Tag: Speeches

  • Stephen Timms – 2006 Speech to Resolution Foundation

    stephentimms

    Below is the text of the speech made by Stephen Timms, the then Minister of State for Pension Reform, to the Resolution Foundation on 7th February 2006.

    I am delighted to be here. I am an enthusiastic supporter of the corporate responsibility movement because I see it as one of the most hopeful resources we have for creative new ideas to address some big challenges our society faces. The Resolution Foundation is an excellent example of that and I warmly welcome this first public initiative which the Foundation is taking.

    We are in a busy period for welfare reform. We have made clear that our approach is underpinned by core values: equality, opportunity, fairness, social justice. Its an approach which resonates well with the British people, as we saw two weeks ago with the very warm public response to the welfare reform green paper, setting out how we can improve the opportunities for people who have become trapped on incapacity benefits, removing some of the barriers which have made it difficult for them to move back into employment, and encouraging them to do so. And the most positive responses of all came from disabled people themselves.

    And we want now to build on this pro-reform wave, building on the same values, to set out how we will make the most of the opportunities of an ageing society. We want to support successful outcomes throughout people’s lives, enabling people to make choices for themselves with confidence, and in that way to deliver security and dignity in retirement.

    Life expectancy at 65 has been going up by two or three months every year for the past quarter of a century, and the trend shows absolutely no sign of slackening off. If anything, it has been speeding up in the latter part of the period. It’s a wonderful transformation – arguably the greatest achievement of our civilisation – but its one which presents major challenges to our public and private pension systems.

    The Pensions Commission had three members: a former Director General of the CBI; last year’s President of the TUC; and a distinguished social policy academic from the LSE. And simply in producing for us a unanimous, well thought through report, which addresses the issues people have been raising, they have done us an enormous service. It opens up the chance now of an enduring pensions settlement for the UK, which everyone can see would be an enormous prize. To secure it, we need as broad as possible a consensus about the right way forward.

    The Commission’s first report identified two significant challenges. The first was the demographic challenge. In 1950 we spent 19% of our adult life in retirement. We now spend almost 30%. And the figure will rise further still. The second was under-saving. The Commission calculated that as many as 10 million people were not making adequate provision for retirement. People on low income form a significant proportion of this number – exactly the group the Resolution Foundation has been researching, and I do welcome the approach the Foundation has been taking.

    I would characterise the Commission’s final report in November as comprising essentially four bold ideas:

    – Auto-enrolment into a national system of personal pension accounts;

    – Mandatory matching employer contributions amounting to 3% of salary;

    – Basic state pension linked from 2010 to earnings rather than prices;

    – A gradual increase in state pension age in line with rising life expectancy, starting in 2020 – with a rise to 66 anticipated by 2030.

    We have welcomed the broad framework of the Pensions Commission proposals and options. As the report itself made clear, there is still much to be discussed and decided on the detail, but the report has provided us with the right framework for building the consensus for reform which we need.

    The National Pensions Debate was launched by David Blunkett last summer. There have been a series of events across the country, providing an opportunity for us to engage directly with individuals affected by the outcome of the debate, to seek the views of as wide a group of people and institutions as possible. The more debate we have, the more people will have the chance to get their heads around the ideas and the challenges, and the better the prospects for building a consensus. And we need a consensus, because only a consensus can secure public confidence that we will be introducing a package of reforms which will endure for the long term.

    We are planning a number of public engagement events over the next couple of months, building up to a large scale national event in March – a National Pensions Day. That will involve people of all ages from every section of the community taking part in simultaneous consultation events in major cities across the UK. John Hutton will be setting out today in a speech to the Work Foundation further details of our proposals for the Day.

    The work of the Pensions Commission, the national pensions debate events and our own analysis of the situation will come to fruition in the Spring, when we publish our pensions White Paper.

    In advance of this we have made clear that a package of reform which we will feel able to bring forward in the white paper will need to meet five key tests: that it promotes personal responsibility; and is fair, affordable, simple and sustainable.

    I want to comment in particular today on three of the tests, most directly impacted by the focus of this conference – on personal responsibility, simplicity and sustainability.

    Personal responsibility

    Firstly, personal responsibility. The primary responsibility for security in old age has to rest with the individual and their families. An active welfare state must provide a floor below which no-one should be allowed to fall, but its primary role must be to enable people to provide for themselves, giving everyone the opportunity to build a decent retirement income that meets their needs and hopes.

    That means we need to encourage individuals and their employers to provide for a pension that will deliver at least a minimum base load of earnings-replacement; and to provide for everyone the opportunity to save for a decent pension at the lowest possible cost.

    Lord Turner saw a major expansion of workplace savings as fundamental, recommending that all employees should be automatically enrolled into either a high quality employer pension scheme or a newly created National Pensions Savings Scheme.

    The principle of personal accounts has been widely welcomed by the pensions industry. But there is a variety of views about how that principle can most effectively be secured. We want to explore the alternatives – to build consensus by testing different ideas. That is why I invited all those in the industry who believe that they can produce a better model for personal accounts to work up the details of their alternative approach and submit them to us by the end of this week. We will be holding a joint event for all the alternatives to be presented and considered on 28 February.

    Simplicity

    Another key test is simplicity – straightforwardness for pension savers. There must be a clear deal between citizens and the State, so that people know what the Government will do for them, and what responsibilities they have in return.

    The US Social Security system provides an informative illustration. The formula for working out each person’s social security payment when they retire is quite complicated. But the shape of the system is crystal clear to everyone – and there is a very high degree of confidence on which people can base their decisions about saving. Of course, it helps that the system has barely changed in its essentials since it was introduced by F D Roosevelt’s Secretary of Labor – Frances Perkins, the first woman to serve in an American cabinet – in 1935. We need a comparable degree of confidence in our system.

    So we need clear, credible financial advice; and an important role for pensions information and pensions forecasts in showing people how much they need to save to achieve the income they want in retirement. We need better financial capability, so that people are able to plan ahead to achieve their aspirations for retirement.

    We want people to be in a position:

    – to accept personal responsibility and be motivated to take action;

    – to have realistic expectations; and

    – to make confident decisions about their long-term finances.

    The aim of our Informed Choice programme for pensions is to help people to understand the importance of long-term savings, and the value of savings they already have. We want them to know what options they have to meet any shortfall in their financial expectations for retirement.

    A third of consumers admit lacking confidence with financial affairs. To improve the position, we need to work in partnership with the financial service industry. So my department is working alongside the FSA and others on the national strategy for financial capability which Clive Briault will be speaking about shortly. I serve on the steering group for that.

    I am very pleased that the Resolution Foundation is working with the FSA at improving financial capability through generic financial advice. I welcome the focus in that work on the needs of low to middle earners. That is a crucial audience in tackling under-saving for retirement, and the key target market for any national system of personal pension accounts.

    Improving financial capability will also bring broader economic benefits. It will lower unemployment, boost people’s earnings and promote wider social benefits.

    But information alone will not remedy all the problems of consumers in financial services markets. Individuals need skills to convert basic information into effective knowledge. With those skills comes confidence to demand high levels of service from businesses. Consumers who make the right choices and can assert their needs clearly can encourage businesses to become more competitive. Confident consumers drive markets to work better, for the common good.

    I know the Resolution Foundation is exploring this area and I will be interested in any proposals being proposed in this area. Jeremy Vincent from my department will set out lessons from a DWP pilot on pensions advice in the workplace in Session 3 today.

    Sustainability

    The final test is one of sustainability – having a system that allows people to plan over the long term. The reform package must form the basis of an enduring national consensus; a system that will – like the US system – stand the test of time and not fall victim to constant modification by successive Governments. And that is key. People need to be confident that decisions they make in the next few years about saving for their retirement will still seem like sensible choices to have made, when they come to draw a retirement income on the basis of them in 20 or 30 or 40 years time.

    I’m optimistic about what we can achieve but the Government cannot solve the pensions challenge on our own. It requires all of us to work together to build a lasting settlement. I warmly welcome the contribution of the Resolution Foundation in providing potentially some critical insights for a successful package of reform.

    Thank you.

  • Stephen Timms – 2005 Speech at IPPR Report Launch

    stephentimms

    Below is the text of the speech made by Stephen Timms, the then Minister of State for Pension Reform, made at the Institute of Materials on 25th July 2005.

    Thank you for inviting me here today. I’m very pleased to have the opportunity to respond to Peter this morning and to engage in a discussion with you all on this central issue in the pensions debate. And we see raising the effective age of retirement as not just about pensions, but also as addressing the wider welfare reform challenge which confronts us. We want to create an inclusive society where we can all benefit from the skills and contributions of people who want to work but who are currently excluded from the labour market, whether their exclusion is because of their age, their lack of skills, or for any other reason.

    Age and retirement

    As the report points out, developing active labour market policies and tackling age discrimination are crucial. With over a third of men outside the labour market by the age of 60, for many the debate is not about working beyond 65, but actually about having the opportunity to work as long as age 65. We’ve made some progress on this, thanks in part to initiatives such as New Deal 50 plus. Employment rates for those aged 50 to State Pension Age have now increased by 8% in the last 10 years. There is much further to go, but there’s no dispute that we should try and get there. There is, as the report says, a clear consensus on tackling economic inactivity and breaking down the barriers facing older workers; and success among older workers will be crucial if we are to achieve our ambition of an 80% employment rate overall.

    With the introduction next year of the age component of the EU Directive on Equal Treatment, we are setting in place a legislative framework which ensures that people can not be barred from employment on the basis of age. Mandatory retirement ages below 65 will be prohibited other than in very exceptional cases. And we have been running the “Age Positive” campaign, drawing employers’ attention to the business benefits of an age diverse workforce. We have issued 130,000 copies of the Age Positive Code of Good Practice, which sets the standard for non-ageist approaches to recruitment, training, promotion, redundancy and retirement.

    There is no consensus, however, around the desirability of raising the state pension age. There is a growing recognition that working longer is going to have to be part of the solution, and we have seen in recent years an increase in the average age of leaving the workforce, after a long period when that age was falling. But many who would agree that we should be removing the barriers to working longer would strongly oppose steps to compel people to work longer, and who can blame them?

    What I think is particularly powerful about today’s report, is the way that it considers public attitudes alongside the reality of the challenges we face. The idea of having to work longer is an emotive subject – we’ve all seen the scare stories and the national newspaper headlines. The Pensions Minister who announces that “we’re going to make you work longer”, and does so without having first built a political and wider national consensus, is likely to be one person whose working life does not end up being extended!

    We need to work with people to understand the reality of the challenges that we face – and contribute to a sense of ownership of the problems and the possible solutions. That’s why David Blunkett and I are engaged in a National Debate in which we are going around the country meeting people of all ages and backgrounds – sharing the problems and listening to their views. We’ve already held events in London and Manchester and we’re in Bristol tomorrow – part of a programme that will run up to and beyond the Pensions Commission report later this year. We want to include as wide a cross-section of views as possible, including academics, trade unions and industry representatives; and we are looking for a ground-breaking political consensus from across the parties.

    Incentives to work longer

    One of the things that has been particularly striking in the early National Debate events, is the extent to which people don’t know about state pension deferral. As a result of last year’s Pensions Act, someone can choose to delay taking their state pension, and be rewarded with a higher state pension – increased by a full 10% for each year of deferral – or a lump sum of, on average after a five year deferral, £20,000 to £30,000.

    You don’t have to defer for five years to obtain a significant reward. A 65-year-old single man entitled to an average state pension of £107.45 who defers for two years would be entitled to an increased pension of over £129 a week, or a lump sum of nearly £12,000.

    People are hostile to the idea of being compelled to do something – but when it is a choice and there are clear incentives to do something, attitudes begin to change. But Peter is right to sound a cautionary note that we don’t yet know how effective these incentives will be. I was in Washington discussing pensions with policy makers in the US last week, and there it is possible to draw your state pension early, at the age of 62 rather than 65 at which the full benefit is payable, at the price of suffering an actuarially fair reduction in the pension you receive. It is striking, as Peter points out, that over half of US retirees choose to start to draw their state pension at 62 rather than waiting for the full rate which they can receive at 65.

    The choices we face

    There is no escaping the tough choices we face as a society. In 1951, just after Beveridge introduced our present pensions system, the typical man reaching 65 could expect to live only a further 11 years. In 2005 this has risen to over 19 years. Life expectancy of a 65 year old has risen by two to three months every year for the past twenty years, and there is no sign of the trend slackening off. It is a wonderful transformation, but the pensions system needs to be adjusted to reflect the new realities rather than the old ones.

    This improvement in mortality has been contrasted by a fall in birth rates over the same period. By 2052 one in four of our population will be over 65. And this is a global phenomenon, and in the UK we are better placed than in many other countries. In China, for example, between 2000 and 2050, the number of people aged 60 or over is set to increase by 250%.

    Adair Turner’s first report offered us four options. Leaving aside the option of pensioners having lower incomes, Adair left us with what’s been called an “iron triangle of choices”. We either save more and/or we increase our taxes and/or we work longer.

    But a key part of the challenge is to build a lasting solution that will work in a changing world – not just for today and tomorrow. We can’t consider these practical choices in isolation from people’s attitudes, nor without thinking about the society and the culture we are trying to build for the future.

    We want the welfare state for the 21st Century to be driven by a something-for-something ethic. Making the most of the opportunity of longer, healthier living means enabling people to contribute to society throughout their lives – not only through the workplace, but through the wider community. It’s why our “Opportunity Age” consultation launched in March, and other cross-Government initiatives, are designed to tackle the fear of isolation by encouraging and supporting older people to contribute to their communities. Only a quarter of over-60s today feel that they can influence local decisions.

    And, of course, the proportion of older people who live alone is likely to increase in the next 20 years. So encouraging older people to build alternative networks of support and interest, and tackling this sense of exclusion are crucial if we are to make the most of the opportunities for our society of increasing age.

