job creation is crucial too: over recent years, we have seen surprisingly high employment growth, but often not enough in areas that have fallen behind. To correct this, we need continuing investment in better information technology, in roads, in airport capacity, in rail investment. And, as North Sea Oil fades, we need to accept fracking, so that on-shore energy can make us more self-sufficient – and competitive.

Much of this is underway, but many of these schemes are unpopular.

Some will instinctively oppose all of them. I do understand this. But such critics must understand there is a link between investment and jobs and well-being: if our infrastructure is not upgraded, we will condemn many to remain poor – now, and in the future. It cannot be right to deny the homeless or jobless the hope that better times are ahead.

*******

There are many things that make me proud of our country – but none more so than the scale of philanthropic, voluntary and charitable work that is the daily labour of many in every corner of the UK. Volunteers and the faith community can be proud of what they have done. We should all be proud of our open-heartedness: over 180,000 Charities, one million Trustees, and countless voluntary workers is incontrovertible evidence that the British soul and conscience is in good working order.

But – a reality check: we cannot be complacent about our charitable sector. There are negatives: we have all seen the publicity generated by bad fundraising practices and poor governance. I won’t dwell on these shortcomings, except to note that all charities have a duty to protect their reputation. Unless they are seen as efficient and well run, donations will fall away. Giving is not a given.

History tells us donations collapsed when the Fabians argued that social care was the – presumably sole – responsibility of the State.

In 1948, when the NHS was formed, 90% of the public told opinion polls there would no longer be any need for charity. The act of giving also falls when taxes are too onerous: as a former Lord Mayor of London put it: “much as I would like to give … The Government has taken all my money.”

This may seem perverse – but politicians should be careful not to claim too much success in meeting social need: if they do, they may cut off the voluntary impulse without which we would all be poorer.

Charitable activity has a long and proud history in our country. The 1601 Statute of Charitable Uses – together with its contemporary Statute for the Relief of the Poor – were intended to encourage the rich to supplement contributions from rate and tax payers. They have done so ever since. Had they not, our social conditions would be incomparably worse.

The House of Commons Library tells me the UK now has over 100 Sterling billionaires, and many thousands of millionaires. Is this growing wealth a source of additional funding? Almost certainly – whether it be lifetime giving, lifetime loans or legacies. I need not elaborate – fundraisers are well aware of the opportunities of tapping into rising wealth.

The role of charities has long been one of the glories of our way of life. They promote human nature at its best … care of the very sick; the terminally ill; research into cures; help for those with learning or physical disabilities … the list is both magnificent and almost unending. Our society would be very bleak indeed without them.

And charities can be innovative.

Take the Prince’s Charity, which has done so much to regenerate deprived areas. It has been the catalyst in bringing together a range of charitable organisations to work with both the public and private sectors. This approach was pioneered in Burnley in 2007, and has since spread to Burslem, Middlesbrough and Tottenham.

An independent evaluation by Dr Peter Grant of Cass Business School reports that this has been a hugely successful partnership. The pioneer of the programme, Burnley, was named in 2013 as the most enterprising place in the UK by the Department of Business, Innovation and Skills. During the past year, they have had the largest percentage increase in private sector jobs in the UK. Surely this form of approach could be more widely developed?

“Give us the tools,” pleaded Churchill, in a moment of national crisis, “and we will finish the job”. In our lesser crisis of helping the poorest among us, one essential tool is money: it is the root of much progress.

As Chancellor, in 1990, I sought to accelerate charitable income by introducing Gift Aid: since then, this tax change has generated £13.5 billion in additional revenue for charities, and is the gift that keeps on giving – at over £1 billion a year.

In the late 1980s – as Social Security Minister, with responsibility for the Disabled, and then Chief Secretary to the Treasury, responsible for the allocation of the public purse – I saw raw need, often unmet. I realised it was impossible for even the best causes to compete for public money against the demands of pensions, health, education, social security and defence.

So, as Prime Minister, my solution was the Lottery – money from the public … for the public, and – to protect the independence of charities – from a source other than the State. It was controversial.

Some denounced it for promoting gambling. The Church was restless, but underwent a miraculous conversion that enabled many a leaking church roof to be mended. The Treasury was conflicted. Officials realised that the Lottery would ease demands for public money – and approved. But equally, they knew it would be out of their control – and disapproved. Even worse, the Lottery promoted fun – which the community of killjoys absolutely hated.

The critics are silent now. As of today, the Lottery has distributed over £34 billion to good causes: nearly £8 billion to charities alone, and the balance to other causes – sports, the arts, heritage – that enhance the lives of everyone and, most importantly to me, those who have little else.

And, as intended, most of this money has gone to small local schemes: to village halls, arts centres, playgrounds for children, parks and open spaces, sports equipment, and instruments for orchestras and bands.

I admit to paternal affection for the Lottery, but worry for its future. It was designed as a National Lottery – in effect, a monopoly – to maximise returns for the designated good causes. But its success has attracted rivals. In recent years, so-called “Umbrella” society lotteries have emerged, that have circumvented the original legislation, and pay a far smaller proportion of their income back to worthy causes.

“Betting on lottery” operators have also expanded, blurring the line between lotteries and gambling. If these rivals grow or multiply in number, they will threaten the future of the National Lottery.

Charities should all be concerned about this.

In a nation at ease with itself, business, too, has a role. Of course, its main purpose is to make profits – but, as it does so, it can do more for social development than paying taxes and creating jobs.

In a recent visit to Liverpool, I learned that local building companies – Carillion were one – were actively seeking out former Servicemen and women, the long-term unemployed, the homeless and ex-offenders.

They are employing them and teaching them skills from which they can benefit for the rest of their lives. It is an idea that should be adopted more widely.

Business can – and does – help charities. I am the Chairman of The Queen Elizabeth Diamond Jubilee Trust, set up to provide a legacy for Her Majesty’s many years as our Monarch.

The Trust is seeking to end forms of avoidable blindness across the nations of the Commonwealth and our principal private sector supporter has been Standard Chartered Bank. Other Banks have dedicated departments advising on philanthropy. Many private sector companies sponsor named charities each year, or contribute to them, or collect for them among their employees. Some newly rich private sector benefactors are proving to be enormously generous: this, I believe, is an area that can and should grow dramatically.

Their contribution is in stark contrast to the activities of pay-day lenders that offer loans at extortionate rates of 1500% or more. They are not helping the poor: they are helping themselves at the expense of the poor. That’s not a free market, it’s an exploitative market. And morally reprehensible.

Let me offer some closing thoughts:

During my preparations for this evening, I have sought the views of many specialists on the work of civil society.

Some suggested that we have too many charities, and that it would be less wasteful, more efficient, and minimise duplication of effort, if they merged.

There is a logic to that suggestion – but I have reservations about how desirable it is. The urge to set up a charity is surely driven by the heart, not the head, and I would be disinclined to discourage that. In any case, I fancy small charities dip into a different pool for funding – and it would be folly to lose their enthusiasm. In my experience, they also offer small, anonymous acts of kindness, vital to the recipient, that may be overlooked by their larger brethren.

Others – with an eye to the reputation of charities – have argued there is a strong case for charities to make a sound business case before they are formally registered. This I do agree with.

As a general principle, I am not an admirer of regulators. I am therefore surprised to have reached the conclusion that we would be wise to expand the remit, and the funding, of the Charity Commissioners.

I believe, in so doing, we can improve the chance of eliminating malpractice and scandals in a charity sector that has an annual income of nearly £70 billion. I see advantages in the Commission engaging with more charities and encouraging “friendly” mergers. They could act as a catalyst for change by encouraging charities to become transformative as well as palliative. If this is beyond their remit and resources now, then we need to change their remit and increase their resources.

Today, I have no power and no public money at my disposal, but I care no less now than I did then. I also have a voice which – by and large – the poor don’t.

And I wish to say – 25 years on – that we are still not a nation at ease with itself. Much has been done – is being done – to ease inequality, but we can do so much more.

As the world becomes richer, inequality becomes less tolerable, and the case for reducing it more urgent. A crusade to widen prosperity more equally will not only ease hardship, it will build our national wealth – and health.

I grew up in a community that had very little. I have been lucky, very lucky. But not everyone is. And it is for us – all of us – upon whose lives good fortune has shone, to do whatever we can, big or small, to ensure it shines on others, too.

If you think this is a fanciful notion – and that nothing you can do will make a difference – think of Burnley. Think of Carillion in Liverpool.

Think of those left behind. And you will realise that much can be done if the will is there.

We have a choice. We can leave it all to Government – or we can all contribute, and ease inequality more comprehensively and more swiftly.

It is up to us. It is our choice and I, for one, am clear about what that choice should be.

Below is the text of Sir John Major’s speech marking the 20th anniversary of the Downing Street Declaration. The speech was made in Dublin, Ireland, on Wednesday 11th December 2013.

It’s always a pleasure for me to come to Dublin – a city of which I have very fond memories, in a country for which I have great affection.  

Eighteen years ago, I was here to discuss a key piece of architecture in the Peace Process – the Joint Framework Document. That evening, in the margins of my discussions with John Bruton, Norma and I went to the National Concert Hall with John and Finola to catch the second half of Handel’s Messiah.  

On arrival, we received an overwhelmingly warm reception from the audience: This, I am sure, was due to John’s popularity, but it reinforced my determination to end the friction that had bedevilled Anglo-Irish relations for too long. That night is one of the most treasured memories of my years in Office and it’s good, yet again, to be back here in Dublin.

Twenty five years ago it would have seemed improbable – to some inconceivable – that a former British Prime Minister would be invited to celebrate the anniversary of a political agreement that was a staging post in making the UK and Ireland more contented neighbours than at any time in their long and tortuous history.

Yet it is so – and British and Irish alike can now focus on our present and future relationship instead of all the disputes, conflicts, rights and wrongs of the past that poisoned it for so long. It’s time to put them behind us. Of course, the past will remain in the memory, but it mustn’t stand in the way of the future.

Britain and Ireland are the closest of neighbours. Our cultures intermingle: we share a taste for Shakespeare and Shaw;  for Milton and Beckett. We enjoy the performances of Judi Dench and Kenneth Branagh; of Maggie Smith and Peter O’Toole.  

Irish citizens with residency qualifications can vote in UK elections. Our trade and investment flows are huge. British exports to Ireland exceed those to India and China collectively or, alternatively, to the whole of Africa –added together: In return, Britain is Ireland’s largest market. We are both members of the EU and share sporting ambitions with the Lions, the Barbarians and in the Ryder Cup. We steal Eoin Morgan, Ed Joyce and Boyd Rankin to play cricket for England, and you send an unending stream of Irish jockeys to ride to victory in our classic races.  

When Ireland faced financial problems, the British Government was swift to help. It is a new (and better) relationship, sealed in May 2011 by the first ever State visit made by a British Monarch to Ireland. And next Spring, President Higgins’ State Visit to England will further enhance our mutual interests.

The gateway to this new partnership is the success of the Peace Process. This had no single architect, no single event, no single hero. Many people, known and unknown, contributed over a long period – including, above all, the men and women of Ireland who became impatient at the delay in resolving the troubles; angry at the senseless violence that marred daily life; and frustrated by the failure to resolve an essentially political dispute. Their voice and actions made the extremists in both camps realise that the Irish people expected something better from them and, in this, both Protestant and Catholic clerics played a vital role.

In December 1993, the Downing Street Declaration set out principles that both the British and Irish Governments were agreed upon: no-one could claim that it’s an easy read. In fact, to let you in on a secret, I did win an award for the Declaration which I failed to share with Albert Reynolds. It was a tin of rhubarb … from the Campaign for Plain English – their annual award for gobbledygook.

But language is important in the land of James Joyce, and the medium was part of the message. The Declaration pointed up agreements, set a direction, and opened up a future that had once seemed impossible to unlock.

“No heroes”, I said, and I shall stick to that. But I want to say something about my counterpart in agreeing the Joint Declaration. Albert Reynolds is not well now, and his illness is a cruel trick of fate for a man who gave so much to break the Gordian knot of Anglo-Irish distrust. Although I’m sad Albert cannot be with us this evening, I’m delighted that Kathleen is here – and it was a real treat for me and Norma to spend some time with the Reynolds family earlier today.  