    An asset state

    Much of what the Government has done to date has focused on tackling pensioner poverty. To prevent future poverty, the support we provide to enable people to build assets – both at an individual and a community level – will be absolutely crucial. As David argued at an IPPR seminar earlier this month, we face a new equality challenge and increasingly people’s assets are going to be as, if not more, important than people’s income.

    We need attitudes to change towards savings. There is a great need for information that people can trust. It demands that Government and the financial services industry work together with individuals, families and communities themselves to unlock the potential of an asset state.

    The Child Trust Fund, providing a Government contribution to open an account for every child born in the UK after September 2002, offers a first stepping stone to self-reliance, and a stake in the world for those without inherited assets or substantial family income. Savings vehicles like the Savings Gateway, where Government matches the saving contributions of people on low incomes for whom tax incentives for saving offer little attraction, will also play an important role in encouraging saving on the part of future generations.

    Informed choice

    Financial literacy and access to mainstream financial services have previously too often been restricted for many people on low incomes. Last December as Financial Secretary to the Treasury I reached an agreement with the banks that we would work together towards the goal of halving the number of adults in households without a bank account – and to demonstrate significant progress in that direction within 2 years.

    The quality of information that people have, and the extent to which they trust it, will be key. Whether we are talking about pensions forecasts or life expectancy statistics – if people don’t trust this information they won’t use it to change their behaviours. What more we can do to build trust is a key question for Government. But it’s not a question for Government alone. It’s a fundamental question for our communities – for our business ethics – and for the society that we build for tomorrow.

    Tomorrow’s attitudes

    We already know that tomorrow’s attitudes will be shaped by the reality that people are more likely to have ten jobs in a career than one – and they are going to demand ever greater flexibility in how and where they live and work. With increased mobility and an ever greater ability to communicate across the world, our sense of community will not just be about the geographical area where we live, but also about people and friends with whom we share interests, and aspirations for the future.

    And that’s important for the question of increasing the effective retirement age and the State Pension Age. Today’s report argues that the State Pension Age can act as a signal – impacting on the normal retirement ages set by employers and the expected retirement ages of individuals. That is undoubtedly true.

    But the report also points out the deep hostility that people have to the idea of being made to work longer. Far better, one would think, that any future increase in the State Pension Age should be underpinned by a broad consensus that reflects a change in people’s attitudes and understanding; and that any such change, if there is to be one, should be seen less as an imposition that forces people to change their behaviour than as a reflection of the new expectations of individuals and communities in a changing society.

    The State Pension Age is a very blunt tool for changing effective retirement ages. The report recognises the concerns that many of us hold over the potential inequity of raising the State Pension Age when people from less well off backgrounds often have lower life expectancy. Even in a future world where there may be fewer people doing manual work and where general improvements in quality of life could narrow this distribution of life expectancy, it’s difficult to get away from the objection that an increase in the State Pension Age would hit the poorest hardest.

    We need to be quite creative in thinking about this. If we did ultimately increase the State Pension Age, could we take steps at the same time to protect the least well off from losing out? We heard evidence in Washington last week that the Pension Credit and Winter Fuel Payments have extended lives. Do we need to think beyond the traditional concept of a State Pension Age? Could we achieve an increase in the effective retirement age by building on and extending our State Pension Deferral policy?

    Measures in last year’s Finance Act will now give people the option to work for the same employer whilst drawing an occupational pension. This will give employees greater flexibility to plan a gradual move from full time work to retirement. Could we support this with an extension of State Pension Deferral which allowed people the option of deferring some of their State Pension rather than all of it? Could we extend this concept to the State Pension Age – moving from a single date to a series of options where people are incentivised to take some or all of their State Pension later, but where the least well off are not left behind without adequate support? Are there other things we might do within the State Pension to send out the right signals and address people’s concerns about fairness?

    These are the issues we are reflecting on as the Turner Commission finished its work. I’d be interested in your views in the discussion that follows about what more we can do as a society to help people understand the challenges that we face – to show people that we have not made up or imagined the trend in rising life expectancy but we do need to address it. And crucially how we can do more to build trust – not just in Government – or even in statistics and information on life expectancy – but actually across the financial services and within communities themselves.

    And I’d be interested to know what people think about how we prepare for and shape a society that makes the most of longer and healthier lives; that enables older people to contribute fully to their communities and supports them to enjoy the independence and opportunity that we are all entitled to expect in a modern Britain.

    Increasing the effective retirement age needs to work against this background of flexibility and fairness; of community support and financial asset-building; of trust and choice. It can’t be considered in isolation from public attitudes or from the society we are trying to build for the future. But the reality of the challenges we face must shape these attitudes. I welcome this chance for a discussion and I look forward to exploring these ideas further in the coming months of our National Pensions Debate.

    Thank you.

  • Stephen Timms – 2005 Speech to NAPF Conference

    stephentimms

    Below is the text of the speech made by Stephen Timms, the then Minister of State for Pension Reform, to the NAPF Conference in Eastbourne on 17th November 2005.

    I’m grateful to Robin and Christine for the opportunity to be here this morning. I last spoke at an NAPF Conference in a rainstorm in Eastbourne, about six years ago, so I am delighted to be here on a beautiful autmunal morning today. And I’m grateful to the NAPF for all its contributions to the National Pensions Debate, on top of all the vital work it has been undertaking for over eighty years in guiding and supporting occupational pensions. We have been very appreciative of all the support and the creative generosity we have received from this Association – and from the industry more generally – in our preparation for pensions reform over the past months. And nobody who has seen the newspapers this morning will be surprised that its my view that we are going to need a good deal more support and advice in the months ahead.

    Somebody told me a story from the 1950s at one of the recent National Pensions Debate events. William was over 80. He had started work on the farm at age 10. He’d wintered it and summered it, man and boy. And one day the young farmer said to him:

    “William, you started on this farm with my grandfather, then you worked for my father, and now it’s me. 70 years faithful service. You have your State Pension I know – but I have decided to give you a few shillings a week, so that you can retire. How would you like that?”

    “All right,” William replied, “if you want me to give up, I will. But mind you, if I’d known this job wasn’t permanent – I wouldn’t have started it!”

    Actually, I haven’t found many people during the National Pensions Debate with that approach to work – my job as Pensions Minister would I suppose be a good deal easier if I had. But I do welcome the NAPF guide “Extending Working Lives: Adapting Pensions for an Older Workforce” to help trustees and managers through the age discrimination legislation and to attract a more age-diverse workforce. It’s a good example of this association supporting and encouraging the good quality occupational pensions which have put Britain in a position today where retirement incomes are better relative to everybody else than has been the case in the past, even though earnings have been rising so fast over the past few years.

    Pensions Reform

    The challenge of pension reform is one of the biggest we face in the months ahead. It is a challenge we relish, and I’m looking forward immensely to working hard with everybody here to get the key judgments right over these next few months. How to ensure we achieve a long-term approach balancing adequacy with affordability; continuing our successful drive to reduce pensioner poverty; making the system more understandable but also correcting historic unfairness, such as the way women have lost out because of a 1940s view of women as being dependent on their husbands.

    Our aim is a ground-breaking political consensus, and we hope the National Pensions Debate will help us achieve it, working with MPs from all parties, not because we want to avoid a row, but because only a consensus can deliver the confidence – that we see as vital – that we are introducing a framework which will endure. We want to engage with insiders, experts in this association and elsewhere, and also with those who have never thought about pensions in their lives before but are increasingly realising how important it is for their future that we get these judgments right.

    I am very enthusiastic about the task ahead, so that we can come forward with the Government’s response to the Pensions Commission report by about the Spring of next year. And I am looking forward to actually reading the Pensions Commission report – published in just under two weeks time – and comparing the real thing with the newspaper reports which have appeared today!

    And once the report has appeared, we need to step up the debate in which with its proposals for a citizens’ pension this association has played such a creative part.

    Occupational provision

    Whatever the form of the state underpin which is adopted, it will for most people be the savings they make on top which will determine whether they achieve the income in retirement which they are aiming for. This has been the rationale for all our informed choice measures designed to inform people and make it possible for them to take control of their retirement planning.

    As we embrace social and economic change; as people find themselves doing ten jobs in a career instead of one – or even having several careers – the support people require to stay in employment and to build their retirement income must also adapt to reflect fundamental changes in our society.

    That’s why we are renewing the welfare state – with welfare reform proposals in the New Year that will go further in tailoring the support we provide to meet the new demands of individuals in the 21st century. And it’s why concepts such as portability and risk-sharing are becoming increasingly important for the success of private pension provision.

    But two truths remain. First – work is the best pensions policy. We can’t tackle inequality of outcome in retirement without also tackling inequality of outcome during working life. And the workplace is the key. That’s why our aspiration of an 80% employment rate is so important. And we’re making progress – yesterday’s employment statistics showed the national employment rate back up to within a whisker of 75% – with 123,000 more people in work this quarter and over 330,000 more than last year.

    The shape of the welfare state is crucial in the way we support people to prepare for retirement. To meet the challenges of supporting an ever healthier – but ever older population – we can’t afford to be denied the skills and contributions of all those who can and want to work. Our welfare reforms will be designed to capture this potential. The reforms will develop active support to help people contribute; they will be underpinned by the values of inclusiveness; they will balance rights and responsibilities. Respect for the individual will be matched by respect by the individual for society; and the need to help people lift leave dependency behind while continuing to provide support for those who simply can not work.

    In all of this, nothing can be allowed to detract from the paramount importance of employer-sponsored pension provision. Employers are key and will continue to be the key to successful long-term pensions reform. It is impossible to envisage a successful future pension system which does not have a central role for employers at its heart.

    The evidence speaks for itself. In 2004, nearly 80% of funded pension contributions came from employers. An employer contribution adds value to the pensions saving of an individual – and it acts as a catalyst for action from the employee too.

    Research published earlier this month shows that with little or no employer contribution, the provision of information and advice alone in the workplace had very little impact on savings behaviour, on pensions knowledge or on attitudes towards pensions. It is very striking that the average take-up of a stakeholder pension where there is an employer contribution is around 70%. Where there isn’t a contribution it’s 13%.

    Today’s NAPF survey again shows that participation rates are higher where employers operate auto-enrolment. Our own case study research has also shown auto-enrolment to be effective for increasing pension scheme membership, reducing administrative burdens for employers and pension providers and also making the whole process simpler for employees.

    So I’m grateful to NAPF for vital pro-active work in supporting occupational pensions and in offering guidance to schemes to help them understand – and sometimes benefit from – new legislation. The new NAPF guidance on clearance is a good example. And all that work is going to be just as vital to our success in the future as it has been in the past.

    Better Regulation

    The contribution of the new Pensions Regulator is making sure that pension liabilities are being treated with a new seriousness today, and that is very welcome, but it isn’t blocking corporate re-structures. The case of Marconi is particularly encouraging – the takeover has gone ahead in a way that promises opportunities for employees; the shareholders are satisfied; and the trustees, who took independent advice, are also satisfied there will be appropriate protection for members’ benefits.

    The Pensions Regulator will continue to examine each case individually, to find solutions to enable corporate activity to go ahead, while ensuring that scheme members benefits are protected. And that balance of economic dynamism with protection of members’ benefits is a key one.

    The introduction of the Pension Protection Fund has provided a new and vital security for pension scheme members, helping build a renewed confidence for the future. I know that the board of the Fund understands very well how important their decisions about the Fund levy will be for all the schemes represented here, following the recent consultation.

    Your survey today shows that the regulatory burden is one of the main concerns that schemes have over the next few years. We are determined to remove unnecessary regulation and simplify regulatory burdens wherever we can. We have set out one of the most radical programmes of regulatory reform anywhere in the world.

    Over the next three or four years, this will deliver year on year reductions in administrative burdens. We will set targets for reducing the burdens arising from requirements for businesses to provide information. A rolling plan of simplification will focus on removing or merging regulation into a more manageable form; resolving overlap and inconsistency; and wider deregulatory measures too.

    We can’t do this on our own – and we don’t want to try to. We can only get this balance right with your support. That is why I’ve established a Better Regulation Stakeholder Group with representatives of the pensions, insurance, and financial services industries. I’m pleased that Joanne Segars is a member of it and has volunteered to sit on the sub-group looking at the measurement of information burdens. We need all the help we can get to deliver the simplification that all of us want to see. So I will welcome from anybody here thoughtful, practical proposals for removing and simplifying regulatory burdens.

    Setting up the new Trustee panel is another example of our seeking to keep under review the balance between regulation and member protection. Most recently our discussions of the draft Member-Nominated Trustee regulations really brought home to me the panel’s value. The members of the panel see issues from a more direct and personal perspective which is of great benefit to me and my officials. It gives me the opportunity of a reality check on some key issues of the moment. And its their view about what is important – I don’t set the agenda, it is very much their forum.

    Socially Responsible Investment

    That previous NAPF conference I spoke at was at the point where the Disclosure Regulations on Socially Responsible Investment were about to come into force. In my Ministerial roles across government since then I have maintain my interest in socially responsible investment and corporate social responsibility, and now back at DWP I am keen to see how the disclosure measure has worked in practice and what we can do to move things forward again.

    Conclusion

    So I am looking forward immensely to working with everybody here to strengthen and renew workplace pension provision, and to strike the right balance between regulation and protection.

    We need the NAPF to be banging the drum for occupational pensions in the coming months – and I know I can count on you to deliver. In supporting employees who choose to work longer; through a renewed welfare state that enables people to lift themselves out of dependency; through contributing to and supporting employees in building their retirement savings – in all these respects, the workplace holds the key to the challenges of an ageing society.

    If together we can harness the potential of the workplace:

    – we can give people the support they need to escape long-term dependency

    – we can empower people to take control of building an income for their retirement

    – and we can look forward with confidence to the benefits and opportunities of longer and healthier lives.

    We can build a new framework for pensions in the UK which will endure for the long term. I’m up for it. I know you are too. Let’s work together.

    Thank you.

  • Stephen Timms – 2005 Speech to Employers Forum

    stephentimms

    Below is the text of the speech made by Stephen Timms, the then Minister of State for Pension Reform, on 22nd November 2005.

    I am pleased to be here this afternoon and let me begin by expressing on behalf of my department by expressing the high value we place on the help and support we have received from the Employers Forum on Age over a number of years – and express our thanks for the partnership which we look forward to continuing for many years to come.

    Life expectancy has been going up by two or three months every year for 25 years or more – and there is no sign of that trend flattening off. It is a wonderful transformation which means better life chances for all of us – and it is arguably the greatest achievement of our civilisation. But to make the most of the trend, we need to ensure that older people can continue to contribute for longer to our national life – for their benefit, and also because the economy is going to need them.

    The Office for National Statistics has today published its new report “Focus on Older People”. It looks at demography, family and living arrangements, housing, employment, health, lifestyles, income and expenditure and it contains a wealth of fascinating detail. It’s accessible on the ONS website. The rising proportion of older people is very important as a backdrop to the activities of many parts of Government – the report points out that there are 20 million people aged 50 and over today – and John Hutton as Secretary of State will be the chair next month at a dedicated Cabinet Sub-Committee for older people which is going to be leading the Government’s response to the challenge.

    I want to set out today our strategy to increase the opportunities for working longer; how we are taking it forward through three separate strands or work. It is a key issue not only for business success but also – as we were reminded last week – for pensions reform.

    Opportunity Age

    We published our cross Government strategy for older people, ‘Opportunity Age’, for consultation earlier this year, looking 10 to 15 years ahead. In his introduction, the Prime Minister made the point:

    “the reality is that, as older people become an ever more significant proportion of the population, society will increasingly depend upon the contribution they can make.”

    The question is how can we realise that potential?

    Demographics

    People are now living longer than ever before. And leading healthier lives. They are also spending longer in retirement. In the 1920s when the retirement age of 65, was introduced, the average life expectancy of a man was about 58. Now on average a person reaching the age of 65 can expect a healthy life to the age of 76, with average life expectancy higher still.

    Extending working life first objective

    The first strand is to remove the barriers to employment for older people and create more opportunities for them to work and save for longer. It has been striking in the National Pensions Debate over these past few months that everyone agrees that barriers to working longer should be removed.

    The employment rate for over 50s has risen significantly since 1997. 71% of those aged 50 to state pension age were in employment in Spring this year – and, in addition, over 1 million more people aged over state pension age are in work, many of them part time or self-employed. But we still have a big challenge of over two and a half million people aged 50 to state pension age who are out of work, and we need to be doing better.

    Many are out of the labour market for health reasons. Through our Pathways to Work pilots we’re testing better ways of helping people who claim sickness benefits to re-enter the labour market more quickly – and we have seen some dramatic improvements in the pilot areas. The more active approach we have been developing is clearly part of the solution.

    We have been looking at how to bring together support from the health service with employment help. One of the Dragon Awards presented each year by the Lord Mayor of London was made last month to a GP practice in Camden which has an employment adviser based in the GP surgery. One of the GPs at the practice commented that the initiative had – and I quote – saved:

    “an average of five consultations for every patient that wants to explore the possibility of getting back to work, or wants education and training advice. It has had a significant effect on the mental and physical well-being of patients, … lowered the amount of drugs, largely antidepressants, prescribed to patients [and] helped many people, who have been unwell but are willing to work, to change their lives.”

    These types of new partnership are going to be part of the answer.

    We know that, as well as the opportunity to work, older people need appropriate skills to work. We’re working closely with the Department for Education and Skills. For example, the New Deal for Skills, particularly skills coaching for people out of work and the Employer Training Pilots for those in work, will enable us to test new ways of improving availability of training needed by individuals and businesses, for the benefit of older people among others.

    Extending working life second objective

    The second strand is to create a culture change around retirement age and working longer, to tackle discrimination and to encourage positive attitudes to older workers.

    Our Age Positive campaign has been tackling age discrimination in employment since 1999.

    But more recently the announcement of age legislation prompted a growing call from employers – especially small employers – for more practical information and help. So we invited leading business organisations to work with us on guidance for the coming legislation, and to contribute to a short burst, high profile awareness and guidance campaign, to help employers adopt non-ageist practices in the run up to next October. The Be Ready campaign as it is called aims to change employers’ attitudes to age by challenging traditional views on subjects like occupational health, training, recruitment and retention, and encourage more flexible employment and retirement opportunities.

    The Be Ready materials, launched last May, include best practice examples, case studies and research that we’ve developed with many employers to help bust the myths around age. They also contain more in depth guidance on the workforce management practices of Age Positive employer champions and the business benefits they experience. The materials are proving popular and the feedback has been very positive.

    In the Spring, we’ll be updating the guidance with more information on flexible working and phased retirement opportunities, together with information about the legislation. Employer Forum on Age is contributing to the guidance with research with employers on their flexible retirement practices and procedures, to take advantage of changes in the pension tax rules from April and in preparation to comply with the new legislation from next October.

    EWL and pensions (EWL third objective)

    So the first two strands are removing the barriers to over 50s employment and promoting culture change. The third strand to extending working life is providing the incentive, and this we are primarily tackling through changes to the pensions system.

    Our State Pension deferral policy has, from April of this year, increased the rewards for people choosing to work whilst deferring their state pension. So if you defer now for a year, then the state pension – that is basic state pension plus SERPS or State Second Pension – are increased by 10%. If you defer for another year, its another 10%. All the research shows that is a pretty attractive package for quite a lot of people – and for the first time there’s the option of taking a lump sum payment instead. We will be working to make those options better known over the next few months.

    The tax simplification measures from April next year will mean that, for the first time, where scheme rules allow it, it will be possible to carry on working for the same employer whilst drawing from the employer’s occupational pension scheme. We’ve amended legislation to raise the minimum age at which personal pensions can be drawn from 50 to 55 years by 2010.

    Pensions reform

    In all these areas and across pension reform, our aim in pension reform is to engage in a national debate and to build consensus for a long-term pension settlement. That is not because we want to avoid a row, but because we think that consensus will be tremendously helpful in building the new confidence that we need around pension saving, that we are putting in place a new framework which will endure. We set out our principles for pension reform in February, for a system that tackles poverty effectively and provides opportunity for all to build an adequate retirement income.

    The debate will no doubt reach a new and higher level when the Pensions Commission report is published a week tomorrow, and I welcome the wide interest there already is in what the Pension Commission is going to say. We will then want to analyse the evidence and consider the options and recommendations made by the Commission, drawing on the views expressed in the National Pensions Debate and the response which will be made to the Commission report, and respond next year with proposals for reform which I hope will command as broad consent as possible.

    Conclusion

    To improve radically the retention rates of older workers we need employers to increase the availability of flexible work and retirement opportunities, and so to help retain those at greatest risk of leaving prematurely and enable others to stay on beyond State Pension Age. A combination of active labour market strategies, removal of structural financial barriers and the greater availability of flexible work and retirement patterns will make it possible for a lot of people to stay in work longer and potentially to save for longer.

    We recognise there is a need for help in how to retain older workers. I have commended to you the products of our Be Ready campaign. I hope companies will include older workers in all employment practices. Ensure they benefit from the training and promotion opportunities offered to younger staff. Make sure you have policies to manage poor performance and health issues. And be flexible and communicate with your employees. Make them aware that as an employer you value the diversity created by a mixed age workforce and offer alternatives to that cliff edge of retirement.

    There are some key steps here to unlocking substantial gains for individuals, for businesses and for the economy as a whole. I hope we can work together as we learn how to make the most of these opportunities over the months ahead.

    Thank you.

  • Stephen Timms – 2005 Speech to ABI Saver Summit

    stephentimms

    Below is the text of the speech made by Stephen Timms, the then Minister of State for Pension Reform, to the ABI Saver Summit on 5th December 2005.

    I’m very pleased to be able to join you this morning at what is unquestionably a crucial point for pensions reform. And I want to acknowledge the way in which the Saver Summit has established itself as a central forum for the pensions industry to come together and focus on the challenge of helping people save adequately for retirement. Following publication of the Pensions Commission report last week, the importance of pensions reform has perhaps never been higher on the public policy agenda.

    Building on progress so far

    Our 2002 Green Paper first highlighted the need for people to save more or work longer to achieve the retirement income they want and expect. It established the Pensions Commission to review long-term progress. And last year, in its initial report, the Pensions Commission calculated that nearly 10 million people are not saving enough for their retirement. I’ll be interested to see the findings of your annual State of the Nation’s Savings report when the results are published later today.

    But the scale of the challenge we face is clear. I don’t intend to focus on that this morning – except to make two important points.

    Firstly that we have made significant progress over the past eight years. It was right to focus on the short-term crisis of pensioner poverty that we faced when in 1997. In lifting nearly 2 million pensioners out of absolute poverty; in spending £11 billion extra each year on pensioners with almost half of the extra going to the least well-off third; in virtually eradicating abject pensioner poverty; in making all those improvements we have built a foundation on which to encourage people to save. Pension Credit has been instrumental in achieving this progress, and it also means that, for the first time, people with modest private savings could be rewarded rather than penalised pound for pound for the savings that they had made.

    Our focus today on encouraging people to save more would have made no sense in a world where large numbers of single pensioners were living on £69 a week, and all of them faced the disincentive to saving of pound-for-pound withdrawal.

    Progress in boosting confidence in private pensions has also been crucial in building a foundation for long-term change. Last year’s Pensions Act – establishing the Pension Protection Fund, the Pensions Regulator and the Financial Assistance Scheme – addressed directly the problems in defined benefit occupational pensions, boosting confidence and security for pension scheme members. And the introduction of the Sandler Suite and the Stakeholder Pension has also been an important step in facilitating low cost private savings.

    These are the measures which have provided the platform on which now we can build a pensions settlement that will endure for the long-term and provide security in retirement for generations to come.

    But my second point is perhaps a more important one. That is, that a great deal of the progress we have made so far, especially in terms of private saving, is a result of the partnership between Government and the industry.

    The ABI has been a very important partner for us – in advancing the informed choice programme; leading the consortium on the Pensions Information Pack; working with the Association of Independent Financial Advisers on the new fact sheet on contracting out; supporting the Financial Services Authority in its strategy for financial capability; and responding to our consultations.

    I want to express thanks to the ABI and to the industry as a whole for continued support in our work on pensions reform. We need the voice of industry to be at the heart of our response on the report of the Pensions Commission. The success of long-term pension reform will hinge on Government and the pensions industry working together with employers and employees. We are appreciative of the support so far – and we are going to need a great deal more support in the months ahead.

    The Pensions Commission report

    By now, everyone will have had the chance to at least take a first glance at what the Pension Commission recommended last week. The Commission – a former CBI Director General, a former TUC President and a distinguished Professor at the London School of Economics – produced an impressive unanimous report. I would characterise it as comprising essentially four bold ideas:

    1. Auto-enrolment into a national system of personal accounts;

    2. Mandatory matching employer contributions amounting to 3% of salary;

    3. Basic state pension linked from 2010 to earnings rather than prices;

    4. A gradual increase in state pension age in line with rising life expectancy, starting with a rise to 66 during the 2020s.

    The Commission has done a very impressive job. They have sifted a lot of evidence; they have weighed a great variety of opinions; and they have carried out a lot of impressive analysis of their own. They have produced a set of recommendations which address the concerns people have been raising and which hang together in a coherent way.

    We welcome the broad framework of the Commission’s proposals and options – and we believe they are the right basis for the debate to come. There is much to be discussed and decided on the detail of that framework and our response must meet the five tests we have set out – that is that our overall package of reforms must promote personal responsibility; must be fair, affordable, simple and sustainable.

    We are now going to be studying the recommendations very carefully. I hope that everyone else will study them carefully as well, and let us know what they think.

    The next steps

    The Pensions Commission has called for a national debate about the right way forward and that it should start as soon as possible. We are going to be stepping up the National Pensions Debate – talking to people of all ages and in every section of our community. And our intention is to come forward in the Spring with Government proposals for reform, which I hope will be on the basis of as broad a consensus as possible.

    The Pensions Commission were very clear in their first report that there is not a pensions’ crisis now. But the pensions of tomorrow depend on the decisions people make to save today. They argued that the failure to respond to this challenge would lead to a crisis in 20 years time. If we do nothing, future pensioners will be 30% worse off relative those in employment, than they are today.

    So we need to study the Commission’s recommendations in care rather than in haste – but we can’t afford to put off our response to the challenges they have laid out. We need to build on what has been achieved and ensure now that people can plan with confidence decades ahead for retirement.

    A challenge to ABI

    Each of the bold ideas proposed by the Commission raises a host of questions which will need to be answered over these coming weeks. The ABI – together with the NAPF and others – have welcomed the principle of personal accounts, but questioned the particular form described by the Commission as the National Pensions Saving Scheme. The Association takes the view that – given a level playing field – it can put together an industry-led model which will do the job better.

    Today, I want to issue a challenge. To the ABI, and all those in the industry who take the view that they can produce a better model for personal accounts. I want to challenge you to work up the details of your alternative approach by February in the new year. Then as part of the National Pensions Debate I’m going to ask the ABI to host a joint-event with Government for you to present your alternative model.

    There are two principle criteria that any alternative model must meet. Firstly, it must achieve a radical extension of coverage – to include many who have lost out before, such as lower and moderate earners, the self-employed and those working for small employers. And secondly, it requires a radical reduction in cost – in terms both of low management charges and of reduced administration costs for business.

    To achieve a major expansion of workplace savings, the model also needs to reflect changes in the workplace. So portability, reliability and speed of delivery will also be important.

    But if you can present a detailed, workable model that meets these criteria and can match the Turner version for a comparable level of charging, then that will be very attractive to us in Government. The decision when we make it will be a pragmatic one. We are serious about building consensus, and we are in no doubt as to the potential attraction of an industry-led model.