I like and admire Albert very much. He is – quintessentially – Irish:  most at ease philosophically in the wearing of the Green. One of the most mortifying experiences I endured as Prime Minister was to sit between Albert Reynolds and Dick Spring – both howling like dervishes – at Twickenham in 1994 when Ireland won by a single point [13-12]. In negotiation, Albert fought like that rugby team – fought and fought again for the Irish point of view but, above all, he sought a way to end the bloodshed and open up a new future for the country he loved so much. He came looking for agreement, not an argument, and was prepared to take risks and make concessions to achieve that outcome. The more I saw of him – despite all the hurdles, despite all the frustrations – even the rows! – the more confident I became that we could and would find common ground.

Albert and I were both helped by some remarkable civil servants – most especially Martin Mansergh in Dublin and Roderic Lyne in London: their work behind the scenes – and with one another – was untiring. Paddy Mayhew and Dick Spring were also crucial to the agreement, and I’m delighted to see Dick here this evening. There are, of course, many more names that merit recognition, but time forbids me from mentioning them all. But they knowwho they are and what they did – and that is the most important thing.

Of all nations, the Irish love history – and family. And Albert’s as-yet-unborn great great grandchildren can be proud of their ancestor’s role in building a momentum that gave peace a chance.  

Albert, I see you too rarely, but think of you often: I am proud to call you my friend.   

The agreement reached between the British and Irish Governments was crucial in putting pressure on the violent fringes in both the Unionist and Nationalist communities. It did box them in. It did cut down their support. It didbegin to cut off their financial lifeline. In the eyes of many of their former supporters, they were no longer seen as fighters for a political cause but, instead, as a barrier to peace, responsible for so much misery, so many deaths – often of innocent bystanders, unconnected to any political struggle.

By the early 1990s, a number of instincts were coming together that made a peace process more likely. War weariness was setting in – crucially, even among the Provisionals. Throughout their adult lives they had fought – and achieved nothing towards their cause. Without a political settlement, they foresaw their children and their children’s children facing an equally bleak and violent future.

Public opinion was swinging in the same direction. Moreover, British and Irish membership of the EU was throwing Ministers from London and Dublin closer together in a common cause. Against that background, Albert and I saw opportunities. He knew violence would not change British policy – indeed, it would only serve to harden it.  

I knew that a British policy of no talks until the Provisional IRA gave up their weapons and ended all violence would very likely mean that the dance of death would continue. And that dance seemed unending: 632 deaths from 1987 to 1993 – including Enniskillen, Ballygawley, Warrington, Shankill Road. It’s a roll-call of horror.

But the decision to proceed was not a comfortable one, for either side. Easy – because it was right – but notcomfortable. We both knew that we were taking a risk. We knew we would face opposition and the profound scepticism bred by two decades of stalemate. Many asked: “How can you possibly talk to an active armed militia?”. Many, looking at history instead of changing circumstances, forecast failure.  

Plainly, success depended on the leaders of the IRA engaging in the process. We believed they would, and were prepared to gamble on it. Let me now say something that may surprise you. Throughout the process, I was acutely conscious that IRA leaders were taking a risk, too: if Albert and I upset our supporters we might – as Albert cheerily put it – “be kicked out”. That was true – but the IRA’s supporters were more deadly than our backbench colleagues – and their leaders were taking a risk too – possibly with their own lives.

From the moment the process started, I spent countless hours trying to think myself into the mind and tactics of IRA leaders: what were their aims; their constraints; their motives? What would tempt them into agreement?  

We knew we had to agree objectives between London and Dublin. We had to address grievances and contradictory ambitions. We needed to offer an end-product, and reassure two communities that had different fears and different ambitions.

The Joint Declaration, agreed with Albert Reynolds, did so: it was the beginning of the end of conflict. For the first time, we had a set of principles on which not only the two Governments agreed, but also the leaders of the two largest parties of the day in Northern Ireland, the SDLP and the UUP. Much credit is due to the untiring efforts of John Hume and Jim Molyneux for the courage they showed in lining up with us.  

It was a set of principles strongly supported on both sides of the divide. It demonstrated that there really was an alternative to endless conflict.

The Framework Documents, agreed with John Bruton – who faced great internal opposition but overcame it – carried us forward – and our political successors continued along the same path. I congratulate them warmly upon what they did. In 1998, the Good Friday Agreement condemned the past to history and opened a better prospect for both our countries. Let me now look to that future.

First, a word about Northern Ireland. While the success of the peace process has transformed life there, the task of building a normal society is still work-in-progress. The British and Irish Governments need to continue working together to help Northern Ireland become the tolerant, inclusive, shared society we all wish to see.

For too long the “Northern Ireland Question” was the only agenda item between the UK and Ireland: no longer. Last year, David Cameron and Enda Kenny agreed to a future of intensified co-operation across the whole range of Government business.

Work is progressing with a focus on jobs and growth – both vital for living standards and for the long-term future of both countries. Within a few days, Ireland will be exiting its IMF/EU programme which it has executed with great courage and skill. In her handling of the financial crisis, Ireland has been an example to all of Europe.

It hasn’t been easy – or painless. Tax rises and spending cuts are not abstract economic potions: they hurt people’s lives, and Ireland can be proud of how social cohesion has been maintained and the country prepared for a return to better times.  

But, in a global market, an open economy such as Ireland’s requires more than domestic economic virtue: in particular, it needs its main trading partners – the US, EU and, above all, the UK – to grow as well.

The US, despite her huge debt, is in growth and, despite her much vaunted “pivot to the East” will not neglect her Irish market: both logic and affection bind Ireland and the US together.

The UK, too, is beginning to recover and – I think – may do so faster than expected. For two decades, the swing towards either recession or growth has been greater than forecast, and I believe the present return to growth will out-perform expectations once again. As it does, the Cameron-Kenny agreement will help both economies.

Europe, I fear, will recover more slowly, and its future policy is less clear. Nonetheless, I do not expect the Euro to collapse – it has too much political will behind it for this to happen – but a Eurozone recovery may be slow and muted. One aspect of UK/European policy is, I imagine, of deep concern to Ireland: will the UK remain in the EU following the referendum on membership?

The reasons for Irish concern are potent. Would a UK withdrawal diminish UK/Irish mutual interest and undercut the improved relationship? Would the UK pay less attention to Ireland if the two countries were not working together on EU trade and competitiveness issues? And – above all, perhaps – would the border between the Republic and Northern Ireland harden with new border controls for the movement of goods or people? And, if so, would this unsettle the Catholic community in the North?

These are rational concerns but, I believe, they are phantoms: I do not expect the UK to leave Europe. It is not the moment for a complex explanation of why I take that view but – in brief – departure would hurt, isolate and weaken the UK, and diminish the EU. It’s easy to demonise Brussels. The EU can be irritating and frustrating: believe me, I know! But those in the UK who want us out have never articulated a viable alternative, let alone a better one.  

This is the black hole in their argument – because the truth is that the alternatives would be bleak. As for the EU – it would lose its second-biggest economy; the nation with the longest foreign policy reach; and one of only two member nations with a significant nuclear and military capability. Whilst the rest of the world is binding itself more closely together, if the UK were to leave it would fly in the face of commonsense, self-interest and the drift of history. I cannot believe we would be so foolish.

Let me touch on one further contentious issue where the UK and Ireland must put right an old injustice. Next year is the 100th Anniversary of the beginning of the First World War. That war prompted the suspension of efforts to introduce Home Rule. It was the backdrop to the Easter Rising, its military suppression, and the moves – eventually abandoned – to introduce conscription to Ireland in 1918;  all of which had a profound influence on the course of Irish history once the war ended.

As we mark this Anniversary, we must be prepared to face the past in as open and honest a way as possible, however uncomfortable some of it may be. As Santayana said, 150 years ago, “those who cannot remember the past are condemned to repeat it”. So, in the UK, young people will be at the centre of these commemorations. Our hope is to build an enduring legacy, so that future generations remember the war and how it came about.

In Ireland, the challenge is slightly different.

Your former President, Mary McAleese, who did so much to promote peace in Northern Ireland, called the Irish soldiers of the First World War doubly tragic.They fell victim to a war against oppression in Europe. Then, at home in Ireland, their memory fell victim to a war for independence.

The failure to remember them in Ireland is all the more remarkable when one considers the huge numbers involved. Well over 200,000 Irishmen fought in the British army in the First World War and, of these, some 50,000 were killed.

Those figures mean that most Irish families will have had a grandfather or a great uncle who fought in the war.  It is therefore no surprise that, in these less inhibited times, there is so much interest here in Ireland in finding out more about this lost generation.

Our two governments in Dublin and London are working closely together on the Great War Anniversaries, which form part of a wider decade of commemorations of the events that led to Ireland’s independence.

As emotions have cooled with the passage of time, I am hopeful that these commemorations will provide an opportunity to reflect on the tumultuous events of a century ago in a calmer, less emotive way.

Of course, there is a risk that people of ill will might try to use this opportunity to re-open old wounds and deepen divisions. But we must not let our shared history be hijacked for nefarious purposes when the two Governments are working so closely together in a spirit of historical accuracy, mutual respect, inclusiveness and reconciliation. Twenty years ago, that might not have been possible. But today, thank God, it is.

Conducted in the right way – and the Taoiseach’s and Tanaiste’s presence at Remembrance Ceremonies in Northern Ireland last month were exactly the right way – these commemorations should allow us to honour different traditions, overcome any divisions that remain, and inspire harmony in our future relations.

Let me sum up my message with a quote from that great Irish author, clergyman and satirist, Jonathan Swift:

“A man should never be ashamed to own that he has been in the wrong, which is but saying …. that he is wiser today than yesterday”.

At times in the past we have all been in the wrong. And today, I believe we are wiser than yesterday.  

That is why I have such optimism for the future, and why it gives me such enormous personal pleasure to be here twenty years on from those first steps towards peace. The full fruits of this peace may lie ahead, but the path has been set and, I hope, future generations in Britain and Ireland will enjoy a relationship that – although once thought to be impossible – is now fact.  

Ireland’s relationship with the UK and its future – both North and South – has never looked so bright as it does here this evening.  

Below is the text of Sir John Major’s speech made at the Institute of Directors Annual Dinner on Thursday 28th November 2013.

Many years ago, your Director General, Simon Walker, was a much valued member of my Policy Unit so – when he invited me to join you this evening – I was delighted to accept.

I wish to talk of three events that will shape our future:

– The Referendum on Scottish Independence

– The likely Referendum on our Membership of the European Union

– The General Election

Let me start with Scotland.

Next September, Scotland will vote on whether to break the Union and become an independent State.  Such a vote would cut Scotland loose, and her loss would be felt across the UK. In their campaign, the SNP assert that the Pound Sterling is as much Scotland’s currency as it is England’s; that is true now but not if Scotland left the UK.

Independence means Scotland walking away from the UK and its institutions. This must include the Bank of England, and Sterling.

The whole point of independence is to enable Scotland to take her own decisions – yet she cannot do so if, upon a central economic matter, she has no control over monetary policy and no lender of last resort. That cannot be the Bank of England: the Bank is answerable to the UK Government and Parliament – not any future Scottish Government.

A currency union – which the SNP assume is negotiable – would require the UK to underwrite Scottish debts:  that cannot – will not – happen if Scotland leaves the Union. There can be no halfway house: no quasi-independence underpinned by UK institutions.

Scotland could perhaps – in time – adopt the Euro. But first she must apply to join the EU, where many States would have concerns about the accession of a separatist Member. Spain: how would Spain feel – with breakaway movements in Catalonia and the Basque Country? Spain uses uncertainty over EU membership to deter Catalonia from even holding a referendum on independence. It is hardly likely she would happily wave in Scotland. Spain will not be alone in being wary of separatist tendencies.

And, even if Scotland were to enter, she would discover that within the EU the clout of the smaller population nations is …. small. Time and again, she might regret the loss of automatic British backing. Scottish voters need to know the chilly reality of what is being offered to them.

But what of Britain? It is simply not possible to have a large chunk of the UK break away – without weakening what is left. British influence would fall in Europe, NATO, the UN and all international gatherings.