    We also mean what we say about getting on with reform. The choice is over how we act – not whether or when. With our aim of a White Paper in the Spring, we need to move quite quickly to develop the elements of a reform package which can be widely supported. So I am asking you to come forward with the model in February.

    I hope you will work with my officials at the earliest point in building up the detail of your ideas. The prize here is not for any one individual or group, but for society as whole – when we deliver a radically new savings product extending to everyone the opportunity to save affordably for a pension.

    Conclusion

    I hope you will also engage with us as we debate the other elements of a long-term settlement – and as we assess the right balance of State pension support to underpin a rapid expansion of private saving. We need a solution which is affordable to the public finances. The next few months are going to be crucial for everyone who wants a long-term, sustainable pensions settlement. There is a big prize available and its one we are determined to win.

    So my appeal is that we should be working together over these critical next few months –the financial services industry, Government, employers large and small and trade unions. A long term settlement represents a great opportunity for all of us. Let’s make sure we achieve it.

    Thank you.

  • Stephen Timms – 2000 Speech to British Insurers

    stephentimms

    Below is the text of the speech made by Stephen Timms, the then Financial Secretary to the Treasury, to the Joint Association of British Insurers / British Venture Capital Association Conference on 29th February 2000.

    Introduction

    Thank you for inviting me to speak, and for organising this conference, on what is an extremely important issue for our economy.

    Let me just first set this in the context of the government’s wider aims.

    My favourite way to explain what this Government is trying to do is that we are building a new Britain which will be modern and decent – fair and enterprising – both of those things at the same time.

    The first economic priority after the election was to achieve a new stability in the UK economy after decades of boom and bust. That has been achieved in a remarkable way, so our focus now is on locking in that hard won stability, and building on it for the future. It gives us the chance to express a new optimism about the future, and so the Chancellor set out at the Pre-Budget Report in November four new ambitions for Britain in the coming decade which encapsulate what we are trying to do:

    That we should be closing the gap with our competitors on productivity after years of slipping behind;

    That we should have a higher proportion of the workforce in employment than in the past, and keep it like that. Actually, we already have more people in work than ever in our history, but we want to achieve the highest proportion and on a durable basis;

    That for the first time over half of our school leavers should go on to study for a degree;

    That we should halve the number of children living in poverty, on the way to the Prime Minister’s target of eradicating poverty altogether within 20 years.

    The Chancellor this morning, speaking in my area in East London, set out more of his thinking along those lines as he prepares for the budget in three weeks time.

    Institutional investors have a key role to play in making all this happen, providing the finance so that our high-growth businesses can become world-class businesses.

    I want to speak briefly about the key building blocks we are putting in place, building on this new foundation of stability, to create a new culture of enterprise and entrepreneurship; where institutional investors can flourish and contribute – with private equity and in other ways – to the changes we are working to achieve.

    Competition

    The first building block is the most pro-competition policy in the world. Greater competition at home is the key to greater competitiveness abroad. So we are asking in every area what we can do to enhance competition and opportunity. We are building on the decision to create a new independent competition authority with our new Competition Act which contains new powers to prohibit anti-competitive practices.

    For cartels and anti-competitive behaviour, the Office of Fair Trading will be given new investigative resources and trust-busting weapons, including the power to impose fines of up to 30 per cent of turnover.

    For banking and financial services, the Financial Services Authority will now, for the first time, be required to facilitate competition – with a new scrutiny role for the competition authorities.

    For the regulatory system, the government will consider how to scrutinise regulatory bodies and review existing and proposed regulations to ensure that they are promoting – not impeding – new entrants and new investment, and the joint work by BVCA, ABI and NAPF will feed into this process.

    In sum, Britain is open to competition, and at the leading edge of change. And nothing should stand in the way of greater competition in every sector of every industry.

    A more favourable tax environment

    A higher degree of enterprise calls for higher levels of investment and entrepreneurship. So our second building block is the best tax environment for investors in start-ups and high tech businesses, with improved rewards from enterprise and wealth creation. On tax a great deal is being done:

    On business tax, we have already cut small business tax from 23p to 20p and introduced a new starting rate of tax for small companies of 10p in the pound. Every company making profits of up to 50,000 pounds will benefit.

    Corporation tax has been cut from 33 to 30 per cent. To encourage and reward new business investment, we have cut the long-term rate of capital gains tax from 40p to 10p. We have proposed a cut in the taper so that those investing for five years will pay only 10p and for three years only 22p. Final decisions – following our public consultation – will be announced in the Budget.

    A new R&D tax credit will, from this April, also mean that nearly a quarter of new investment in small and medium-sized business research and development is under-written even before a penny profit is made.

    The Budget will introduce a new tax incentive to promote corporate venturing too. Large companies investing in growing companies for a specified period will receive a tax relief of 20 per cent, underwriting one fifth of their investment. This 100 million pounds incentive can bring Britain additional investment of 500 million pounds every year.

    We need to encourage those who already have a successful track record to play a key role in building up small high-risk companies. We recognise the significant role stock-options have to play here and we are currently looking at the role of employer NICs charges which we know is causing concern particularly in the entrepreneurial community.

    We are introducing a new targeted tax cut for people with skills and talent who are prepared to move from safe, secure jobs to risk time, effort and savings to create wealth in a more challenging environment. From next year, a third approved option scheme, the Enterprise Management Incentive, will enable growing enterprises to offer their key employees tax-advantaged options over shares up to £100,000.

    That measure reflects our recognition that nearly a quarter of all UK business failures are thought to be directly attributable to poor management practice. For Britain to succeed in the knowledge driven economy we need to raise our game. We want to take steps to ensure that our smaller firms can recruit and nurture the best talent, rewarding the real risk takers who are creating wealth and jobs.

    Venture Capital

    Turning to private equity and venture capital – the particular interest of this conference – we want new encouragement from the venture capital industry and from institutional investors for investment in start up and early stage ventures. The problem here is not so much access to finance but finance on the right terms.

    We have already the best developed venture capital market in the Europe, and we are the focal point for US investors looking for access to Europe=s growth companies.

    Our venture-backed growth companies are proven job-creators. Between 1993 and 1997, employment in VC-backed companies rose by 24 per cent compared with one per cent for the economy as a whole.

    BVCA’s own survey of the economic impact of venture capital showed that VC-backed companies now account for 2 million jobs in the UK, or 10 per cent of the private sector workforce.

    Venture-backed growth companies are also proven sound investments, as the record of overseas investment demonstrates. The last speaker (Anne Glover) also showed that returns to early-stage investments are increasing.

    In 1998, overseas sources provide three times as much finance for VC-backed companies as UK sources. Overseas pension funds are now the largest single source of funding for our VC-backed firms, and overseas banks are the second largest source. I was in Cambridge a few weeks ago and the venture capital specialists I met there made the point that there was a very high level of interest from elsewhere in Europe in venture investment in start up firms there.

    UK pension funds invest less than one percent of their money in venture capital. In the US, the comparable figure is closer to six per cent. And in 1998, UK insurance companies represented only 3 per cent – £152 million – of money raised by the UK venture capital industry.

    We cannot – neither would we want to – make UK insurance funds invest more, but I would encourage them to look very carefully at all their options and make sure they are alive to the opportunities around.

    Last year, following a speech by the Prime Minister, three leading consulting actuaries and benefits consultants (Bacon and Woodrow, William M Mercer and Watson Wyatt Partners) welcomed the Government’s call for a more enterprising approach to the investment of institutional assets. They considered that the time had come for some institutional investors to put more emphasis on other opportunities, particularly unquoted securities. We will shortly be discussing with the actuaries concerned what the response has been.

    To help institutional investors take the leap to invest in early-stage venture capital, we are taking forward a UK High-Technology Fund and nine Regional Venture Capital Funds to invest in early-stage high growth businesses which have historically found it difficult to raise finance. The funds will be run by experienced fund managers and will complement existing market provision, using public resources in partnership with private sector funds to address recognised gaps in the market. And all the funds will invest on a wholly commercial basis, expecting robust commercial returns.

    Making Britain the knowledge capital of the world

    The third building block for our enterprise Britain open to all is to make Britain the knowledge capital of the world.

    Knowledge is the key to future business success. Our future competitiveness and prosperity will be directly related to our creativity, our imagination and our knowledge base. That puts a great premium on education and skills. I have visited a number of our universities in recent weeks ­ Cambridge, Oxford, Warwick, Newcastle, Durham, Sheffield ­ to have a look at what they are doing to commercialise the superb research which is being undertaken by them and I have been heartened by what I have seen.

    That premium on education and skills in the modern economy is exactly why we are pushing through huge educational reform, investing an extra 19 billion pounds in education – so that everyone has the opportunity to master the skills and technologies of the new information age.

    In 1997, barely one in ten schools was connected to the Internet. Now, two thirds are – the most in any G7 country. The number of primary schools connected has gone up four fold in the last year. By 2002, every school will be connected.

    And this year, we are working to raise education levels amongst adults: a whole network of adult learning centres is being created; incentives are being provided to upgrade skills; and a new University for Industry which uses internet and digital TV technology will be bringing education into the home and workplace.

    These reforms will help in the next stage of the technological revolution which we are determined to lead.

    Our target is that within three years we want to become the world’s best environment for e-commerce. This is a huge challenge for everyone: Government needs to put in place the right framework and lead by example; individuals need to get skilled; and business needs to be confident and sufficiently ambitious to grasp the new opportunities.

    Conclusion

    There is a great deal at stake in getting all of this right. But we are optimistic.

    We have started with a foundation of a new stability which we are determined to lock in. The building blocks we are putting in place now for an enterprise Britain open for all – in competition, in investment and enterprise and in the knowledge economy – those building blocks will help British investors and entrepreneurs make the most of the challenges ahead.

    Thank you for the contribution you are making, and let’s work together to make this a success for all our people.

    Thank you.

  • Margaret Thatcher – 1992 Speech on the European Community

    margaretthatcher

    Below is the text of the speech made by Margaret Thatcher at The Hague on 15th May 1992.

    INTRODUCTION

    Mr Chairman,

    We are fortunate to be meeting in the Hague, a beautiful city kept beautiful by a country which values its architectural heritage.

    Goethe described architecture as ‘frozen music’.

    And in a city like this it is not hard to imagine the grand symphonic melodies and subtle chamber music harmonies that might be released if we could defrost the Town Hall, the great urban squares, or some of the smaller side-streets.

    Because it is a public art with which we all have to live, architecture tells us a lot about ourselves, about our idea of God, about our relationship with our fellow-men, about our vision of Man’s destiny.

    The great medieval cathedrals gave us an exalted spiritual view of Man’s place in a universe governed by an all-loving and all-seeing Creator.

    The Age of Reason pictured civilised man in a neat geometrically ordered landscape dotted with neo-classical structures at regular intervals — with no more than one small folly to each estate.

    The revival of Religion and Moral Seriousness under Queen Victoria saw also a Gothic Revival that again pointed man’s eyes heavenwards.

    And in our own day, the vision of New European Man walking purposefully towards the Common Agricultural Policy was exquisitely realized in the Berlaymont building in Brussels.

    What music would Goethe hear if he could look upon the Berlaymont, perhaps while acting as an advisor to the Commissioner responsible for developing a policy for European culture (which has languished so long without one)?

    Surely the music would be something atonal and very long, perhaps performed by an orchestra including vacuum cleaners, scrubbing boards, and taxi-horns, with Songs of Harmonisation sung by a mixed choir from the Paris School of Deconstructionism.

    And what a climax of discord and disharmony!

    For the Berlaymont — its halls lined with cancer-causing asbestos — is to be pulled down.

    We might say of such architecture that it is modern in conception, but uncomfortable to live in, and likely to fall down in a few years.

    But is it even modern in conception?

    It was once.

    But look at the architecture of the last fifty years — look, in particular, at the architecture that went beyond the modern to the futuristic.

    It was certainly a very dramatic architecture but the one thing it no longer expresses is the Future.

    What it expresses is yesterday’s vision of the future — one captured by the poet John Betjeman in 1945:

    “I have a vision of the future, chum.

    The workers’ flats, in fields of soya beans,

    Tower up like silver pencils, score on score.”

    But the Berlaymont school of architecture is a convenient symbol for the political architecture of the European Community.

    For it too is infused with the spirit of “yesterday’s future.”

    Mr Chairman, the European Community we have today was created in very different circumstances to deal with very different problems.

    It was built upon very different assumptions about where the world was heading.

    And it embodied political ideas and economic theories that in the light of recent history we have to question.

    Today I want to do exactly that. In particular, I shall try to answer three questions.

    First, how can we best deal with the imbalance in Europe created by the re-unification and revival of Germany?

    Second, how can we reform European institutions so that they accommodate the diversity of post-Communist Europe and be truly democratic?

    Third, how can we ensure that the new Europe contributes to — rather than undermines — the world’s economic prosperity and political stability?

    Our answers to these questions can no longer be bound by the conventional collectivist wisdom of the 1940’s and 50’s.

    That is yesterday’s future.

    We must draw on the ideas of liberty, democracy, free markets and nation-hood that have swept the world in the last decade.

    THE BEGINNING OF THE COMMUNITY

    The European Community which we now have was set up for circumstances that were quite different from those of to-day.

    It was Winston Churchill who, with characteristic magnanimity in 1946, with his Zurich speech, argued that Germany should be rehabilitated through what he called ‘European Union’ as ‘an association between France and Germany’ which would ‘assume direction’.

    This could not be done overnight, and it took American leadership.

    In 1947, after travelling through Europe in that terrible winter, when everything froze over, George C. Marshall , the then Secretary of State, promoted the idea of American help.

    Marshall Aid was administered by institutions set up ad hoc.

    The initial impetus was for European recovery.

    It owed much to simple American good-heartedness.

    It owed something to commercial calculation — the prosperity of Europe, in free-trade conditions, would also be the prosperity of America.