There would even be some very unpalatable consequences for our nuclear deterrent.  If an independent Scotland ejected it from the Faslane Base – as the SNP have threatened to do – it would be extremely difficult and costly for the Ministry of Defence to replicate it elsewhere.

If Trident were to be dismissed from Faslane, it is likely that the Ministry of Defence would remove from Scotland the whole of the submarine enterprise – including the Royal Navy’s attack submarines and the submarine centre of excellence. Would Faslane survive? One can only guess. But without contracts from the Royal Navy I doubt it.

It is also doubtful the SNP would be able to enter NATO – as they wish – since their opposition to nuclear weapons is inconsistent with membership. Scottish electors must know and understand what independence may cost them.

The SNP’s “ace in the hole” has always been the North Sea Oil and Gas reserves. But their estimate of reserves is twelve times greater than that of the Office of National Statistics. Who is right? I don’t know. But voters may wish to be wary of promises based on false optimism.

Be in no doubt: in politics, commerce and the Armed Forces, Scottish influence is important to Britain. Of course, anti-English sentiment from separatists irritates and enrages – as it is intended to do – but across the UK people know and value Scots as partners, work colleagues, friends and neighbours. It is hard to imagine Scots becoming – “foreigners”. But, if they do, nothing will ever be the same again.

For three hundred years, the Union between Scotland and England has served Britain well. Together, we have become safer, richer, more influential. Surely it is wiser to celebrate what we have achieved together, than to allow grievances – some imagined or exaggerated, others simply manufactured for political purposes – to tear us apart?

The SNP have chosen the ancient anniversary of Bannockburn for their Referendum. Yet a greater anniversary looms. Next year sees the Centenary of the beginning of the Great War, in which the English, Scots, Welsh, and Irish – the whole of the United Kingdom – fought together for freedom – as they would again 25 years later. Many thousands of Scots fought and died in these conflicts. Would it not be a tragedy if – as we honour their sacrifice – we do so as separate nations?

The European Union continues to divide public opinion in the UK. Even where it appeals to our head, it consistently fails to appeal to our heart. We need to sort this out. That is why the Prime Minister is absolutely right to re-negotiate where he can, before holding a referendum on Membership. Let our Sovereign electorate decide: that is the right way to secure Britain’s place in a reformed EU.

Yet, suppose we left:

(i) we would have to negotiate our exit which could cost billions;

(ii) we may have to pay for access to the Single Market: Norway, a non-member, pays 80% as much per capita as we pay as a full member;

(iii) we would lose inward investment – ask Japan or Korea, or even America;

(iv) we would still have to implement EU regulations, yet would have no part in framing them; and

(v) we would be unable to protect the City – or any part of our industry – from harmful legislation.

Of course, we would survive – but there would be a severe price to pay in economic well-being, in jobs, and in international prestige. In a world of 7 billion people, our island would be moving further apart from our closest and largest trading partners, at the very time when they, themselves, are drawing closer together. This makes no sense at all.

Nor would a UK exit make any sense for the EU, which would lose:

(i) one of its biggest economies;

(ii) the long and historic reach of British diplomacy;

(iii) the nation with the most significant military capacity.

The EU would be diminished. The UK would be isolated. I am no starry-eyed Europhile but it would be a lose/lose scenario: a truly dreadful outcome for everyone.

Before the referendum will come negotiations. I believe the British position is far stronger than many believe – not least due to the significant personal alliances the Prime Minister has formed with his European counterparts – though the manner of our negotiation will be key. We need to negotiate with the grain of evolving views across the EU. We need to hoover up the allies that already exist on many issues.  We need to be smart enough not to ask for the impossible.

The route to full federalism for the Eurozone members is banking union; fiscal union and – ultimately – political union. There is no silver bullet to achieve this swiftly, and the Eurozone will edge towards it slowly, uneasily and haphazardly. As they do, they will face many setbacks – not least since full federation across nations is profoundly undemocratic, and public opinion across the Eurozone may well thwart their best laid plans. As for the UK, we have no obligation to join this escalator – even if it begins to move.

After the financial crash – even a “watered down” banking union is proving difficult to agree across the Eurozone. Fiscal Union – once assumed to be inevitable – now looks a long way off as European electors examine its democratic shortcomings. And full political union (the Shangri-La for many) is barely even talked about – except negatively.

Even the Dutch, once core federalists, now shy away from it, and seek reforms. Their Prime Minister says “the EU must become leaner and meaner”. The Germans say “we don’t have to do everything in Brussels”. These are hardly siren calls for a dash towards political union.  Nothing is forever but, for the foreseeable future, “ever-closer union” and “full political union” – expressions that call many Britons to man the barricades – seem very, very far-off indeed.

Unusually, we know the date of the next General Election. We know also the recession is behind us. A brave policy, an unpopular policy, has proved to be right. Our economy is recovering and – although there is no room for complacency – I believe it will swing to growth faster than expected.

As it does, I hope that the electors will remember that, however well-intentioned their motives – however seductive their message – every single Labour Government we have ever had has left behind a ruined economy – the most recent one in spectacular fashion. And David Cameron and George Osborne are the pilots who have weathered that storm. No-one should forget that.

As the economy recovers, policy initiatives will begin to bear fruit: like many millions of others, I have a stake in the next generation and the one beyond that: and I welcome the Government’s long-term reforms for the future.

Opponents may criticise proposals on social policy, education and housing but few can deny that reform is necessary.

And it is not only social problems that need action. Our infrastructure is tired and inadequate. We need more air and sea port capacity.  Upgraded roads.  And, even though private capital has poured billions into our railways, more needs to be done.

And it is no use demanding better infrastructure and housing if we oppose schemes to deliver it. I know some members of the IOD oppose high speed rail. I believe they are wrong. We need more growth in the North if we are to bequeath an economy that enables future generations to thrive. And, unless we wish our children to endure a lower standard of living, we must build more homes.

I was in politics for many years. I can look back and acknowledge my mistakes and urge others not to repeat them. These days, I travel the world but always return home to a country that – taken as a whole – has few, if any, equals in the freedom, liberality and kindliness that are its essential characteristics. We must never lose those qualities: no nation can be great if it is inward-looking and small minded.

For all the frustrations we face, our country offers a way of life that most of the world looks at – and envies. I had hoped to build a country that was at ease with itself. I failed to deliver that. But it can be done … to ensure we live in a country that – whilst striving to be the strongest – has the compassion to care for the weakest.

Political messages can often be coded, imprecise and ambiguous. Not tonight. I am clear that both Scotland and England gain from being joined together in one United Kingdom; clear that the UK is better off in the EU, but not the Eurozone;  and clear that we should not change our economic leadership. If you are finally being hauled out of a deep, dark hole, it’s not wise to let go of those pulling you out.

And – in this gathering – let me add one final thought. We cannot leave everything to Government.

Here, tonight, are representatives of many leading companies. You care about our country, too. You have a stake in its success.  And you have the power – and, I would argue, a moral responsibility – to work towards the future wellbeing, not only of your workforce and shareholders, but of our nation as a whole.

In the North, South, East and West we need growth. To provide jobs. To yield taxes. To build prosperity. To offer hope and opportunity to those who do not, at present, have it.

This requires a unity of purpose. A national unity – in the national interest. And, in that, we all have a part to play.

Below is the text of Sir John Major’s speech held at Chatham House on 14th February 2013. The speech was entitled “The Referendum on Europe : Opportunity or Threat?”.

A short while ago, the prime minister offered the nation a referendum on whether to remain in the European Union – or leave it, and I believe he was right to do so.

As a general principle, I don’t like referenda in a parliamentary system. But this referendum could heal many old sores and have a cleansing effect on politics. It will be healthy to let the electorate re-endorse our membership, or pull us out altogether. At present, we are drifting towards – and possibly through – the European exit. We need a renegotiation – and a referendum endorsement of it, and if that is denied, the clamour for it will only grow.

But it is a gamble – for the country and for the Conservative Party. The relationship with Europe has poisoned British politics for too long, distracted Parliament from other issues, and come close to destroying the Conservative Party. It is time to resolve the matter.

If the referendum were held now, some polls suggest electors may vote to leave. In 2017, their decision may depend upon the outcome of the negotiations, and  success in those might involve repatriation of powers, or opt-outs, or reform of existing policies, or safeguards against unwelcome developments. It will, most likely, be a combination of all these – and perhaps more besides. None of this will be easy. On many issues, there will be no natural meeting of minds.

To what the French call the Anglo-Saxon mind, the case for reform is very strong: unanswerable, even. To many Continental minds, there is a very different perception. The French already believe that  sterling has a competitive advantage over the euro. They now fear that the UK will opt out of social and employment provisions to give our economy a further competitive boost. They will not readily concede that in negotiations. We need to prepare our own proposals without delay, negotiate courteously and with understanding and the manner in which these negotiations are conducted will be vital.

If we enter them without appreciating the position of each of our European partners, we will fail.

If we enter them without engaging with each of our European partners, we will fail.

If we enter them with the aggressive attitude of ‘give us our way or we quit’, we will fail.

We British would regard any such approach from our European partners as a threat, an attempt to bully; and, just as we would take a dim view of that, so would they.

When the end game approaches, the prime minister will need to conduct the negotiations personally – and when he does he will find that more concessions will be won in relaxed, personal face-to-face discussion than in formal talks. But long before that, much preparatory work must be done, and that preparatory work is so substantial it wouldn’t be physically possible for the prime minister himself to do it.

I believe therefore that he should appoint a lead negotiator who sits in the cabinet. And if the Liberal Democrats oppose such an appointment – which is possible, since they oppose a referendum – then the prime minister should over-rule them. On a matter of this national importance, the tail must not wag the dog.

It is essential that this negotiator is seen as the prime minister’s personal emissary. He, or she, must visit and re-visit every European capital to explain our case, seek allies, set out our aims, and – crucially – emphasize the damage to the European Union as a whole if the negotiations fail and the referendum is lost.

The prime minister cannot afford to ignore the home front. He must carry public opinion with him. In Parliament, I have no doubt he will continue to receive unsolicited ‘advice’ about what powers he must repatriate. Some of his colleagues in offering this advice will think it’s helpful, and that our partners will hear the strength of feeling – and immediately capitulate. That is quite wrong. They will not. Such advice – given publicly – will undermine, not strengthen, the prime minister’s negotiating position. And it will do so, because he will be seen to be acting under political duress, rather than principle and conviction  – and his hand will be  correspondingly  weakened. And I know that because I have been there: advice, yes – that is a proper role for parliamentarians – but the truly well-meaning will give that advice in private.

Many colleagues will be instinctively loyal, but not everyone. Rebellion is addictive, and some members may be getting a taste for it. I learned 20 years ago that the parliamentary party includes irreconcilables who are prepared to bring down any government or any prime minister in support of their opposition to the European Union.

Some have softened their views with age. Others have not. The present Parliament contains members whose opposition to the European Union is fundamental.

Members with Conservative heads and UKIP hearts cannot be placated. Whatever is offered to them will be insufficient. They will demand more. They will only be satisfied by withdrawal. It is, therefore, essential for the prime minister to rally the persuadable majority of the parliamentary party.

And if the negotiations fail, and the referendum is lost, we could slip out of the EU in frustration and by default. The prime minister should be prepared for the likelihood that the irreconcilable amongst his parliamentarians, including perhaps some ministers, will campaign for a British withdrawal.

I am neither a Eurosceptic nor a Europhile. As prime minister, I vetoed the appointment of the president of the Commission because the candidate – an able man in every way – held views inimical to our national interest.

At Maastricht, I obtained opt-outs from the Single Currency and the Social Chapter. And I did so by explaining in innumerable private meetings why I could not accept those policies and that, without an opt-out, I would have no choice but to veto the whole treaty.

I judge our membership of the European Union upon one overriding criterion: is it good for Britain?

Is it good for our economic well-being? For competition, and jobs? For our general quality of life? Is it good for our security, our diplomacy and our standing in the world? All of these elements are relevant to the value of our membership. And now, after 40 years, the referendum raises new questions:

• What would it cost us to leave?