    But the main thing was the threat from Stalin .

    Eastern Europe had shown how demoralized peoples could not resist cunningly executed Communist take-overs, and Marshall Aid was intended to set western Europe back on its feet.

    It was a prodigious success. Who, in 1945, would have guessed that defeated and ruined Germany would, by 1951, be exporting more than the British?

    But we have found, again and again, that institutions devised for one set of problems become obstacles to solving the next set — even that they become problems in their own right. The Common Agricultural Policy is one such.

    As originally devised, it had a modest aim that was not unreasonable.

    Over-numerous peasant farmers had been unable to earn a decent living between the wars, and in those days subsidy and regulation were the conventional wisdom.

    We in Great Britain had not suffered nearly as badly as our continental neighbours, because we had, even in 1900, almost no peasants: nonetheless we had, in the 1930’s, a Milk Marketing Board which was supposed to control prices, and therefore had the precise function of not marketing milk — instead, pouring it down mine-shafts and regulating various cheeses out of existence.

    Yet we all know that the CAP, is now an expensive headache, and one quite likely to derail the Uruguay Round.

    Because of agricultural protection we stop food-imports from the poorer countries.

    They themselves are nowadays vehement supporters of market-principles: it is from the Cairns Group of developing countries that you hear demands for free trade.

    Yet in the industrialized part of the world, the tax-payer and the consumer stump up $270 billion in subsidies and higher costs; and the World Bank has calculated that, if the tariff and other barriers were cut by half, then the poorer countries would gain at once, in exports, $50 billion.

    In case you might think that these sentiments are somehow anti-European, I should say that they come from an editorial in the economic section of the Frankfurter Allgemeine Zeitung of 4 May.

    Here we have a prime example of yesterday’s solutions, becoming to-morrow’s problems.

    You could extend this through the European institutions as a whole.

    They were meant to solve post-war problems, and did so in many ways extremely well.

    Western Europe did unite against the Soviet threat, and, with Anglo-American precepts, became free and very prosperous.

    That prosperity, denied to the peoples of eastern Europe and Russia, in the end caused demoralization among their rulers, and revolt from below. We are now in a quite different set of circumstances, with the Cold War over.

    Looking at European institutions today, I am reminded of a remark made about political parties in the French Third Republic.

    Some of them had names which reflected radical republican origins from the 1870’s, but years later they had become conservative.

    These radical names, ran the remark, were like the light reaching Earth from stars that were long extinct.

    Equally with the end of the Cold War we have to look again at the shape of Europe and its institutions.

    THE GERMAN QUESTION

    Mr Chairman, let me turn first to the new situation created by the re-unification of Germany.

    And let me say that if I were a German today, I would be proud — proud but also worried.

    I would be proud of the magnificent achievement of rebuilding my country, entrenching democracy and assuming the undoubtedly preponderant position in Europe. But I would also be worried about the European Community and its direction.

    The German taxpayer pays dearly for its place in Europe.

    Britain and Germany have a strong joint interest in ensuring that the other Community countries pay their fair share of the cost — and control the Community’s spending more enthusiastically — without leaving us to carry so much of the burden.

    Germany is well-equipped to encourage such fiscal prudence. Indeed I would trust the Bundesbank more than any other European Central Bank to keep down inflation — because the Germans have none too distant memories of the total chaos and political extremism which hyper-inflation brings.

    The Germans are therefore right to be increasingly worried about the terms they agreed for economic and monetary union.

    Were I a German, I would prefer the Bundesbank to provide our modern equivalent of the gold standard rather than any committee of European bankers.

    But there is an understandable reluctance on the part of Bonn to defend its views and interests so straightforwardly.

    For years the Germans have been led to believe by their neighbours that their respectability depends on their subordinating their national interest to the joint decisions in the Community.

    It is better that that pretence be stopped.

    A reuinited Germany can’t and won’t subordinate its national interests in economic or in foreign policy to those of the Community indefinitely.

    And sometimes Germany will be right, when the rest are wrong, as it was over the recognition of Croatia and Slovenia.

    Indeed, if the Federal Republic had led the way in recognising these countries earlier, Serbian aggression might have been deterred and much bloodshed prevented.

    Whether rightly or wrongly exercised, however, Germany’s new pre-eminence is a fact.

    We will all be better off if we recognise that modern democratic Germany has come of age.

    Nevertheless Germany’s power is a problem — as much for the Germans as for the rest of Europe.

    Germany is too large to be just another player in the European game, but not large enough to establish unquestioned supremacy over its neighbours.

    And the history of Europe since 1870 has largely been concerned with finding the right structure to contain Germany.

    It has been Germany’s immediate neighbours, the French, who have seen this most clearly.

    Both Briand in 1929 and Schuman after the Second World War proposed structures of economic union to achieve this.

    Briand’s proposal was made just at the moment when the rise of the Nazis made such a visionary scheme impossible and it failed. But Schuman’s vision of a European Community was realised because of an almost unique constellation of favourable circumstances.

    The Soviet threat made European co-operation imperative.

    Germany was itself divided.

    Other Western nations sought German participation in the defence of Western Europe.

    West Germany needed the respectability that NATO and the Community could give.

    And American presence in, and leadership of, Europe reduced the fears of Germany’s neighbours.

    With the collapse of the Soviet Union and reunion of Germany, the entire position has changed.

    A new Europe of some 30 states has come into being, the problem of German power has again surfaced and statesmen have been scrambling to produce a solution to it.

    At first France hoped that the post-War Franco-German partnership with France as the senior partner would continue. Chancellor Kohl ‘s separate and successful negotiations with Mr Gorbachev quickly showed this to be an illusion.

    The next response of France and other European countries was to seek to tie down the German Gulliver within the joint decision-making of the European Community. Again, however, this quickly proved to be an illusion.

    Germany’s preponderance within the Community is such that no major decision can really be taken against German wishes.

    In these circumstance, the Community augments German power rather than containing it.

    Let me illustrate this point with two examples where I agree with the German position.

    The first, as I have mentioned, was the German decision to recognise Croatia and Slovenia which compelled the rest of Europe to follow suit.

    The second, is the refusal of the Bundesbank to pursue imprudent financial policies at the urging of some of the countries of the G7.

    However much I may sympathise with these policies, the blunt fact is that Germany has followed its own interests rather than the advice of its neighbours who have then been compelled to adjust their own stance.

    THE BALANCE OF POWER

    What follows from this is that German power will be best accommodated in a looser Europe in which individual nation-states retain their freedom of action.

    If Germany or any other power then pursues a policy to which other countries object, it will automatically invite a coalition against itself.

    And the resulting solution will reflect the relative weight of the adversaries.

    A common foreign policy, however, is liable to express the interests of the largest single actor.

    And a serious dispute between EC member states locked into a common foreign policy would precipitate a crisis affecting everything covered by the Community.

    The general paradox here is that attempts at co-operation that are too ambitious are likely to create conflict.

    We will have more harmonious relationships between the states of Europe if they continue to have room to make their own decisions and to follow their own interests — as happened in the Gulf War.

    But it would be idle to deny that such a balance of power — for that is what I have been describing — has sometimes broken down and led to war. And Europe on its own, however organised, will still find the question of German power insoluble.

    Europe has really enjoyed stability only since America became a European power.

    The third response therefore is to keep an American presence in Europe.

    American power is so substantial that it dwarfs the power of any other single European country.

    It reassured the rest of Europe in the face of Soviet power until yesterday; and it provides similar comfort against the rise of Germany today — as the Germans themselves appreciate.

    Why aren’t we worried about the abuse of American power? It is difficult to be anxious about a power so little inclined to throw its weight around that our principal worry is that American troops will go home.

    And there’s the rub.

    There is pressure isolationist opinion in the USA to withdraw from Europe.

    It is both provoked and encouraged by similar thinking in the Community which is protectionist in economics and “little European” in strategy.

    In trade, in the GATT negotiations, in NATO’s restructuring, we need to pursue policies that will persuade America to remain a European power.

    EUROPE FREE AND DEMOCRATIC

    If America is required to keep Europe secure, what is required to keep Europe free and democratic?

    When the founders of the European Community drew up the Treaty of Rome, they incorporated features from two quite different economic traditions.

    From Liberalism they took free trade, free markets and competition.

    From Socialism (in guises as various as Social Catholicism and Corporatism) they took regulation and intervention.

    And for thirty years — up to the signing of the Single European Act — these two traditions were in a state of perpetual but unacknowledged tension.

    Now — with the Commission exploiting the Single European Act to accumulate powers of greater direction and regulation — Europe is reaching the point at which it must choose between these two approaches.

    Is it to be a tightly-regulated, centralised bureaucratic federal state, imposing uniform standards throughout the Continent?

    Or is it to be a loose-knit decentralised free-market Europe of sovereign states, based upon competition between different national systems of tax and regulation within a free trade area?

    M. Delors at least seems to be quite clear.

    Before the ink is even dry on the Maastricht Treaty, the President of the European Commission, who has always been admirably frank about his ambitions, is seeking more money and more powers for the Commission which would become the Executive of the Community, in other words a European Government.

    And this initative comes on top of a Treaty that met the Commission’s demand for a “single institutional structure” for the Community.

    So there is no doubt what the President of the Commission is aiming at — it is a tightly centralised European federal state.

    Nor is there any mystery about the urgency with which he presses the Federalist cause.

    Even though he may wish to defer the “enlargement” of the Community with the accession of Eastern Europe, he realises it is impossible.

    A half-Europe imposed by Soviet tyrany was one thing; a half-Europe imposed by Brussels would be a moral catastrophe depriving the Community of its European legitimacy.

    The Commission knows it will have to admit new members in the next few decades.

    But it hopes to construct a centralised European super-state in advance — and irrevocably — so that the new members will have to apply for entry on federalist terms.

    This is not so much constructing a common European home — as a Common European Prison.

    And it’s just not on.

    Imagine a European Community of 30 nations, ranging in their economic productivity from Germany to Ukraine, and in their political stability from Britain to Poland,

    – all governed from Brussels;

    – all enforcing the same conditions at work;

    – all having the same worker rights as the German Unions;

    – all subject to the same interest rates, monetary, fiscal and economic policies;

    – all agreeing on a common Foreign and defence policy;

    – and all accepting the authority of an Executive and a remote foreign Parliament over “80&% of economic and social legislation”.

    Mr Chairman, such a body is an even more utopian enterprise than the Tower of Babel.

    For at least the builders of Babel all spoke the same language when they began.

    They were, you might say, communautaire.

    Mr Chairman, the thinking behind the Commission’s proposals is essentially the thinking of “yesterday’s tomorrow”.

    It was how the best minds of Europe saw the future in the ruins after the Second World War.

    But they made a central intellectual mistake.

    They assumed that the model for future government was that of a centralised bureaucracy that would collect information upwards, make decisions at the top, and then issue orders downwards.

    And what seemed the wisdom of the ages in 1945 was in fact a primitive fallacy.

    Hierarchical bureaucracy may be a suitable method of organising a small business that is exposed to fierce external competition — but it is a recipe for stagnation and inefficiency in almost every other context.

    It can collect and use only a fraction of the information that the market picks up, and acts upon minute by minute — and so it gets it wrong.

    The top cannot be sure that its orders are carried out by the bottom.

    And the organisation as a whole has no feedback that would indicate whether it is performing well or badly.

    Such flaws might be of minor importance in a monastery where, after all, the wishes of the monks are not the criteria of success.

    In a Government, however, they produce the economic chaos and alienation we saw under communism.

    Yet it is precisely this model of remote, centralised, bureaucratic organisation that the European Commission and its federalist supporters seek to impose on a Community which they acknowledge may soon contain many more countries of widely differing levels of political and economic development, and speaking more than fifteen languages.

    “C’est magnifique, mais ce n’est pas la politique.”

    The larger Europe grows, the more diverse must be the forms of co-operation it requires. Instead of a centralised bureaucracy, the model should be a market — not only a market of individuals and companies, but also a market in which the players are governments.

    Thus governments would compete with each other for foreign investments, top management and high earners through lower taxes and less regulation.

    Such a market would impose a fiscal discipline on governments because they would not want to drive away expertise and business.

    It would also help to establish which fiscal and regulatory policies produced the best overall economic results.

    No wonder socialists don’t like it.

    To make such a market work, of course, national governments must retain most of their existing powers in social and economic affairs.

    Since these governments are closer and accountable to their voters — it is doubly desirable that we should keep power at the national level.

    THE ROLE OF THE COMMISSION

    Mr Chairman, in 1996, when the arrangements agreed at Maastricht are due to be reviewed, and probably a good deal earlier, the Community should move in exactly the opposite direction to that proposed by the President of the Commission.

    A Community of sovereign states committed to voluntary co-operation, a lightly regulated free market and international free trade does not need a Commission in its present form.

    The government of the Community — to the extent that this term is appropriate — is the Council of Ministers, consisting of representatives of democratically elected national governments.

    The work of the Commission should cease to be legislative in any sense.

    It should be an administrative body, like any professional civil service, and it should not initiate policy, but rather carry it out.

    In doing this it should be subject to the scrutiny of the European Parliament acting on the model of Commons Select Committees.

    In that way, whatever collective policies or regulations are required would emerge from deliberation between democratic governments accountable to their national parliaments rather than being imposed by a bureaucracy with its own agenda.

    CO-OPERATION IN EUROPE

    But need this always be done in the same “single institutional structure”?

    New problems arise all the time. Will these always require the same level and type of co-operation in the same institutions?

    I doubt it.

    We need a greater flexibility than the structures of the European Community have allowed until very recently.

    A single institutional structure of its nature tends to place too much power in the central authorities.

    It is a good thing that a Common Foreign Policy will continue to be carried on under a Separate Treaty and will neither be subject to the European Court nor permit the Commission to fire off initiatives at will.

    If “Europe” moves into new areas, it must do so under separate treaties which clearly define the powers which have been surrendered.

    And why need every new European initiative require the participation of all members of the Community?

    It will sometimes be the case — especially after enlargement that only some Community members will want to move forward to another stage of integration.

    Here I pay tribute to John Major ‘s achievement in persuading the other 11 Community Heads of Government that they could move ahead to a Social Chapter but not within the treaty and without Britain’s participation.

    It sets a vital precedent.

    For an enlarged Community can only function if we build in flexibility of that kind.

    We should aim at a multi-track Europe in which ad hoc groups of different states — such as the Schengen Group — forge varying levels of co-operation and integration on a case-by-case basis.

    Such a structure would lack graph paper neatness.

    But it would accommodate the diversity of post-Communist Europe.

    THE EUROPEAN PARLIAMENT

    Supporters of federalism argue, no doubt sincerely, that we can accommodate this diversity by giving more powers to the European Parliament.

    But democracy requires more than that.

    To have a genuine European democracy — you would need a Europe-wide public opinion based on a single language; Europe-wide political parties with a common programme understood similarly in all member-states; a Europe-wide political debate in which political and economic concepts and words had the same agreed meaning everywhere.

    We would be in the same position as the unwielding Habsburg Empire’s Parliament.

    THE HABSBURG PARLIAMENT

    That parliament was a notorious failure.

    There were dozens of political parties, and nearly a dozen peoples were represented — Germans, Italians, Czechs, Poles and so on.

    For the government to get anything through — for instance, in 1889 a modest increase in the number of conscripts — took ages, as all the various interests had to be propitiated.

    When one or other was not satisfied, its spokesmen resorted to obstruction — lengthy speeches in Russian, banging of desk-lids, throwing of ink-wells and on one occasion the blowing of a cavalry trumpet by the Professor of Jurisprudence at the German University of Prague.

    Measures could not be passed, and budgets could only be produced by decree.

    The longest-lasting prime minister, Count Taaffe , remarked that his highest ambition in politics was the achievement of supportable dissatisfaction on all sides — not a bad description of what the European Community risks becoming.

    And because of the irresponsibility of parliaments, the Habsburg Monarchy could really only be ruled by bureaucrats.

    It took twenty-five signatures for a tax-payment to be validated; one in four people in employment worked for the state in some form or another, even in 1914, and so many resources went to all of this that not much was left for defence: even, the military bands had to be cut back, Radetzky March and all.

    Of course it was a tremendous period in cultural terms both in Vienna and in Budapest.

    We in England have done mightily well by the emigration, often forced, to our shores of so many talented people from Central Europe.

    But the fact is that they had to leave their native lands because political life became impossible.

    This example could be multiplied again and again.

    Belgium and Holland, which have so much in common, split apart in 1831.

    Sweden and Norway, which have even more in common, split apart in 1905.

    It does seem simply to be a straight-forward rule in modern times that countries which contain two languages, even if they are very similar, must in the end divide, unless the one language absorbs the other.

    It would be agreeable to think that we could all go back to the world of the Middle Ages, when the educated classes spoke Latin, and the rulers communicated in grunts.

    But we cannot.

    Unless we are dealing with international co-operation and alliances, freely entered-into, we create artificial structures which become the problem that they were meant to address.

    The League of Nations when the Second World War broke out, resolved to ignore the fact and to discuss, instead, the standardization of level-crossings.

    A FEDERAL EUROPE

    Mr Chairman, I am sometimes tempted to think that the new Europe which the Commission and Euro-federalists are creating is equally ill-equipped to satisfy the needs of its members and the wishes of their peoples.

    It is, indeed, a Europe which combines all the most striking failures of our age.

    – The day of the artificially constructed megastate has gone. So the Euro-federalists are now desperately scurrying to build one.

    – The Swedish style welfare state has failed — even in Sweden. So the Euro-statists press ahead with their Social Chapter.

    – Large scale immigration has in France and Germany already encouraged the growth of extremist parties. So the the European Commission is pressing us to remove frontier controls.

    If the European Community proceeds in the direction which the majority of Member State Governments and the Commission seem to want they will create a structure which brings insecurity, unemployment, national resentment and ethnic conflict.

    Insecurity — because Europe’s protectionism will strain and possibly sever that link with the United States on which the security of the continent ultimately depends.

    Unemployment — because the pursuit of policies of regulation will increase costs, and price European workers out of jobs.

    National resentment — because a single currency and a single centralised economic policy, which will come with it, will leave the electorate of a country angry and powerless to change its conditions .

    Ethnic conflict — because not only will the wealthy European countries be faced with waves of immigration from the South and from the East.

    Also within Europe itself, the effect of a single currency and regulation of wages and social costs will have one of two consequences.

    Either there will have to be a massive transfer of money from one country to another, which will not in practice be affordable.

    Or there there will be massive migration from the less successful to the more successful countries.

    Yet if the future we are being offered contains so very many risks and so few real benefits, why it may be asked is it proving all but irresistible ?

    The answer is simple.

    It is that in almost every European country there has been a refusal to debate the issues which really matter.

    And little can matter more than whether the ancient, historic nations of Europe are to have their political institutions and their very identities transformed by stealth into something neither wished nor understood by their electorates.

    Yet so much is it the touchstone of respectability to accept this ever closer union, now interpreted as a federal destiny, that to question is to invite affected disbelief or even ridicule.

    This silent understanding — this Euro-snobbism — between politicians, bureaucracies, academics, journalists and businessmen is destructive of honest debate.

    So John Major deserves high praise for ensuring at Maastricht that we would not have either a Single Currency or the absurd provisions of the Social Chapter forced upon us: our industry, workforce, and national prosperity will benefit as a result.

    Indeed, as long as we in Britain now firmly control our spending and reduce our deficit, we will be poised to surge ahead in Europe.

    For our taxes are low: our inflation is down: our debt is manageable: our reduced regulations are favourable to business.

    We take comfort from the fact that both our Prime Minister and our Foreign Secretary have spoken out sharply against the forces of bureaucracy and federalism.

    THE CHOICE

    Our choice is clear: Either we exercise democratic control of Europe through co-operation between national governments and parliaments which have legitimacy, experience and closeness to the people.

    Or, we transfer decisions to a remote multi-lingual parliament, accountable to no real European public opinion and thus increasingly subordinate to a powerful bureaucracy.

    No amount of misleading language about pooling sovereignty can change that.

    EUROPE AND THE WIDER WORLD

    Mr Chairman, in world affairs for most of this century Europe has offered problems, not solutions. The founders of the European Community were consciously trying to change that.

    Democracy and prosperity in Europe were to be an example to other peoples in other continents.

    Sometimes this view took an over-ambitious turn with talk of Europe as a third force brokering between two superpowers of East and West.

    This approach was always based upon a disastrous illusion — that Western Europe could at some future date dispense with the military defence offered by the United States.

    Now that the forces of Communism have retreated and the threat which Soviet tanks and missiles levelled at the heart of Europe has gone, there is a risk that the old tendency towards de-coupling Europe from the United States may again emerge.

    This is something against which Europeans themselves must guard — and of which the United States must be aware.

    This risk could become reality in several ways.

    TRADE

    First, there is the question of trade.

    It is a terrible indictment of the complacency which characterises the modern post-Cold War world that we have allowed the present GATT round to be stalled for so long.

    Free trade is the greatest force for prosperity and peaceful cooperation.

    It does no good to the Western alliance when Europe and the United States come to regard each other as hostile interests. In practice, whatever the theory may be, economic disputes do sour political relations.

    Agricultural subsidies and tarriffs lie at the heart of the dispute which will not go away unless we in Europe decide that the Common Agricultural Policy has to be fundamentally changed.

    That will go far to determine what kind of Europe we are building.

    For, as I have said before, I would like to see the European Community — embracing include the former Communist countries to its East — agree to develop an Atlantic free trade area with the United States.

    That would be a means of pressing for more open multi-lateral trade throughout the world.

    Europe must seek to move the world away from competing regional trade blocs — not promote them.

    In such a trading arrangement, Britain would have a vital role bridging that Atlantic divide — just as Germany should provide Europe with a bridge to the East and to the countries of the former Soviet Union.

    EASTERN EUROPE

    Secondly, we must modify and modernise our defence.

    The dangers on Europe’s Eastern border have receded.

    But let us not forget that on the credibility of NATO’s military strength all our wider objectives depend — reassurance for the post-communist countries, stability in Europe, trans-Atlantic political co-operation.

    Communism may have been vanquished.

    But all too often the Communists themselves have not.

    The chameleon qualities of the comrades have never been more clearly demonstrated than in their emergence as democratic socialists and varieties of nationalist in the countries of Central and Eastern Europe.

    From the powerful positions they retain in the bureaucracy, security apparatus and the armed forces, from their places in not-really-privatised enterprises, they are able to obstruct, undermine and plunder.

    The systems of proportional representation which so many of these countries have adopted have allowed these tactics to succeed all the more, leading to weak governments and a bewildering multiplicity of parties.

    All this risks bringing democracy into discredit.

    If Eastern European countries which retain some links with a pre-communist past, and have some sort of middle class on which to draw, falter on the path to reform, how will the leaders of the countries of the former Soviet Union dare to proceed further upon it?

    We can help by allowing them free access to our markets.

    I am delighted that Association agreements have been signed between the European Community and several of these countries.

    I would like speedy action to include the others in similar arrangement.

    But, ten years is too long to wait before the restrictions on trade are removed.

    And I would like to see these countries offered full membership of the European Community rapidly.

    Above all we must offer these countries greater security.

    Russian troops are still stationed on Polish territory.

    Moreover, it is understandable that the central and eastern European countries are alarmed at what conflict in the old USSR and the old Yugoslavia may portend.

    Although I recognise that the North Atlantic Cooperation Council has been formed with a view to this, I still feel that the European ex-Communist countries are entitled to that greater degree of reassurance which a separate closer relationship with NATO would bring.

    SECURITY

    But, Mr Chairman, most of the threats to Europe’s and the West’s interests no longer come from this Continent.

    I believe — and I have been urging this on NATO members since 1990 — that the American and Europeans ought to be able to deploy our forces under NATO outside the area for which the present North Atlantic Treaty allows.

    It is impossible to know where the danger may next come.

    But two considerations should make us alive to real risks to our security.

    First, the break up of the Soviet Union has led to large numbers of advanced weapons becoming available to would-be purchasers at knock-down prices: it would be foolish to imagine that these will not, some of them, fall into the worst possible hands.

    Second, Europe cannot ignore its dependence for oil on the Middle East.

    Saddam Hussein is still in power.

    Fundamentalism is as strong as ever.

    Old scores are still unsettled. We must beware.

    And we must widen our ability to defend our interests and be prepared to act when necessary.

    THE COMMUNITY’S WIDER ROLE

    Finally, the European Community must come to recognise its place in what is called the new world order.

    The ending of the Cold War has meant that the international institutions created in the post-War years — the UN, the IMF, the World Bank, the GATT — can work much more effectively. This means that the role for the Community is inevitably circumscribed.

    Within Europe, a wider role for NATO and the CSCE should also be reflected in more modest ambitions for the Community’s diplomacy.

    In Yugoslavia, the Community has shown itself incapable of dealing effectively with security questions.

    Outside Europe, GATT with its mandate to reduce trade barriers should be the body that establishes the rules of the game in trade.

    The Community must learn to live within those rules.

    All in all, the Community must be prepared to fit in with the new internationalism, not supplant it.

    CONCLUSION

    Mr Chairman, I end as I began with architecture.

    The Hague is a splendid capital, and how much we should admire the Dutch for keeping it together so well, as they have done with so many other of their towns.

    The Mauritshuis is a testimony to the genius which they showed.

    It was here, and in Amsterdam that so much of the modern world was invented in the long Dutch fight for freedom.

    Dutch architecture, here and in Amsterdam, has its own unmistakable elegance and durability — it was copied all around the north-European world, from Wick in northern Scotland to Tallinn in Estonia.

    Some architecture does last. Other architecture does not.

    Let us make sure that we build a Europe as splendid and lasting as the Mauritshuis rather than one as shabby and ephemeral as the Berlaymont.

  • Margaret Thatcher – Comments made when leaving Downing Street

    margaretthatcher

    Below is the text of the comments made by the departing Prime Minister, Margaret Thatcher, when leaving Downing Street in London on Wednesday 28th November 1990.

    Ladies and Gentlemen,

    We’re leaving Downing Street for the last time after eleven-and-a-half wonderful years, and we’re very happy that we leave the United Kingdom in a very, very much better state than when we came here eleven and a half years ago.

    It’s been a tremendous privilege to serve this country as Prime Minister—wonderfully happy years—and I’m immensely grateful to the staff who supported me so well, and may I also say a word of thanks to all the people who sent so many letters, still arriving, and for all the flowers.

    Now it’s time for a new chapter to open and I wish John Major all the luck in the world. He’ll be splendidly served and he has the makings of a great Prime Minister, which I’m sure he’ll be in very short time.

    Thank you very much. Goodbye.

  • Margaret Thatcher – 1984 Conservative Party Conference Speech in Brighton

    margaretthatcher

    This speech was given by the Conservative Party leader, Margaret Thatcher, in October 1984, just hours after the Brighton bomb.

    The bomb attack on the Grand Hotel early this morning was first and foremost an inhuman, undiscriminating attempt to massacre innocent unsuspecting men and women staying in Brighton for our Conservative Conference. Our first thoughts must at once be for those who died and for those who are now in hospital recovering from their injuries. But the bomb attack clearly signified more than this. It was an attempt not only to disrupt and terminate our Conference; It was an attempt to cripple Her Majesty’s democratically-elected Government. That is the scale of the outrage in which we have all shared, and the fact that we are gathered here now shocked, but composed and determined is a sign not only that this attack has failed, but that all attempts to destroy democracy by terrorism will fail.

    I should like to express our deep gratitude to the police, firemen, ambulancemen, nurses and doctors, to all the emergency services, and to the staff of the hotel; to our ministerial staff and the Conservative Party staff who stood with us and shared the danger.