• What would we lose if we left?

• And, if we stay, how can we carve out a leadership role?

Firstly, some process. We cannot – legally – simply walk out of the European Union. We are obligated by Treaty to negotiate our exit, and also to meet liabilities that will crystallize at a later date. The costs could be substantial. No-one knows how substantial.

If we left, a swift glance suggests we’d be freed of budgetary contributions, regulations, directives, interminable meetings, unwanted lectures and multiple frustrations. Sounds pretty attractive. But closer examination returns us to the world of realpolitik.

One presumption from those who advocate leaving the European Union is that we could remain in the Single Market of 500 million consumers. That is, probably, true: but there would be a price. Norway – as a non-member – pays two-thirds as much per head for access to the Single Market as the UK pays as a full member of the European Union. We could accept similar terms if outside and that price would be likely to rise with every opt-out we achieve that our partners believe would give us a competitive advantage.

Moreover, trade policy is a European Union prerogative: as a non-member we would have no national trade policy in place, and would need to negotiate our own free trade agreements. At worst, this could take years. At best, we might be able to piggy-back on existing European Union agreements. Either way, we are likely to face tariffs.

And one example, I think, will suffice. At present, we export five out of every six cars made in the United Kingdom but – as a non-member – we may have to pay a 10 per cent external tariff on exports to the European Union, and a 5 per cent tariff on components. And that raises a question: would Nissan, I wonder, and BMW, Honda, Toyota, Ford continue to build at Swindon, Deeside, Dagenham, Bridgend or Oxford – or would they relocate and place future investment inside the European Union with no tariff on their cars? Many livelihoods in the UK depend upon that answer.

And then tariffs are not the only – or even the worst – threat to competitiveness. Most trade barriers are regulatory and – for us to continue to sell in Europe – UK exporters would have to conform to  European regulations. As a non-member, we would have no input into them, but if we wish to export we would have to meet them.

Now, would this hurt us? Certainly. In the crucial area of financial services, we can anticipate that regulations could  – and would – be designed to undermine UK competitiveness. Many would argue that in some areas this is already happening – and I would agree: but, whilst inside the European Union, we can mitigate the worst of the excesses. Outside, we could not.

The European Commission, generally, is very unpopular in the United Kingdom – sometimes, rightly so. It can be insensitive and seem bullying. But we shouldn’t ignore its virtues. In alliance with the Commission, the UK has driven policy on the Single Market for many years. And in the negotiations to come, the European Commission may often be our ally. They know that a Europe without Britain would be more vulnerable to a move towards protection – and they know how damaging that would be.

And then, of course, there is inward investment. Inward investment may also be at risk. Another question: would companies from around the world who invest over £30 billion a year in the United Kingdom be more – or less – likely to do so without unfettered access to the European market? To me, the answer is self-evident, but any doubters should ask those foreign investors – and then reflect upon the half a million jobs those same investors have created in the United Kingdom in the last decade alone.

The impact of a withdrawal goes beyond trade and investment. In a world of global markets, countries are increasingly banding together. It would be a brave decision for Britain to go it alone. I bow to no-one in my pride of our country, but we should see ourselves as others see us. We are 70 million in a world of 7 billion, with countries like China, India, Turkey, Indonesia, Mexico and Russia all rising in economic and political importance. Do we wish to become less relevant in their eyes, or face the future as a leading voice in a block of 500 million people? To leave would be to march against history.

Many of those who wish to withdraw from Europe do so on the assumption that we could enhance our relationship with existing allies: most obviously, the United States and the Commonwealth. They are mistaken.

Economically, the United States looks increasingly to the East, where the market is growing. Politically, every American president I have known wishes to see the United Kingdom at the heart of Europe, because that is what is in America’s own interests. Outside, we would be of far less relevance: we could no longer advance the argument for free trade in Europe or – as recently – help develop sensible rules on data protection, or digital rules that accommodate American counter-terror objectives. Nor could we push for sanctions on Iran – a policy largely driven by the United Kingdom.

So, be certain of this if nothing else: America does not want the UK to cut her ties with Europe. As for the Commonwealth, two facts suffice: we sell more to North Rhine-Westphalia than to India, and more to France and Germany than the whole of the Commonwealth added together. And incidentally, overall, we export four times as much to Europe as we do to the United States.

Being inside the European Union can often be frustrating; but outside, we would be at a serious competitive disadvantage. The tens of thousands of UK companies who trade with the European Union should think long and hard about the consequences of exit. And so should their employees, numbered in millions. To leave would be a jump into a void.

Now of course, the argument with Europe isn’t all one way. The prime minister’s negotiating hand is by no means empty. A British exit would seriously diminish the European Union itself. It would have suffered its greatest reverse. And this reality – well understood by our partners – strengthens our position, but must be deployed with care and sensitivity: clumsily handled, it could be counter-productive.

If we left, Europe would lose one of her biggest economies. Her role as a global power would be diminished. So would her diplomatic reach. Her foremost free marketeer would have gone. Her main bridge with the United States would be broken. The Transatlantic Alliance would weaken. Even now, America, rightly in my view, complains that she contributes disproportionately to European defence: without the United Kingdom, the Continental European contribution – to their own defence in NATO – would be pitiful. Departure might be a leap into a void for Britain, but her loss to Europe would be palpable.

None of the risks of separation mean the status quo is acceptable. Nor does it mean that it cannot be changed. I believe it should be – and I personally believe that it can be. What it does mean is that Britain and Europe must work to accommodate one another with goodwill and tolerance. Tolerance was once a great political virtue, and one that I would love to see restored to the body politic everywhere. With goodwill and tolerance, a deal can be done.

At present, the eurozone is changing its relationship with the rest of the European Union: against that background I see no reason why we should not seek to  do so, too. It’s not anti-European to fight for the British national interest. But we should not over-estimate what can be achieved.

The prime minister can probably deliver safeguards for the City, less regulation, less bureaucracy, no more social legislation, enhancement of the Single Market and more besides. Beyond that, there are many areas ripe for reform, including a full repeal of the Working Time Directive, which a number of countries in Europe would welcome. We should also focus on tackling the democratic deficit and giving real muscle to subsidiarity. And we should do that because reforms that help Europe will also help the United Kingdom.

Other European Union policies – CAP, fisheries, structural funds – are a constant frustration to the United Kingdom. But even if the prime minister were able to gain exemptions from these policies – does anyone imagine hard-pressed farmers and fishermen would welcome the loss of subsidy from Europe and not demand its replacement from the British Treasury? Does anyone assume for a second we would not need to replace the subsidies lost to poorer regions in our own country from our own resources?

We know the answer to those questions: I daresay we could improve on European Union policies, but the net gain would be far more marginal than many people imagine. And whenever we out-competed Europe, they would react to offset our competitive advantage. And how do I know that? Because that is precisely what we did when we put tariffs on Norwegian salmon to protect our own industry in Scotland. As we did, so will they. And in our negotiations, it would be more productive in many areas for us to seek allies to reform core policies for everyone, than just to seek a British exemption from them.

We will also improve the outcome if we take a proactive role in developing future policy: it would be fatal just to sit on the side-lines sniping. Many in Europe, rightly or wrongly, feel that we have lost interest in them: we should make it clear that we have not. We can – and should – carve out a leadership role.

And some will say well – how can this be? Sterling isn’t in the eurozone, nor likely to join. Well nine other nations are not in the euro nor – although some have ambitions – are many likely to be admitted for many years. Denmark has an opt-out; Sweden and the Czech Republic don’t wish to join; others are far less enthusiastic than once they were. And their interests are often our interests. The Eastern Europeans for example were admitted to the European Union because we British – together with Germany – championed enlargement against the opposition of some others. We are a natural ally for their ambitions and for the reforms they seek. President Giscard d’Estaing has said our negotiation, and I quote, ‘opens the way for the indispensable reform of the European machinery’. He is right. There is an opportunity here and we should lead it in the negotiations to come.

We must seek further reform of the budget, where we will have allies in Holland, Denmark and Sweden and, in many areas, would be able to make common cause with Germany.

We should reengage the argument for completion of the Single Market. I’d like to see us advocate the appointment of a Single Market Commissioner to oversee this work across the whole range of services: financial, retail, medical, digital – the list is very long, and the potential gain is very large.

We could seek to interconnect the energy market. We could widen trade agreements. We could try and create a true European venture capital market. There’s no lack of areas where we can seek to lead, and change, and improve European policy.

We should continue to work with France in particular to develop policy on the Middle East and the North African rim. Stability in that region – with its trade and investment potential as well as its proximity to southern Europe – is crucial to Europe, and Britain and France are well-placed to lead policy. We have had successes with action against Libya and sanctions against Iran, but there are many more options.

I believe a proactive role in Europe would pay rich dividends in policy and perception – both at home and overseas. It would also highlight our British value to the European Union, and by highlighting our value encourage acceptance of our demands. Our case is logical and can change minds, but it will require time and patience and commitment.

What of the future?

Why are so many of the British – perhaps especially the English – so cool towards the EU?

Some blame Eurosceptic opinion, and that has been a powerful factor. As pro-Europeans have remained silent, anti-Europeans have become more vocal – and less tolerant.

But that is far from the whole story. Europe is also culpable. Year after year, Continental leaders have told us that Britain is an essential and valued member of the European project. That is flattering, but their soft words are offset when they pursue policies they know to be anathema to us. For years, Continental leaders have denied a federal ambition, while their policies have moved us closer towards it. They have introduced a single currency, job-destroying legislation and excessive regulation. There has been a wilful refusal to complete the Single Market. Some have flirted with protection. All of these policies are against British advice and British interests. If we are seen to be unreasonable by some, we do have some cause for that stand.

And emotion matters too, in this debate. Our electorate doesn’t like to see Britain dragged along at the tail of the cart: they’d much prefer to see us to be in the driving seat. I suspect that if Britain were seen to be proactive in policy, it would revolutionize British public opinion.

And that is necessary: because at present, public frustration is very deep. Perhaps deeper with Europe than I can ever recall it being at any time in the past.

We don’t know where ‘more Europe’ will end. Or how we can stop an everincreasing bureaucratic power grab into what Douglas Hurd memorably called ‘the nooks and crannies of our national life’. People fear: will we eventually be submerged in an undemocratic United States of Europe? For most of us, that is simply unacceptable.

We need an end point, and we need to know what it is. And we need to be confident that it will not be breached. These are all matters for the negotiations to come.

Let me summarize.

When we come to the referendum, the public will decide. At present, affection for the European Union is minimal. Its virtues are denied, even ridiculed. Its drawbacks are emblazoned in debate. Years of negativity have sunk deep into the British psyche. Ill-feeling between pro and anti factions is worn by some like a badge of honour. Debate over Europe tends to be conducted at the extremes of opinion, with most of the country uninvolved. A single-issue party, dedicated to withdrawal, has grown in public popularity. Public scepticism about Europe feeds on an intense patriotism, and has become a reality our political system cannot ignore.

Some see the referendum as merely a piece of party political management – but it is much more than that.

It can be cathartic.

It can end 40 years of political squabbles.

It can allow our Parliament, undistracted, to put vital issues – such as the growing underclass and the disregard into which politics has fallen – where they should be: at the very forefront of our national debate and national agenda.

The referendum can help reform the European Union, and for the better.

It can resolve both justified – and unjustified – fears about our membership.

And it can encourage the United Kingdom to take a more positive leadership role in the development of future policy.

All this is possible.

Let me close with a vignette. In 1990, in an attempt to head off a Single Currency, I advanced the concept of the ‘hard ecu’: a parallel currency that was market-driven and would co-exist with national currencies. Our proposal failed. It was – first – too late; but the more pertinent reason was explained to me by President Mitterrand. His response was simple. ‘Right policy – wrong country.’

‘Right policy  – wrong country.’ All too often, that sums up how Britain has been regarded in Europe. The referendum gives us an opportunity to change that perception. It is in Britain’s interests – and Europe’s interests – that we take this opportunity and that we do so.

Thank you very much.

Below is the text of Sir John Major’s speech at the Conservative Middle East Council Dinner held at Claridge’s Ballroom on Wednesday 16th June 2010.