    As Prime Minister and as Leader of the Party, I thank them all and send our heartfelt sympathy to all those who have suffered.

    And now it must be business as usual. We must go on to discuss the things we have talked about during this Conference; one or two matters of foreign affairs; and after that, two subjects I have selected for special consideration are unemployment and the miners’ strike.

    This Conservative Conference, superbly chaired, and of course, our Chairman, Dame P. Hunter, came on this morning with very little sleep and carried on marvellously, and with excellent contributions from our members, has been an outstanding example of orderly assembly and free speech. We have debated the great national and international issues, as well as those which affect the daily lives of our people. We have seen at the rostrum miner and pensioner, nurse and manager, clergyman and student. In Government, we have been fulfilling the promises contained in our election manifesto, which was put to the people in a national ballot.

    This Government, Mr. President, is reasserting Parliament’s ultimate responsibility for controlling the total burden of taxation on our citizens, whether levied by central or local government, and in the coming session of Parliament we shall introduce legislation which will abolish the GLC and the Metropolitan County Councils.

    In the quest for sound local government, we rely on the help of Conservative councillors. Their task should never be underestimated and their virtues should not go unsung. They work hard and conscientiously in the true spirit of service and I pay special tribute to the splendid efforts of Conservative councils up and down the country in getting better value for money through greater efficiency and putting out work to competitive tender. This is privatization at the local level and we need more of it.

    At national level, since the General Election just over a year ago, the Government has denationalized five major enterprises, making a total of thirteen since 1979. Yesterday, you gave Norman Tebbit a standing ovation; today, our thoughts are with him and his family.

    Again and again, denationalization has brought greater motivation to managers and workforce, higher profits and rising investment, and what is more, many in industry now have a share in the firm for which they work. We Conservatives want every owner to be an earner and every earner to be an owner.

    Soon, we shall have the biggest ever act of denationalization with British Telecom and British Airways will follow; and we have not finished yet. There will be more to come in this Parliament.

    And just as we have stood by our pledge on denationalization, it is our pride that despite the recession, we have kept faith with 9 million pensioners and moreover, by keeping inflation down, we have protected the value of their savings. As Norman Fowler told the Conference on Wednesday, this Government has not only put more into pensions, but has increased resources for the National Health Service. Our record for last year, to be published shortly, will show that the Health Service today is providing more care, more services and more help for the patient than at any stage in its history. That is Conservative care in practice. And I think it is further proof of the statement I made in Brighton in this very hall two years ago; perhaps some of you remember it; that the National Health Service is safe with us.

    Now Mr. President and Friends, this performance in the social services could never have been achieved without an efficient and competitive industry to create the wealth we need. Efficiency is not the enemy, but the ally, of compassion.

    In our discussions here, we have spoken of the need for enterprise, profits and the wider distribution of property among all the people. In the Conservative Party, we have no truck with outmoded Marxist doctrine about class warfare. For us, it is not who you are, who your family is or where you come from that matters. It is what you are and what you can do for our country that counts. That is our vision. It is a vision worth defending and we shall defend it. Indeed, this Government will never put the defence of our country at risk.

    No-one in their senses wants nuclear weapons for their own sake, but equally, no responsible prime minister could take the colossal gamble of giving up our nuclear defences while our greatest potential enemy kept their’s.

    Policies which would throw out all American nuclear bases which, mind you, have been here since the time of Mr. Attlee, Mr. Truman and Winston Churchill, would wreck NATO and leave us totally isolated from our friends in the United States, and friends they are. No nation in history has ever shouldered a greater burden nor shouldered it more willingly nor more generously than the United States. This Party is pro-American.

    And we must constantly remind people what the defence policy of the Opposition Party would mean. Their idea that by giving up our nuclear deterrent, we could somehow escape the result of a nuclear war elsewhere is nonsense, and it is a delusion to assume that conventional weapons are sufficient defence against nuclear attack. And do not let anyone slip into the habit of thinking that conventional war in Europe is some kind of comfortable option. With a huge array of modern weapons held by the Soviet Union, including chemical weapons in large quantities, it would be a cruel and terrible conflict. The truth is that possession of the nuclear deterrent has prevented not only nuclear war but also conventional war and to us, peace is precious beyond price. We are the true peace party. And the nuclear deterrent has not only kept the peace, but it will continue to preserve our independence. Winston Churchill’s warning is just as true now as when he made it many many years ago. He said this: “Once you take the position of not being able in any circumstances to defend your rights against aggression, there is no end to the demands that will be made nor to the humiliations that must be accepted”. He knew, and we must heed his warning.

    And yet, Labour’s defence policy remains no Polaris, no Cruise missiles in Britain, no United States nuclear bases in Britain, no Trident, no independent nuclear deterrent.

    There is, I think, just one answer the nation will give. No defence, no Labour Government.

    Mr. President, in foreign affairs, this year has seen two major diplomatic successes. We have reached a detailed and binding agreement with China on the future of Hong Kong. It is an agreement designed to preserve Hong Kong’s flourishing economy and unique way of life and we believe that it meets the needs and wishes of the people of Hong Kong themselves.

    A few weeks ago, the unofficial members of the Executive Council of Hong Kong came to see me. We kept in touch with them the whole time and they frequently made journeys to No. 10 Downing Street as the negotiations with China proceeded. We were just about to initial the agreement and we consulted them, of course, about its content. Their spokesman said this: he said that while the agreement did not contain everything he would have liked, he and his colleagues could nevertheless recommend it to the people of Hong Kong in good conscience. That means a lot to us. If that is what the leaders of Hong Kong’s own community believe, then we have truly fulfilled the heavy responsibility we feel for their long-term future.

    That agreement required imagination, skill, hard work and perseverance. In other words, it required Geoffrey Howe.

    And in Europe too, through firmness and determination, we have achieved a long-term settlement of Britain’s budget contributions, a fair deal for Britain and for Europe too. And if we had listened to the advice of other party leaders, Britain would not have done half as well. But patient diplomacy and occasionally, I confess, a little impatient diplomacy, that did the trick.

    Also, we have at last begun to curb surplus food production in the Community. Now, we know that for some farmers this has meant a painful adjustment and we are very much aware of their difficulties. Their work and their success are a great strength to our country. Michael Jopling and his colleagues will continue to fight to achieve a fair deal for them.

    We have also won agreement on the need to keep the Community’s spending under proper control. The Community can now enter on a new chapter and use its energies and influence to play a greater part in world affairs, as an example of what democracies can accomplish, as a very powerful trading group and as a strong force for freedom.

    Now, Mr. President, we had one of the most interesting debates of this Conference on unemployment, which we all agree is the scourge of our times.

    To have over 3 million people unemployed in this country is bad enough, even though we share this tragic problem with other nations, but to suggest, as some of our opponents have, that we do not care about it is as deeply wounding as it is utterly false. Do they really think that we do not understand what it means for the family man who cannot find a job, to have to sit at home with a sense of failure and despair? Or that we do not understand how hopeless the world must seem to a young person who has not yet succeeded in getting his first job? Of course, we know, of course we see, and of course, we care. However could they say that we welcome unemployment as a political weapon? What better news could there be for any Government than the news that unemployment is falling and the day cannot come too soon for me.

    Others, while not questioning our sincerity, argue that our policies will not achieve our objectives. They look back forty years to the post-war period, when we were paused to launch a brave new world; a time when we all thought we had the cure for unemployment. In that confident dawn it seemed that having won the war, we knew how to win the peace. Keynes had provided the diagnosis. It was all set out in the 1944 White Paper on Employment. I bought it then; I have it still. My name is on the top of it. Margaret H. Roberts. One of my staff took one look at it and said: “Good Heavens! I did not know it was as old as that!”

    Now, we all read that White Paper very carefully, but the truth was that politicians took some parts of the formula in it and conveniently ignored the rest. I re-read it frequently. Those politicians overlooked the warning in that Paper that government action must not weaken personal enterprise or exonerate the citizen from the duty of fending for himself. They disregarded the advice that wages must be related to productivity and above all, they neglected the warning that without a rising standard of industrial efficiency, you cannot achieve a high level of employment combined with a rising standard of living.

    And having ignored so much of that and having ignored other parts of the formula for so much of the time, the result was that we ended up with high inflation and high unemployment.

    This Government is heeding the warnings. It has acted on the the basic truths that were set out all those years ago in that famous White Paper. If I had come out with all this today, some people would call it “Thatcherite” but, in fact, it was vintage Maynard Keynes. He had a horror of inflation, a fear of too much State control, and a belief in the market.

    We are heeding those warnings. We are taking the policy as a whole and not only in selected parts. We have already brought inflation down below 5%. Output has been rising steadily since 1981 and investment is up substantially. But if things are improving, why ‘you will ask’ does unemployment not fall?

    And that was the question one could feel throughout that debate, even though people know there is always a time lag between getting the other things right and having a fall in unemployment. Why does unemployment not fall?

    May I try to answer that question?

    Well, first, more jobs are being created. As Tom King pointed out, over the last year more than a quarter of a million extra jobs have been created, but the population of working age is also rising very fast as the baby boom of the 1960s becomes the school-leavers of the 1980s; so although the number of jobs are rising, the population of working age is also rising, and among the population of working age a larger proportion of married women are seeking work, and so you will see why we need more jobs just to stop unemployment rising and even more jobs to get it falling.

    Now, on top of that, new technology has caused redundancy in many factories, though it has also created whole new industries providing products and jobs that only a few years ago were undreamed of.

    So it has two effects: the first one redundancies, the second and slightly later, new jobs as new products become possible. This has happened in history before.

    A few days ago I visited York, where I saw the first railway engine, Stevenson’s Rocket. I thought of the jobs, the prospects and the hope that the new steam engines and the railways then brought to many people. Communities queued up to be on a railway line, to have their own station. Those communities welcomed change and it brought them more jobs.

    I confess I am very glad we have got the railways, but if we were trying to build those same railways today, I wonder if we would ever get planning permission, it sometimes takes so long. And that is one thing that can sometimes delay the coming into existence of jobs.

    That was one example from history, but let us go through during my lifetime as we have this same phenomenon, redundancies from new technology more jobs from new technology.

    In the 1940s, when I took a science degree, the new emerging industries were plastics, man-made fibres and television. Later it will be satellites, computers and telecommunications, and now it is biotechnology and information technology; and today our universities and science parks are identifying the needs of tomorrow. So there are new industries and new jobs in the pipeline.

    I remember an industrialist telling me, when I first went into business, and I have always remembered it, our job is to discover what the customer will buy and to produce it. And in Wrexham the other day, at a Youth Training Centre, I was delighted to see a poster saying ‘It is the customer that makes pay days possible.’ So those young people are not only learning new technology; they were learning the facts of business life and how we create new jobs. Because it is the spirit of enterprise that provides jobs. It is being prepared to venture and build a business and the role of Government in helping them to do that? It is in cutting taxes; it is in cutting inflation; it is keeping costs down; it is cutting through regulations and removing obstacles to the growth of small businesses. For that is where many of the new jobs will come from small businesses. And it is providing better education and training.

    The Youth Training Scheme, now in its second year, was set up to give young people the necessary skills for the new technologies and the necessary approach to industry. A majority of the first year’s graduates are getting jobs. A much bigger proportion of those leaving the Youth Training Scheme are getting jobs than of those which left the Youth Opportunities Scheme, and so they should, because it is a much better training scheme and it will improve again this year. I was very interested in it. David Young started it and I offered to take a trainee for our office at No. 10 Downing Street. We would love to have one. Now, he or she might not have made it to be Prime Minister in one year, but the work at No. 10, because we have a staff, obviously, to run the office, of about a hundred, is varied and interesting and we really wanted to take on a trainee, and we also said we would take some trainees into the other parts of the Civil Service. So we were willing; we were really welcoming this person or people and looking forward to it.

    At first, the union said yes, then they said no, and the result is that young people have been denied training places.

    The same problem arose at Jaguar. First the union said yes, then they said no. So 130 unemployed teenagers have been denied training, and that means young people were denied jobs.

    Mr. President, we cannot create jobs without the willing cooperation not only of employers but of trade unions and all of the workforce who work in industry and commerce as well.

    Yesterday, in the debate, we were urged to spend more money on capital investment. It looks a very attractive idea, but to spend more in one area means spending less in another or it means putting up taxes. Now, in Government, we are constantly faced with these difficult choices. If we want more for investment, I have to ask my colleagues in Cabinet: ‘What are you going to give up or you or you? Or you or you?’ Or should I perhaps ask them: ‘Whose pay claim are you going to cut, the doctors, the police, the nurses?’ I do not find many takers, because we have honoured the reviews of pay for doctors, nurses and the police and others in full. And you would not have cheered me if we had not done so and quite right too, but I am bringing this to you because although people can say the way to solve unemployment is to give a higher capital allocation, I have to say what are we going to give up or I have to turn to Nigel Lawson and ask him which taxes would he put up. Income tax? The personal income tax is already too high. Value Added Tax? Well, I should get a pretty frosty reception from Nigel and I should get a pretty frosty reception from you. But I would be loth to ask him anyway.

    But you see, governments have to make these difficult choices, because as you know, whether your own households or whether your own businesses, there is a certain amount of income and you are soon in trouble if you do not live within it.

    But what I want to say to you is that we do consider these difficult choices in the public expenditure annual round and we are just coming up to it, and we have managed to allocate a very considerable sum to capital investment. Indeed, we have found the money for the best investment projects on offer and believe you me, it has been because of very good management in each and every department. It has been cutting out waste so we could make room for these things and be certain that we could say to you that we were getting value for money.

    Let me just give you a few examples of some of the investment projects for which we have found money, by careful budgetting.