Your Excellencies, My Lords, Ladies and Gentlemen,

Delighted to be here this evening. As I look around this gathering, I see new Ministers who face a herculean task, and old colleagues like Dennis Walters, Founder of this Council. I also see my old friend, Ken Clarke, who I am delighted to see back in Government. And, above all, distinguished Ambassadors representing our friends and allies in the Middle East. It is good to see you all.

These days, I travel for almost six months a year. I marvel at the growth in the Middle East. I see the huge opportunities that are still to come. But, too often, I am told on my travels: “We see the French, the Germans, the Chinese – where are the British?”. I am delighted David Cameron and William Hague have re-stated our commitment to the wider region. We must never allow old friends to become distant friends.

First, a warning: all over the world Governments have their own cautious language when engaged in diplomacy. Often what is not said is as important – if not more so – than what is said.

Tonight you will need no interpretive skills: I speak solely for myself, and having the freedom to say exactly what I think, in the way that I wish, is one of the delights of not being in Government.

Iraq

When Iraq attacked Kuwait in 1990 – without cause or justification – the case for war was clear-cut. An innocent country was invaded and needed liberation. And when it was over we had a further responsibility: to protect the Kurds from genocide.

The second Iraq War was very different.

Before it began, I made my reservations public but supported the war – because I believed what the then Prime Minister told us about weapons of mass destruction. When I was Prime Minister, everything I said in public was factually rock solid. I assumed that principle still applied. But I was wrong. It now seems there was little justification for the bellicose case for war that was presented. I was not alone in being misled. So was the Conservative Party. So was the United Kingdom.

Today that war looks like folly. The defence of it has shrunk to the claim that Saddam Hussein was a bad man, who mistreated his nation, and the world is better off without him.

That is true. But others are bad, too – and mistreat their nations – yet we don’t invade their countries or bomb them from 30,000 feet. It may be that the Labour Government acted in good faith. Judgement on that can be left to history.

But, I observe now – there are lessons: war should be the last resort, entered into only when circumstances compel it. And secondly: we now have on-going responsibilities to help rebuild Iraq that we cannot ignore.

Afghanistan

We have now been at war in Afghanistan for eight years – with no sign of an ending. Inevitably there is war weariness – made worse by the depressing rise in casualties. Poor political direction has dogged this mission from the outset. The Labour Government hoped “not a shot would be fired” but 298 British dead mock that naivety. For too long, troops in the field were ill-equipped: that, thankfully, is at last corrected and I hope they now will have all the support they need – in action and on their return home.

Afghanistan is not a war that can easily be “won”, but nor can it be ignored: we are bound to it by necessity.

And it is easy to see why.

The war has spread into Pakistan – a Western ally and a nuclear power where Taleban and Jihadist influence has been growing.

The Afghanistan campaign is now, arguably, not one, but several intertwined conflicts including a power struggle between Jihadists and the Pakistan Government.

As the conflict becomes more messy and intractable, it is understandable that some feel we should bring the troops home – as Canada and the Netherlands plan to do in 2011.

But not yet. Too much is at stake. We need patience and commitment for what could yet be a long military and civil campaign: the alternative is to lose the struggle, boost terror, undermine American and British prestige, and place Pakistan at risk. We did not seek this war, but we cannot – either morally or safely – walk away from it.

The best exit strategy is victory. If that is unobtainable – diplomacy. We may yet have to talk to the Taliban.

Arab-Israel

The Arab/Israeli dispute colours the view of the Middle East. It spills beyond its own borders and has scarred politics for decades. And is it not absurd that we know the two-State solution we seek, but cannot turn it into reality? Morality, as well as practicality, says we need a solution.

After several decades, a bilateral negotiated settlement is still far away: many wonder if it will ever be possible. Attempts at incremental agreements – “confidence building” in the jargon – have failed again and again. Peace negotiations resemble nothing so much as the mating of the Black Widow Spider. Once the dance is over, death and destruction inevitably follow. How often we have seen that, and how damaging it is.

The present situation is close to stalemate. Palestinians are split. Secular Fatah control the West Bank. Islamic Hamas rule in Gaza. Hamas deny the right of Israel to even exist. They will not renounce violence nor accept previous agreements made by Palestinian negotiators.

In Jerusalem, the situation on the ground is constantly worsening. Three old religions and one historic City stand at the heart of the dilemma. Both Israelis and Palestinians see different parts of Jerusalem as their legitimate capital, yet illegal settlement growth in East Jerusalem is absorbing it into West Jerusalem and making it difficult to see how a peaceful division of the City could ever be possible. Other policies are forcing Palestinians to move. Plainly, this inhibits successful negotiations.

In recent months, Israel has upset even her strongest allies. The murder of a Hamas commander in Dubai and the raid on aid ships heading for Gaza were diplomatic disasters. So, frankly, is the Gaza blockade because it is creating growing support for Hamas at the expense of Fatah – which is not remotely in Israel’s self-interest. Israeli opinion is puzzled. It resents criticism because it cannot understand why much of the world seems more tolerant of Hamas misbehaviour than Israeli action. I can explain this conundrum: it is that the world expects far more of Israel, a democratic State, than Hamas, a terrorist organisation. If Israel reaches out to her friends, she will receive support: if she does not, she will limit their tolerance of her actions.

Is there a solution? Yes, of course – the obvious one, a negotiated settlement. But, if that cannot be achieved, if negotiators from Israel and the Palestinians cannot – or will not – make the concessions necessary to compromise, what then?

Can the international community allow this dispute to run on and on forever – or will the time come when they have no choice other than to press their own ideas for a settlement?

Understandably, the protagonists would hate this: but, if both sides take positions that impede progress, what alternative exists?

Over recent years, the concept of an international peace-keeping force in Gaza and the West Bank has gained support. In Gaza, by monitoring the Egypt/Gaza border, it could inhibit the ability of Hamas to attack Israeli towns with rockets and, by enabling the blockade to be lifted, prevent the complete collapse of the economy. In the West Bank, it could focus on civil improvement, economic advance and more effective law and order.

If progress is not made soon in bilateral negotiations, this idea may become an early step towards an imposed agreement.

Will this be difficult? Of course it will. It is a gamble, a high risk toss of the coin, and one that requires great political courage, especially in Washington.

Will it work? No-one can know – but nothing else has. Will America do it? Most people accept that the strength of the Israeli lobby limits America’s freedom of action. But time – and patience – is running out. The political risk of pressuring Israel – for any American Administration – is very great, but a contrary truth is that an agreement is in Israel’s long-term interest every bit as much as the Palestinians.

Impossible, some say. Really? That’s what I was told before we started the Northern Ireland Peace Process. Distrust there was as toxic as between Israel and her adversaries, and yet Ireland is now a changed country, with neighbours once at war with one another, living together in harmony.

And what is the alternative? A perpetual ongoing dispute that leaves generations of Israelis and Palestinians facing the same conundrum, the same hatreds, the same insecurities – until another war breaks out with enhanced weapons and an incalculable outcome.

Iran

Churchill once referred to Russia as “A riddle, wrapped in a mystery, inside an enigma”. He went on to say: “But perhaps there is a key. That key is Russian national interest.”

Much the same could be said of Iran today. In the year since the flawed re election of Ahmadinejad, there has been widespread internal dissent by hundreds of thousands of individual Iranians. There have been marches, coded speeches, intellectual dissent, as liberty has raised its voice. The regime has responded with repression but, like others before them, they will find that the demand for change, for something better, for a free and open society, is impossible to smother forever. You cannot arrest freedom and keep it in jail.

Because of the regime, we view Iran through a very narrow prism. Is she developing nuclear weapons? When will she have them? Will she use them? On whom? Some ask whether America – or Israel as a proxy – should attack and destroy Iran’s nuclear facilities?

The fear of a nuclear Iran is real. If she obtains a weapon, the risk of proliferation is high.

Why is Iran doing this? The economy is in a mess. The currency is weak. Inflation, interest rates and unemployment are high. In the MENA, she is rated 137th out of 163 in terms of ease of doing business – only just ahead of the West Bank and Gaza. A sad comedown for a nation that, as Persia, was a great Empire, when the British and Americans lived in mud huts.

Nothing is explicable without understanding that Iran is a nationalist and hard-line regime. The real source of power is the Supreme Leader, backed by the Revolutionary Guards, the Army, the Intelligence Services and the Police. The President, Ahmadinejad – so often the face of Iran – is a secondary figure. He is not the decisive decision-maker. He is the Apprentice, not the Sorcerer.

What should we do? First, remember the regime is not the nation – as the internal dissent vividly makes clear. Even so, while the clerical regime survives, we must deal with it. It is possible negotiations may improve relations; and we should continue to try. But, because of the threat she poses, we must supplement dialogue with incentives and sanctions. In any event, adding a third military conflict after Iraq and Afghanistan is very unattractive – even if we cannot rule it out. But, for the time being, the sanctions applied last week seem the right way forward. We can only hope they prove sufficient.

So often time is a tyrant. There is much I would like to have said of Lebanon – so often an innocent victim of wider issues. Of Syria – and how to engage her. Of Jordan – and our close friends in the Gulf. Of the rosy prospects of North Africa. Of Egypt and Turkey – and the importance of their role, and my support for Turkey’s application to join the EU.

These – and other – issues must wait for another day. But not, I hope, for too long. The Middle East is stirring and we need to embrace it, consult it and benefit from its wisdom.

If we do not, it will be our loss.

Below is the text of Mr Major’s speech to businessmen in London on Wednesday 10th January 1996. A copy of the press release following the speech is available at http://www.johnmajor.co.uk/page1212.html.

Peter, Good Morning and thank you for taking the trouble to organise this event. It has been such a quiet and dull political period over Christmas that I have been looking forward to this morning with great anticipation.

As you said a moment or so ago, Peter, we have gathered here in this room a very substantial number of the most senior businessmen representing the largest corporations and newspapers throughout the United Kingdom. Here are many of the people who make many of the crucial decisions about where investment goes and what actually happens to the future prosperity of this country. And so I want to spend most of the time speaking to you this morning about matters economic in one form or another, and then leave as much time as possible for you to ask the questions that concern you.

Let me just back-track for a few moments and look over the last years to perhaps put today and tomorrow in a slightly better context. No-one doubts how difficult the last few years have been, the recession was longer than it was expected, it was deeper than we expected, it had a more profound psychological effect upon thinking in this country than many people anticipated when it began or even as it continued and seemed at one stage to be going on almost forever.

Not just of course a problem for the United Kingdom, it was a recession that spread throughout all of the Western world and some parts of the rest of the business world as well. But it is behind us now and what I want people to concentrate on at the moment are the circumstances that face us at the moment and to wipe away the mindset that we have had for so much of the past 3 or 4 years.

There is a tendency in human nature generally that if things are difficult they are going to go on being difficult forever; if things are excellent they are going to go on being benevolent forever. Neither of those things are true. We did have, as a country, in company with the rest of Western Europe, a very difficult economic period. But we have actually been out of recession technically for over 2 years and in reality out of recession quite substantially for a very substantial period now.

What we need to do is to look at where we are, uncluttered by the memories of what happened, and look at the prospects that lie immediately ahead of us at the present time. And I say that because if we don’t do that, if we, government and business, leave ourselves with the mindset of 1992 and 1993 then we will miss the opportunities of 1997 and the years that follow it.

Let me try and break some of the distorting prism of opinion that occasionally entraps people when they think about our prospects. I suppose you might call it an alternative news summary, some of the things that get less publicity than they might unless they appear in a brown sealed envelope.

You touched upon some of them, Peter. Inflation probably, I think certainly, under more secure lock and key than we have known certainly in my political lifetime, and I don’t just mean in Parliament, I mean since I first entered politics as a 16 year old. We are certainly going to be well within our inflation targets. I suspect if the election is when I anticipate it will be that we will have met our 2.5 percent target that we set ourselves for inflation by the time we reach the next election. It is no longer, almost for the first time in the memory of most of the people round this room, a material problem to future investment because there is an acceptance that inflation is now under proper control.

If we have broken the inflationary psychology, and I pray that we have, then both in the short term and the long term I think that is one of the most remarkable and benevolent changes for British industry and commerce that we have seen literally for decades.

Secondly, interest rates, not quite at an historic low, but certainly by comparison with most of the last quarter of a century low and no serious risk in the short term that they are going to be significantly higher and we hope, all things being well, that it may be possible to reduce them.

Mortgages at their lowest level for 30 years. Unemployment now having fallen for 26 months in a row, down to 8 percent. Our nearest neighbours, perhaps the closest economy – France – with unemployment stuck at around 12.8 percent, no major European economy having either unemployment as low as us in the United Kingdom or, and perhaps this is a better measure, no other major European country with as high a proportion of its adult population in work as we have in the United Kingdom. We have now beaten Germany on both those counts for the first time that I can! ever remember. And of course tax at its lowest level we have seen for 50 years.

Now that wasn’t easy to achieve. It didn’t happen by magic. It did happen because throughout the past 3 or 4 years, often when we were invited to take decisions that would have been popular in the short term but damaging in the long term, we didn’t take those damaging long term decisions, instead we took the short term unpopularity and as a result of that we have the economic opportunities that lie immediately ahead of us at present.

They are opportunities, they are yet to be taken, but I believe they are opportunities that put us well on track for the doubling of living standards in 20 years that I set out as our objective 18 months or so ago.

Let us look at some of the other indicators that are now becoming apparent. At last, much slower, much later than I would have hoped, we are beginning to see house prices having increased for each of the last 5 months. After having had to put up taxes because of the size of the fiscal deficit, and it was frankly a choice between taxes going up or interest rates going up, and think it was right to deal with it, taxes are reversible when the time is right and we now have personal taxation back I hope on a downward trend. Sales rising. And although it isn’t directly an economic matter, it affects many people in this room, for the first time in 40 years the clearest possible indication that crime is now on a downward trend. And for those cynics who say, and there are sadly cynics in public life, that the crime statistics are rubbish, it is simply that people are not reporting crime, I would refer them to the insurance companies and the statistics that they have released for theft of motor cars for example. Because I think it is very hard to argue that anyone who has had their motor car stolen would not actually report it to the insurance company in order to make a claim. And that shows a distinct downward trend as well and you can see that elsewhere across crime.

If I may make some other points. We have, despite the criticism of privatisation, the best single method of giving people a personal stake in society I would have thought, a shareholding stake in society, despite the criticism there has been of the privatised industries, some of it justified, some of it not, the reality is that the price of utilities, crucial to the living standards of people right across this country, are more stable than we have known them at any stage before and in most of the cases, in real terms, the price is actually falling.

And if I may make a political point for a moment. That has been achieved over the past 4 years with a tiny parliamentary majority, all of which, as we have occasionally seen, not absolutely steady on parade on every single occasion, it has been achieved in a hostile economic environment and with a totally opportunistic and destructive political opposition.

We have immediately ahead of us some legislation that is crucial for the future. It is very fashionable to take the view that there is an empty legislative programme. I don’t regard a Finance Bill that cuts taxes as being empty; I don’t regard an Education Bill that extends opportunity and choice as being empty; I don’t regard a Broadcasting Bill that begins to prepare us better than we have been prepared for, for the IT revolution that is taking place as being empty; neither do I regard the rest of the parliamentary programme as being anything other than absolutely necessary.

We are now within 16 months or so of a general election. And if the principal opposition party can force it, of course they would like that election a good deal earlier. And I will tell you why. They would like the election earlier because like me they know they know that the economy is improving, they know that that is beginning to become apparent to people, they know that there is now going to be a rising level of net disposable income and people will feel noticeably better than they have done in the past and they would like to have the election early before that becomes increasingly apparent to people up and down the country.

But there is at this election a great deal at stake, not just the protection of the remarkable changes that have been made throughout the last 16 years, not just the protection of those for they have made to our competitiveness a dramatic difference over that period, but much else besides. And I would say to those people who may be tempted by an alternative, it is a very dangerous proposition to play Russian roulette with all the barrels loaded, and no-one should assume that the advances that we have made would be safe with any alternative government. So people, not just business, but people up and down this country have a great deal to lose if they decide upon a reckless gamble of that sort.

Let me touch upon some of those points and then I want to come to something which is very current at the present time. Benign circumstances, certainly; huge opportunities for the future, beyond a doubt, but they won’t necessarily be there with the wrong policies or with the wrong government. Does one really accept, do the people out there in the country really believe that Gordon Brown would have the same rigorous control over inflation that we have accepted, with great political unpopularity? Do people really believe that Robin Cook would defend our position in Europe with the same vigour that we have done over recent years? Are there people present who believe that Margaret Beckett is so concerned about competitiveness that she would ditch her personal wish to return much of the old trade union legislation that existed in the past? Is there anyone present, or indeed in the country, who seriously believes that Jack Straw would take a tougher line on crime than Michael Howard?

Well I don’t think that there are. I could go on, I have overlooked John Prescott. Now I come to think of it, this is one of the things Tony Blair and I have in common because we both overlook John Prescott, I don’t invite him to meetings either and I appreciate why Tony doesn’t.

It is worth concentrating on the fact that a government requires 18 Members in the House of Commons and something up to 30 in the House of Lords. And the mindset of most of our opponents, there may be a leader with one view but where is the heart of the party elsewhere? While the majority of the Labour Party still sings the red flag, the Leader may be humming Mandelson rather than the red flag, but the instinct of the party is where the instinct of the party has been in the past.

Over the last few months it has been interesting to try and see the way in which political programmes for the future have been set out and I will return to our plans for making the United Kingdom the enterprise centre of Europe in a few moments. But just a few days ago, in Japan, the Leader of the Labour Party set out his plans for what he called a stakeholder society. It is not entirely clear what he meant by that. As with his reversal of Clause 4, there was a hint in his speech and his spin-doctors then explained what it was that he might have meant by what it was that he almost said.

But a stakeholder society is either a soundbite too many or alternatively it is the beginnings of the return to some form of corporate society. And I will set out for you why I believe that is so. Perhaps it is meaningless, who can tell? We certainly in the past have frequently seen spin-doctors elaborating on what has been said, that is the style of the Labour Party. But if it is old-style corporatism then I think we had better flush that out before people just overlook it and we skim on. Because what that potentially is is very damaging for the United Kingdom.

Who are the stakeholders to be? Are the stakeholders to be 30-odd million adults? And if they are to be the stakeholders, why are they not to be stakeholders in the form we have built up over the last 16 years, with their own personal pensions, with their own homes, with the lowest level of taxation, with shareholdings, more shareholders now than there are trade unionists in this country? That is a genuine stake. People have a real interest, literally a share in this nation that is personally theirs and not determined by some other body on their behalf telling them that they, the body, are looking after their interests for them.

But if the stakeholders, as I suspect from what we hear, are quite different bodies then we are in a different ballgame. And I rather suspect, as so often, that Margaret Beckett was revealing the truth of what is planned when she said just the other day, and I quote: “There is growing concern that the many interest groups, in particular the general public, consumers and so on”, she wanted to soften it of course, “are excluded from some of the thinking in industry in the past and there is a general exploration of how we can create more common ground, how we can make sure that all interests are taken into account when we look at stakeholders.”

Well I will tell you who they really mean. They mean the special interest groups, they mean the trade unions, they mean the people that so often are covered by so much of the social chapter type of thinking in this country. That is what I suspect they mean when they actually talk about stakeholders.

What I believe we are seeing is the tip of a plan which is nothing better than a fancy packaging for new burdens on business of one sort or another. And although some of those burdens that have already been apparent that sound benign, they are not. A minimum wage does sound benign, particularly to those who are very poorly paid, but it is not benign because it often means that those who are poorly paid would not be paid in a job at all if you had a minimum wage legislation. A training levy, which I think would be a great mistake to introduce. The social chapter – the problem with the social chapter is twofold, it is not just what is in the social chapter at the moment, damaging enough though that is, the real danger were the United Kingdom to sign up to the social chapter in Europe and leave it free across the whole of Europe is not so much what is in it now but what would then be brought into the social chapter because that is the ambition of nearly all the rest of our European partners to bring much of their domestic social legislation, under the social chapter heading, in order to remove their competitive disadvantage against the United Kingdom in particular and other countries in general.

And I will not sign up to that, and I will not sign up to that for a moral reason and I will tell you the moral reason. When our political opponents talk of the social chapter they talk of it in very benign terms from the point of view of someone who is in work getting greater protection. Well I gloss over the fact that few of them would be in work. But I would put this question to you.

If you make it more expensive to employ people who are in work, the employer will firstly employ less and it will be correspondingly more difficult for those not in work ever to get themselves into work. It is politicians across Europe, using employers’ money to buy popularity for themselves and the losers are the people not in work who, as a result of that, might never get into work or certainly would have their chance of getting into work greatly reduced.

And I have to tell you, I don’t just think that is economically wrong, I think that is plain immoral when you actually look at what the practical effect would be. Right the way across the European Union there is too much unemployment. 20 million or so adults in the European Union are unemployed. And if you look at the trend from 1950 onwards, it doesn’t matter whether it is good days or bad days, boom or bust, you have had that underlying growth in unemployment. And why, when the rest of the world has been creating jobs? Because we have become relatively less competitive. It does not matter a tuppenny damn within the European Union if there are minor changes in competitiveness.

What does matter is if throughout the whole of the European Union we become less competitive to Japan, to the United States, to Latin America, to the Pacific Basin countries, and that over 30 years is what has been happening. And that is the matter, the principal matter, that so many people in the European Union ought to be turning their mind to rather than so many of the narrow and institutional questions that have bothered people so much over the last few years.

Now let me turn to the ambitions that I would wish to see this country achieve. Let me firstly put our position in context. The government, on behalf of the public, spends at the moment about 42 percent of the national income. I compare that 42 percent to the average of 52 percent elsewhere in the European Union – 52 percent elsewhere, 42 percent here. But that 42 percent also needs to be compared with our other competitors around the world, and it is too high, and the expenditure plans that we have will bring it down below 40 percent and then I believe there is scope to reduce it a little further, though precisely how far I wouldn’t care to judge at this moment, but certainly we will get it down below 40 percent and then lower still if we can to open up the prospects of greater competitiveness and lower tax burden on both industry and on individuals. And I believe that is eminently achievable providing we keep a proper grip on inflation and the sort of economic policies that we have followed over the past few years.

Where are the priorities? When? And I make no promise about the date, nobody say I am making distinct tax promises, but let me set out the objectives that we will reach when it is affordable.

Certainly we retain the objective of a 20 pence basic rate of tax. I can offer you no promises of changing the 40 pence, I don’t think that is a priority and I don’t wish to pretend to you that it is. But to get a 20 pence basic rate of tax does seem to me to be a very attractive priority.

I think in terms of enterprise taxes, and I will have a lot to say about enterprise over the next few months so I won’t concentrate on too much of that this morning. But in terms of enterprise, as it becomes affordable, let me repeat what I have said in the past. I believe it is in the country’s interest, economic, socially and certainly in terms of competitiveness, to over time abolish both inheritance tax and capital gains tax. I believe that the impact that the change in those taxes will have on the flow of investment will be of great benefit to many of the people who will wish for themselves and their children to have secure and growing employment prospects. I know it will be criticised as being aid to fat cats, of course that is always the politics of envy argument that can be used. But the best aid to people is to make sure that they actually have the opportunity of a decent job with decent prospects for the future, and that doesn’t magically appear without using the private sector to generate the investment that is necessary. And if people themselves earn success and rewards for that investment, I am not going to object to that. I would prefer to look not at the gains that they may get but at the opportunities that that investment by then will provide for many other people to be in proper and gainful employment. So I see those changes.

Clearly there is a great deal more to be done on deregulation. It is, I have to tell you frankly, like wrestling with a greasy pig, every time you deregulate here there is a new regulation that pops up elsewhere that is often gold plated because the people determining the regulations say well if I don’t gold plate it and something happens to go wrong, when the inevitable inquiry occurs I will be blamed. And so there is a great deal of gold plating of regulation and I think business is right to be critical of that fact over the years and we must look further to see how we can deregulate.

I just want to indicate one other point about the social chapter. I said how damaging it could become, but let me just illustrate in terms of social on-costs what it might mean. You employers, many of you round here in the United Kingdom, for every 100 pounds in wages that you pay out you would pay out an extra 18 pounds in on-costs of one sort or another. In Germany it wouldn’t be 18 pounds, it would be 32 pounds. In Spain it would be 34 pounds. In France it would be 41 pounds. And in Italy it would be 44 pounds. Is it any surprise when you begin to hear those figures and see the reality of what it means, that we are the principal centre for inward investment across the whole of Europe and that it is this country that is creating new jobs and seeing unemployment fall, and our European partners who are losing jobs and seeing unemployment remain at a stubbornly high level?

We have immediately ahead of us, and because I wish to leave questions for it I will not enlarge on it in any detail, some crucially important decisions for this country. Just because we have an economy that is benign doesn’t mean there aren’t very big decisions to be taken. There will be important decisions on European matters on a number of fronts – the Intergovernmental Conference, the single currency in due course, difficult questions on defence and the way in which NATO evolves and also its relationship with the Western European Union and conceivably the European Union itself. And most crucial of all in many respects, the way in which enlargement of the European Union is itself handled, something that I regard of critical importance. Again, while so much of the debate and discussion has been about institutional matters within the existing Europe, the opportunity for this generation of politicians to fundamentally improve our security in the future by extending the borders of the European Union, of the free market and embracing in the democratic embrace of Western Europe lots of countries of Central and Eastern Europe, the opportunity for doing that is greater than we have known in the past, and if this generation of politicians misses that opportunity the time may come in the future when people would curse us for our short-sightedness in not having ensured democracy in those countries that only escaped from a communist embrace within the period of the last few years.

They are big questions, apart from the domestic questions of continually expanding and unfolding the entrance into what was once the secret garden of education so that parents have proper choice and opportunity. These are matters of crucial importance to our future, they are matters where the choice between the parties is very great.

You asked me, Peter, at the beginning, was this election there to be won, and the answer is yes it is. I have not a shred of doubt in my mind that the opinion poll figures are wholly illusory, neither do I have a shred of doubt in my mind that we can and that we will win that general election. Of course it is going to be a fight. I recall what I think it was John Paul Jones said when faced with a particularly difficult naval battle: “Fight”, he said, “I have not yet begun to fight”. And there is up to 16 months before the general election with a growing difference between the parties. The stakeholder speech the other day may well open red water between the two parties because I believe, if it means the corporatism I think it means, it is a fundamental political error that the Labour Party have just made.

So yes we are going to fight for this election, not just because we want another period of power, we have had 16 years of power, but we are going to fight for this election because we have built up in the last 16 years a greater stock of improvement in the life standards of the average Briton than we have seen in any 16 years of government by any political party at any stage in this century.

And I don’t wish to see that thrown away, I do wish to see it built on over the next few years, and I intend to see that it is and I intend to be there to do it.

Below is the text of the speech made by John Major, the then Prime Minister, to the Institute of Directors on 19th January 1996.

I am delighted to be here on this occasion to have the opportunity of talking about some of the matters that lie ahead of us economically and some of the opportunities that are there for us to take.

I had the opportunity this morning to reflect on these in a rather philosophical mode. I spent the early part of this morning at Ironbridge – the cradle of the industrial revolution. And there at Ironbridge, by innovation, enterprise, investment, sweat and courage, new industries were born and the world followed Britain’s lead. It helped in its day build an unparalleled prosperity for this country.

As we meet here today we are in the middle of another more complex but equally important industrial revolution. It is one that will have a just as far reaching effect upon this country if we are successful in the way we approach it.

Last year at this very same convention centre, I set out five core principles, core themes, for our future. Today I would like to elaborate, to concentrate, upon just one of them. But let me remind you what those five themes were: to build a nation of enterprise and prosperity, a nation of opportunity and ownership, to safeguard law and order, to deliver first class public services and to defend a strong, united and sovereign United Kingdom.

All of those are important. But today I want to focus on just one of them, I want to focus upon enterprise.

Not all that many years ago Britain was universally regarded as the sick man of Europe. We had over mighty trade unions, strikes brought the country to a standstill, inflation hit all time highs and nationalised industries cost the taxpayer 50 million pounds each and every week. Today that is all behind us and I for one never wish to see those set of circumstances return to this country again.

What is true as we meet here at lunchtime, though it is unfashionable to say so, is that Britain is today building a platform for success that is outstripping more and more of our competitors across Europe.

In our adversarial political system, and I make no complaint about the nature of that, but in that adversarial political system many have a vested interest in scoffing at our success. But they can’t deny the fact of it.

We have seen the longest period of low inflation for 50 years. When inflation is there it is a mighty peril, when it has gone it is speedily forgotten. But I recall how it rendered us uncompetitive, how it destroyed our savings, how it brought this country almost to its knees in earlier years, and now we have the psychology of inflation under firmer lock and key than ever in my lifetime. I am proud of that and I have no intention of letting that lock go in the future.

We have now got the lowest basic rate of tax for over 50 years, the lowest mortgage rates for over 30 years. We have more of our people in the United Kingdom actually in jobs, and fewer unemployed, than any major European economy. And I wonder how many people in this room can remember when last that was the circumstance.

We have exports running at record levels. We have days lost for strikes falling to the lowest level since we first began to keep records of that. And Britain is the leading recipient in Europe of foreign investment. Indeed over the recent years we have received more foreign investment from outside Europe into the United Kingdom than has gone into the rest of the European Union added together.

That is what Britain has achieved. It is not a negligible achievement. Of course there is a great deal more to be done, but the position that we have reached offers very great opportunities for the future provided the policies to take advantage of those opportunities are not thrown to one side and are followed through in the years that lie immediately ahead.

I have no doubt about the key to that future. The key to that future is enterprise, enterprise at the heart of a free and prosperous society. With enterprise comes risk, but also reward. It creates competitiveness and builds prosperity and economic growth. Growth – a buzzword to some, but a reality for all our hopes. It is growth that pays for our national security,our defence forces, that pays for our social inclinations, our education system, our social provision, and so it is crucial for our future well-being.

And it is for that reason, the belief that I have that we need growth with low inflation if we are to maximise our opportunities for this generation, this country and future generations, that leads me to say that I believe that what we need to do is to promote the opportunities of enterprise for the future. And it is because of that that the government that I lead aims to turn Britain into the unrivalled enterprise centre of Europe, not just in the short term but for the long term future.

That will not be achieved without effort, it cannot be achieved by empty slogans. Britain can only do it if we believe in the values of enterprise and we then follow the policies that promote enterprise. Enterprise benefits society through the goods it makes and the services it provides, through the jobs it creates and the taxes it pays to support public services, through the contribution that businesses make to the communities around them. And it is worth considering that just for a moment. That contribution takes many forms, working to improve the local economy, to improve training, in Techs, in Chambers of Commerce and countless other local business groups, getting involved in local schools, helping voluntary groups, sponsoring sport and sponsoring the arts.

Our businesses, in my judgment, enrich our society in every sense of the word. They don’t need someone to instruct them to do this any more than they need someone to instruct them upon how to run their business.

But this enterprise culture, this opportunity, this belief in enterprise and all the wider benefits it brings, would be very easy to destroy. Vilify our businessmen for their very success, interfere on the grounds that the government knows best, make it impossible for them to earn a fair reward for their efforts, that would do it, that would destroy what is currently being built in this country for the benefit not just of businessmen but of all the people of this country.

And there is an idea, passed on from generation to generation by a curious mix of the well meaning, the envious and the confused, that it is wrong for business to make a profit. What nonsense that is. It is about time not just the politicians but that business defended the need to make a profit in the common wheel as well as in the interests of the shareholder. Profit should be applauded, not condemned. It is not a dirty word except to the peddlers of envy. It funds investment, it generates jobs, it is not only respectable, it is essential for the future that we wish to build.

If there is no profit then there is no enterprise. If there is no enterprise then there are no jobs. If there is no enterprise and no jobs then we will all be the poorer.

Government has its own role in fostering enterprise. I am not in favour of unadulterated laissez faire. Enterprise depends on government to follow sensible economic policies and create the right tax and regulatory environment, and we Conservatives are tax-cutters by conviction whenever we have the opportunity. And when I say tax-cutters by conviction, when I look at the demands for the future, the demands that demand an enterprise system for this country in the future, I don’t just refer to income tax when I refer to the Conservatives being tax-cutters by conviction. Taxes on capital are like taxes on jobs. If they are too high it is not worth building up a business and employing people. And that is why I want to cut, and in due course, and I offer you no timescale for this, but that is why I want to cut and in due course abolish both capital gains tax and inheritance tax.

Our opponents, playing their old game of the politics of envy, claim that reducing these taxes only benefits the few. But what that shows is how little they truly understand enterprise and all its effects. By denying businessmen and their families the rewards of their efforts, these taxes discourage enterprise, discourage job creation and discourage the growth of prosperity right across this country.

This country today, Britain today, now has the lowest tax burden of any major European economy. Forty-two percent of our national income is spent by the government on behalf of the taxpayer. That is going on for 10 percent less than the European average. That gap is worth 60 billion pounds a year, the equivalent of around 30p on the basic rate of income tax. So we are doing far better than Europe, even our competitors admit it. Even Germany, for so long seen as the strongest and most competitive economy anywhere in Europe.

But listen to what the Head of the German CBI had to say about the German economy just the other day: “We have too rigid labour laws, we have too high social costs and taxes. We work the shortest working week in Europe. The German government spends 50 percent of GDP as opposed to 42 percent in Britain – no wonder we have a problem.” That is the voice of modern Germany looking enviously at the situation that is applying in modern Britain.

And I believe that 42 percent that we spend, that we the government spend on behalf of the taxpayer, still isn’t good enough. I want to get government spending down to below 40 percent of our national income in the first instance. We need to raise our eyes beyond the competition with our European partners. We need to compete worldwide where half of all our trade goes outside the European Union, with Japan, with the United States and with countries like Korea, Singapore and Taiwan.

It is not just enough to have warm aspirations and to set soft targets. Controlling public spending requires tough decisions, determination and foresight. And here we have built up an advantage over our competitors. We have taken many of the difficult decisions and accepted the political unpopularity that inevitably goes with them. And I believe we were right to do so.

Elsewhere that has not happened. Throughout Europe governments are waking up to the gap between the expectations of their citizens and the state’s ability to support them. And that is not some abstract problem. In France it erupted on to the streets. But we foresaw the problem and began to tackle it years ago.

Let me give you just one of a number of examples. By encouraging occupational pensions we have ensured people’s security and limited the burden on the state. And as a result we now have in this country, in Britain, more invested in pensions for the future than the rest of Europe added together.

And it is the same for the rest of our welfare system. Social security currently costs every worker 15 pounds every single day of the year. Until we began to reform it a few years ago, spending on benefits was set to grow faster than the economy as a whole, Clearly that couldn’t go on. Our reforms are now beginning to give us a social security system that is fair, that is reasonable and that the taxpayer can support, one which promotes incentives to save and be self-reliant – the values of an enterprise economy and above all makes it worthwhile to go out and get and accept a job.

But there is no point giving people incentives to get a job if firms themselves cannot afford to create jobs. Too often in Europe that is precisely what is happening. Approaching 20 million adults in Europe, as we meet here today, are unemployed. From the 1950s onwards, in good years of growth as well as bad years of no growth, the underlying level of unemployment has risen across Europe. I believe that that is a problem that Europe dare not ignore and I have repeatedly raised this point at European meetings.

When I say dare not ignore, I don’t just mean talk about, I mean determined policies that will actually encourage business to create jobs for the future. It is often said, not least by our political opponents, that we British are often isolated on some aspects of European policy, that we won’t accept the European consensus. Well I make no apology for rejecting consensus when that consensus in my judgment is wrong and not in the British interest.

Our political opponents say it is tedious, nationalistic of us, to oppose signing the social chapter. They think we should sign it. I believe we should not sign it and I believe this because of the facts of what it is, but more relevantly what it would do to the prospects of people in this country, as it has already done for the prospects of people across Europe.

And let me spell it out for you, because the campaign of mis-information about the cuddly sounding social chapter deserves to be exploded.

At present unemployment in Germany is 8.5 percent and rising. France and Italy 11.5 percent. Spain 22.5 percent. But here in Britain unemployment is 8 percent and falling. It has been falling month in, month out, month in, month out for around about two and a half years.

And why is it that Britain is doing better at creating jobs than the rest of Europe? In Britain, for every 100 pounds spent on wages, an employer has to add an extra 18 pounds for non-wage costs for every employee. But that same employer would have to add, not 18, but 32 pounds in Germany for every employee, 34 pounds in Spain, 41 pounds in France and 44 pounds in Italy. Why should entrepreneurs create jobs in those countries at that expense if it is cheaper to create jobs and more profitably in this country?

Our political opponents try to denigrate our record. They claim those new jobs are temporary and not real. Well let me nail that lie immediately. A higher proportion of the workforce are temporary employees in Germany, France and Spain. In Spain almost one-third of the workforce are temporary, and that compares with 7.5 percent only of employees in the United Kingdom. And why is there that disparity? Because temporary jobs are higher elsewhere because it is a loophole to escape the costs of restrictive employment and social regulations. These are the sort of costs that could be imposed on British business if we ever signed up to the social chapter.

Our opt-out that I negotiated at Maastricht, and to which I shall passionately hold for as long as I am in politics, that opt-out helps to protect Britain’s competitiveness at home and in Europe, and if we surrendered it that competitive edge would no longer be safe.

In many areas proposals under the social chapter will be put forward for decisions by qualified majority voting. I have no doubt that if it suited them, others would find a way to blur what can be imposed by majority voting and what cannot. If Britain were in the social chapter we would have precious little say over which bits of it applied to the United Kingdom. We could not rely on being able to block proposals that we thought were damaging. To think that we could pick and mix if we joined the social chapter is naive and wrong. There would be no opportunity to pick and mix.

Experience of negotiating in Europe has taught me that we must not just look at what is in the Social Chapter today, we must also look at what it can be used for in the future. The reality is that it will become the channel through which our European competitors could impose upon the United Kingdom their social costs, regulations and potentially their trades union laws.

Measures on working conditions could be imposed upon us and what does that mean? A ban on overtime, the Social Chapter already producing proposals regulating paternity leave and part-time employment. And then there is consultation: huge numbers of decisions businesses take clogged up by harmonised European rules about who needs to be consulted, how and when, with the inevitable cost, delay and difficulty in making those decisions in the interests of the country, the company and the workforce and that would put a very significant spanner in the works of successful businesses.

The fact is no-one knows precisely what the European Community might or might not propose under the Social Chapter or how the European Court would interpret it. It is a blank cheque, the thin end of a very dangerous and uncompetitive wedge.

It sounds very attractive to some politicians, it sounds like painless charity. It may sound nice for those people with jobs but I believe that it is dishonest because loading costs and regulation onto business makes it more expensive to employ people and that means only one thing: employers cannot hope to create new jobs and might well have to scrap existing jobs.

The Social Chapter should be seen for what it is – a European jobs tax, a tax on jobs by the front door and in time a tax on jobs by the back door and that is why I judge it to be immoral. That is why, if I had signed the Social Chapter, I would not have been able to look the unemployed in the eyes again. Europe needs more jobs; it does not mean more taxes on jobs – that is not in the interests of Europe and it is emphatically not in the interests of the United Kingdom. [Applause].

I opposed the Social Chapter at Maastricht and I opposed it on principle. I believed then that it would cost jobs and not create them and I was right. I still believe it. Our enterprise economy is not negotiable, our economic success is too valuable to be wrecked by Socialist experiments.

Let me say a word about our success at attracting inward investment. We are again here outstripping the rest our European partners but does anyone seriously believe that Japanese and American companies would still be coming here in their droves if we crippled ourselves with extra social costs as other people have done? I don’t think they would. Those companies bring not just jobs and investment; just as importantly, they bring innovations, new technology, new management techniques and the spur of competition and we must build on these skills but for that we need people who are able and motivated to learn from the success of others, people who can keep up with the pace of change, people who can dictate the pace of change for the future. I don’t doubt for a minute that the British nation are capable of that; they have the ability, the inspiration but it needs nurturing and above all, tomorrow’s businesses need a workforce with first-class education and skills, enterprise and education go together.

Education is the raw material not just for a satisfying life for the individual but for providing the skills that industry and commerce will need in the years that lie ahead and yet for too long too many of our children were getting a very raw deal from our education system. It would have been very easy to leave things as they were to avoid a row with the establishment and with establishment thinking, not to traipse into that secret garden of education that was kept so quiet and secret for so long. We could have avoided change and avoided many rows but I believe it would have been wrong to do so, so we tackled the problem and we took the rows because I believe there can be no compromise on standards in education – our future and our children’s future is too important for that.

Despite the scars – and there have been one or two – I am proud of what we have done in changing the education system. Thanks to the national curriculum, children are now taught the basics from an early age; now we are making sure we give our children the best possible start in nursery education; special literacy and numeracy centres will ensure children don’t miss out on the essentials; children are tested on a regular basis at 7, 11 and 14; exam results are published for all to see, giving parents the information they have always deserved but once did not get, essential information to exercise choice, a choice that now includes grant-maintained schools, city technology colleges so often sponsored by individual companies or individual businessmen, grammar schools, specialist schools and the whole system backed up by far more regular inspection and far more effective inspection than education in this country has ever known before.

Look at what we have done in some of those aspects of education by establishing a proper framework of vocational qualifications and by introducing modern apprenticeships. For far too long in this country education was regarded as a matter for academics and not something that should teach practical vocational skills as well and the way in which it led to an artificial class distinction between white-collar jobs and blue-collar jobs in my judgement was wholly wrong and did immense damage to this country over so much of the last century.

Look at the success also of investors in people and what the techs are now beginning to achieve. Look at the number of our young people who are now going on to further education, to higher education, to university. For many of my generation, that still remained an impossible dream. Today, one in every three of our young people go on to university; only fifteen or sixteen years ago, that was one in eight – today it is one in three.

We are seeing a revolution in education, a revolution in standards, a revolution in achievement. Of course, there is a great deal to be done and I am determined to continue to do it but it could not have been done unless we, the Conservative Party, had been in Government and it would not be carried forward in the future unless we remain in Government to carry out and carry through the education policies that we have been following. Our ambitions for enterprise and the whole quality of our life in the future depend upon carrying those policies forward.

I have spoken about how the Government is fostering enterprise but enterprise – important though profit is as I have acknowledged – is not only about that. The core of enterprise is not Government either, it is individuals, individuals with a special spark of magic, of imagination, of innovation, of a willingness to take risks, that “get up and go!” instinct that drives them to achieve what many other people believe to be impossible, often flying in the face of conventional wisdom, individuals inspired by a dream not of what is but a dream of what might be.

We do well to remember, those of us who promote innovation and enterprise and perhaps even more so those who despise it and fear it, that it wasn’t Government that invented the steam engine, the telephone, the motor car, the radio, it certainly wasn’t the Government that built British Railways – it was Government and nationalisation that ran down the service of British Railways and once again it will be private enterprise that builds it up when we have finished the privatisation of them – and indeed, Mr. Chairman, I somehow doubt it was a government that invented the wheel many years ago though I have to say I can read the memos that would have come to me at the time explaining how the invention of the wheel would undoubtedly have destroyed jobs and how we should not maximise this new and startling invention.

This spirit of enterprise isn’t confined to inventors who have changed the world, it is what has made thousands upon thousands of people every year set up in small businesses putting their security and their livelihoods on the line because they have an idea that they believe will work and they have that instinctive gut instinct that has always been in the British nation that they wish to set up something themselves, run it themselves, build it up for themselves in their interests and in the interests of their own families. That is a culture that we should encourage and it does mean putting aside another culture, it means putting aside the old culture of disparaging success and all those who aspire to it. If we wish to be a successful society, we cannot afford to be an envious society and we should turn our back on all those who preach envy whenever they have the opportunity. [Applause].

I don’t interpret enterprise narrowly. It is not just a business culture, it is a set of values that can be expressed in countless other ways as well – and it is – in charities, sports clubs, schools, hospitals and throughout the public service. I wonder how many of the successful businessmen here today actually use those precise same skills on behalf of the community generally in some other way, in hospital trusts, in school governorships, in sports bodies, in arts bodies, in whatever it may be? I suspect a very large number use that skill for enterprise that is their profession in the interests of the community in other ways as well and it is a Socialist myth that enterprise creates a selfish and greedy society; it is a myth that society can only be made fair and just by bureaucracy meddling and corporatism; it is a myth that you can make the weak stronger by making the strong weaker.

No-one disagrees in politics today that we have common obligations to help and protect people in our society who are vulnerable. The argument between the parties is not upon that principle, it is upon whose policies can create the wealth to do it. There is no point in having your heart upon your sleeve if your business enterprises are so unsuccessful there is no money in your wallet in order to meet the social obligations that all of us wish to accept.

I speak as a Conservative, Conservative by instinct not by learning. Some people occasionally say: “What great Conservative philosophers did the Prime Minister read?” and I say to them: “I didn’t read any Conservative philosophers, I learned my conservatism in the back streets of Brixton when I saw how Socialism had failed the people who lived there and I saw the only opportunity for getting out of that was to give people individual opportunity and choice for the future and make sure that opportunity and choice was available to everybody in this country wherever they came from, whatever their background, whatever their income, whatever their class, whatever their colour and whatever their creed!” That is what made me a Conservative and it is what keeps me a Conservative and it is the only thing that is going to make this country great. [Applause].

I stand for enterprise opportunity for the whole nation, one nation, undivided and whole, not one nation racked by false of devolution that will set one part of the United Kingdom against the other within immense damage to all of us in the years that lie ahead if such policies were to be carried through.

Mr. Chairman, you cannot build such a nation – the nation of enterprise, of hope and prosperity, the inclusive nation, with everybody having those choices that I passionately believe they should have – on warm words and soft policies and no substance. You cannot build it if your policies are for the short term and not for the long term, you cannot build it if you will not take the decisions unpopular in the short term that you believe to be right for the long term but you can build it if you are prepared to make the decisions you know are right, to defend those decisions and to promote them in Britain’s long-term interests.

I will tell you what I believe: I believe we are building a nation that creates prosperity by encouraging ownership, not ownership by the state extending its powers and right to meddle under the cloak of public interest, not ownership by the bureaucrat at the taxpayers’ expense but individual ownership through enterprise, shares, pensions, savings, homes and small businesses, the right to own and the power to choose. Those are the things that genuinely give people a stake in society for this generation and the next. That, I believe, is the way to build a nation that provides a ladder of opportunity and rewards success, a nation where there are incentives to work and a safety net for those who need it. That has been an intrinsic part of Conservative philosophy and Conservative gut instinct since the party had its founding days and it will never change. That is the Britain that we are building, the Britain that I care about, an enterprise Britain, a nation that is successful and of which we can be proud.

If I had a single wish, it would be that the people of this country could see the success of this country, its values, its institutions and its nation, with the same clarity that the rest of the world can see the success and the values of this country.

As we take the decisions ahead to build that enterprise Britain, some of them will be difficult. Not all decisions will be easy, not all the rewards will be swift but there is no choice. we must travel the enterprise road or we will fall behind those countries that do. The choice is very clear and I have made my choice. We will build this country as the enterprise centre of Europe and we will not be deflected. I believe in that we will be successful and I wish each and every one of you the same success in your individual endeavours. It is the amalgamation of those endeavours that will build up our nation.

It is our job as Government not to carry out your job for you but to provide the opportunity, the economic background and the incentives to encourage you and not discourage you and prevent you from playing your part in building up this country and its enterprise prospects for the future. It can be done. We are outstripping others. What would be fatal would be if we were to let go of the policies we have followed for so long and that are beginning to show the clearest fruits of success at present; if we were to throw them away in the future, generations ahead would look and say: “Why did they do it? On the eve of such success, why did they turn away from the opportunities that lay in front of them?” I do not believe that we will. I believe that enterprise centre of Europe is being built and will be built and I intend to see it through.[Applause].