    There is the M25 road for example. It is being completed. British Railways have been given the green light to go ahead with electrification, if they can make it pay. We have started or built forty-nine new hospitals since 1979. Capital investment in the nationalized industries as a whole is going up. Of course, we look at those things like new power stations and in a year after drought we look at things like more investment in the water supply industry. So we are going ahead with major capital investment.

    So what is the conclusion that we are coming to? It is the spirit of enterprise that creates new jobs and it is Government’s task to create the right framework, the right financial framework, in which that can flourish and to cut the obstacles which sometimes handicap the birth of enterprise, and also to manage our own resources carefully and well.

    That is more or less what that Employment Policy White Paper in 1944 said, so let me just return to it, page 1. It is getting a bit old.

    ‘Employment cannot be created by Act of Parliament or by Government action alone. The success of the policy outlined in this Paper will ultimately depend on the understanding and support of the community as a whole and especially on the efforts of employers and workers in industry.’

    It was true then, it is true now, and those are the policies that we are following and shall continue to follow, because those are the policies that we believe will ultimately create the genuine jobs for the future. In the meantime, it is our job to try to mitigate the painful effects of change and that we do, as you know, by generous redundancy payments and also by a Community Enterprise Scheme, which not only finds jobs for the long-term unemployed, but finds them in a way which brings great benefits to the communities. And then, of course, where there are redundancy schemes in steel and now in coal, the industries themselves set up enterprise agencies both to give help to those who are made redundant and to provide new training. All of this is a highly constructive policy both for the creation of jobs and a policy to cushion the effects of change.

    May I turn now to the coal industry?

    For a little over seven months we have been living through an agonising strike. Let me make it absolutely clear the miners’ strike was not of this Government’s seeking nor of its making.

    We have heard in debates at this Conference some of the aspects that have made this dispute so repugnant to so many people. We were reminded by a colliery manager that the NUM always used to accept that a pit should close when the losses were too great to keep it open, and that the miners set great store by investment in new pits and new seams, and under this Government that new investment is happening in abundance. You can almost repeat the figures with me. Two million pounds in capital investment in the mines for every day this Government has been in power, so no shortage of capital investment.

    We heard moving accounts from two working miners about just what they have to face as they try to make their way to work. The sheer bravery of those men and thousands like them who kept the mining industry alive is beyond praise. ‘Scabs’ their former workmates call them. Scabs? They are lions! What a tragedy it is when striking miners attack their workmates. Not only are they members of the same union, but the working miner is saving both their futures, because it is the working miners, whether in Nottinghamshire, Derbyshire, Lancashire, Leicestershire, Staffordshire, Warwickshire, North Wales or Scotland, it is the working miners who have kept faith with those who buy our coal and without that custom thousands of jobs in the mining industry would be already lost.

    And then we heard unforgettably from the incomparable Mrs. Irene McGibbon who told us what it is like to be the wife of a working miner during this strike. She told us of the threats and intimidation suffered by herself and her family and even her 11-year-old son, but what she endured only stiffened her resolve. To face the picket line day after day must take a very special kind of courage, but it takes as much, perhaps even more, to the housewife who has to stay at home alone. Men and women like that are what we are proud to call ‘the best of British’ and our police who upheld the law with an independence and a restraint perhaps only to be found in this country are the admiration of the world.

    To be sure, the miners had a good deal and to try to prevent a strike the National Coal Board gave to the miners the best ever pay offer, the highest ever investment and for the first time the promise that no miner would lose his job against his will. We did this despite the fact that the bill for losses in the coal industry last year was bigger than the annual bill for all the doctors and dentists in all the National Health Service hospitals in the United Kingdom.

    Let me repeat it: the losses in the coal industry are enormous. 1.3 billion pounds last year. You have to find that money as tax-payers. It is equal to the sum we pay in salaries to all the doctors and dentists in the National Health Service.

    Mr. President, this is a dispute about the right to go to work of those who have been denied the right to go to vote, and we must never forget that the overwhelming majority of trade unionists, including many striking miners, deeply regret what has been done in the name of trade unionism. When this strike is over, and one day it will be over, we must do everything we can to encourage moderate and responsible trade unionism so that it can once again take its respected and valuable place in our industrial life.

    Meanwhile, we are faced with the present Executive of the National Union of Mineworkers. They know that what they are demanding has never been granted either to miners or to workers in any other industry. Why then demand it? Why ask for what they know cannot be conceded? There can only be one explanation. They did not want a settlement; they wanted a strike. Otherwise, they would have ballotted on the Coal Board’s offer. Indeed, one-third of the miners did have a ballot and voted overwhelmingly to accept the offer.

    Mr. President, what we have seen in this country is the emergence of an organized revolutionary minority who are prepared to exploit industrial disputes, but whose real aim is the breakdown of law and order and the destruction of democratic parliamentary government. We have seen the same sort of thugs and bullies at Grunwick, more recently against Eddie Shah in Stockport, and now organized into flying squads around the country. If their tactics were to be allowed to succeed, if they are not brought under the control of the law, we shall see them again at every industrial dispute organized by militant union leaders anywhere in the country.

    One of the speakers earlier in this Conference realized this fact, realized that what they are saying is: ‘Give us what we want or we are prepared to go on with violence,’ and he referred to Danegeld. May I add to what that speaker said.

    “We never pay anyone Danegeld, no matter how trifling the cost, for the end of that gain is oppression and shame, and the nation that plays it is lost.” Yes, Rudyard Kipling. Who could put it better?

    Democratic change there has always been in this, the home of democracy. But the sanction for change is the ballot box.

    It seems that there are some who are out to destroy any properly elected government. They are out to bring down the framework of law. That is what we have seen in this strike, and what is the law they seek to defy?

    It is the Common Law created by fearless judges and passed down across the centuries. It is legislation scrutinized and enacted by the parliament of a free people. It is legislation passed through a House of Commons, a Commons elected once every five years by secret ballot by one citizen, one vote. This is the way our law was fashioned and that is why British justice is renowned across the world.

    “No government owns the law. It is the law of the land, heritage of the people. No man is above the law and no man is below it. Nor do we ask any man’s permission when we require him to obey it. Obedience to the law is demanded as a right, not asked as a favour.” So said Theodore Roosevelt.

    Mr. President, the battle to uphold the rule of law calls for the resolve and commitment of the British people. Our institutions of justice, the courts and the police require the unswerving support of every law-abiding citizen and I believe they will receive it.

    The nation faces what is probably the most testing crisis of our time, the battle between the extremists and the rest. We are fighting, as we have always fought, for the weak as well as for the strong. We are fighting for great and good causes. We are fighting to defend them against the power and might of those who rise up to challenge them. This Government will not weaken. This nation will meet that challenge. Democracy will prevail.

  • Margaret Thatcher – 1982 Speech to Conservative Party Conference

    Below is the text of the speech made by Margaret Thatcher, the then Prime Minister, at the 1982 Conservative Party conference in Brighton on 8th October 1982.

    Mr. President, thank you for that splendid welcome. You’re right. This has been a year of the unexpected, and in turning our thoughts to an issue which transcends party politics you do well to remind us of what happened in the spring of the year.

    This is not going to be a speech about the Falklands campaign, though I would be proud to make one. But I want to say just this, because it is true for all our people. The spirit of the South Atlantic was the spirit of Britain at her best. It has been said that we surprised the world, that British patriotism was rediscovered in those spring days.

    Mr. President, It was never really lost. But it would be no bad thing if the feeling that swept the country then were to continue to inspire us. For if there was any doubt about the determination of the British people it was removed by the men and women who, a few months ago, brought a renewed sense of pride and self-respect to our country.

    They were for the most part young. Let all of us here, and in the wider audience outside, pause and reflect on what we who stayed at home owe to those who sailed and fought, and lived and died—and won. If this is tomorrow’s generation, then Britain has little to fear in the years to come.

    In what by any standards was a remarkable chapter in our island history, it is they who this year wrote its brightest page.

    In remembering their heroism, let us not forget the courage shown by those same Armed Forces nearer home. We see them and the other forces of law and order display these qualities day after day in Northern Ireland. Yes, and even closer at hand. I have seen no more moving sight in the last year than the Blues and Royals bearing their tattered standard proudly past the spot in Hyde Park where their comrades had been murdered in a cruel and cowardly bomb attack only two days before.

    Terrorism is a deadly threat to our way of life, and we will not be cowed by it. We will continue to resist it with all our power and to uphold the principles of democratic government.

    Mr. President, I cannot remember a better Conference. Our debates have been lively, good-humoured—indeed, at one moment I was very proud to think that I had served in John Nott’s Cabinet, and quite relieved to know that the Secretary of State for Employment will in future have confidence in the Treasury forecasts about the cost of living. He should. He actually compiles the index. He should be telling us.

    They have been lively, good-humoured and humming with ideas, and they have tackled the real issues of the day.

    There have been two other Party Conferences before this, and perhaps I will have a word to say about them later.

    First, I want to come to something that dwarfs party politics—indeed, to an issue that dwarfs every other issue of our time.

    We have invented weapons powerful enough to destroy the whole world. Others have created political systems evil enough to seek to enslave the whole world. Every free nation must face that threat. Every free nation must strain both to defend its freedom and to ensure the peace of the world.

    The first duty of a British Government is the defence of the Realm, and we shall discharge that duty.

    Ever since the War the principal threat to our country’s safety has come from the Soviet bloc. Twenty-six years ago the Russians marched into Hungary. Twenty-one years ago they built the Berlin Wall. Fourteen years ago they reconquered Czechoslovakia. Three years ago they entered Afghanistan. Two years ago they began to suppress the first stirrings of freedom in Poland.

    Oh, they knew the strength of the human spirit. They knew that if freedom were allowed to take root in Poland it would spread across Eastern Europe and perhaps to the Soviet Union itself. They knew that the beginning of freedom spelt the beginning of the end for Communism.

    Yet despite these regular reminders of the ruthless actions of the Kremlin there are still those who seem to believe that disarmament by ourselves alone would so impress the Russians that they would obligingly follow suit.

    But peace, freedom and justice are only to be found where people are prepared to defend them. This Government will give the highest priority to our national defence, both conventional and nuclear.

    I want to see nuclear disarmament. I want to see conventional disarmament as well. I remember the atomic bombs that devastated Hiroshima and Nagasaki. I remember, too, the bombs that devastated Coventry and Dresden. The horrors of war are indivisible. We all want peace, but not peace at any price. Peace with justic and freedom.

    We seek agreement with the Soviet Union on arms control. We want to reduce the levels of both conventional and nuclear forces. But those reductions must be mutual, they must be balanced and they must be verifiable.

    Oh, I understand the feelings of the unilateralists. I understand the anxieties of parents with children growing up in the nuclear age. But the question, the fundamental question for all of us is whether unilateral nuclear disarmament would make war less likely.

    I have to tell you it would not. It would make war more likely, aggressors attack because they think they are going to win, and they are more likely to attack the weak than they are to attack the strong.

    The springs of war lie not in arms races, real or imaginary, but in the readiness to use force or threaten force against other nations. Remember what Bismarck said

    “Do I want war? Of course not. I want victory.” The causes of wars in the past haven’t, changed, as we know to our cost. But because Russia and the West know that there can be no victory in nuclear war, for thirty-seven years we have kept the peace in Europe, and that is no mean achievement.

    That is why we need nuclear weapons, because having them makes peace more secure. Yet at Blackpool last week, the Labour Party, by a huge majority, adopted a new official defence policy. It went like this: Polaris to be scrapped; Trident to be cancelled; Cruise missiles in service to be removed. It is now clear beyond doubt that given the change the Labour Party wants, they would dismantle Britain’s defences wholesale.

    And yet do you remember how Aneurin Bevan pleaded with an earlier Labour Party Conference not to send a Labour Foreign Secretary naked into the Conference chamber? Well, it is a good thing that there isn’t going to be a Labour Foreign Secretary.

    Yet the Labour Party wants to keep Britain in NATO, continuing to shelter behind American nuclear weapons—so long as they are not on our soil. What utter hypocrisy. To expect an insurance policy but to refuse to pay the premium.

    There must be millions of Labour supporters who are thoroughly disheartened by what they saw at Blackpool last week. I say to them “Forget about the Militant Tendency—come over and join the Tory tendency”.

    Mr. President, a strong and united Western alliance is a guarantee of our peace and security. It is also a beacon of hope to the oppressed people of the Soviet bloc. Mr. President, Britain is a reliable ally, and with a Conservative Government will always remain so—reliable in NATO, reliable beyond NATO, an ally and a friend to be trusted. And trusted not least by our partners in the European Community.

    Of course, ancient nations do not always find it easy to live together. Yet our commitment to the Common Market is clear. We are all democratic countries where freedom and the rule of law are basic to our institutions.

    At present, as you know, Britain pays quite large sums to Community partners often richer than we ourselves. That is fundamentally unjust. It is also shortsighted.

    As you know, we have just come to the end of our first three-year arrangement. We shall really have to fight — courteously, of course — to make sure that we have a fair deal for the future. But those who would pull us out of Europe must come to terms with the damage that that would do to our people. Even the threat of withdrawal destroys jobs. Firms that invest in the Common Market often decide to come to Britain. Labour’s threat to withdraw makes companies hesitate and look elsewhere. That Labour threat is losing us jobs now.

    Mr. President, the great economies of Germany and France, once the engine of growth of the European Community, are struggling with declining output and a growing army of unemployed. Across the Atlantic, the United States, Canada and the countries of Latin America, they have been faced with the most prolonged slump for fifty years. Even the miracle economies of the Pacific Basin—Japan, Korea, Taiwan, Hong Kong and Singapore—even they are now being hit.

    But the economies of the Eastern bloc are in a far worse state, far worse state than the West. Poland and Romania are hard pressed to pay their debts, and the Soviet bloc countries generally are riven with shortages of everything, from seed corn to sewing thread.

    Of course, none of us foresaw a world recession of such gravity. Last week in Blackpool the Opposition suggested that I, single-handed, had brought it about. What powers they attribute to me! If I had that sort of power I would banish recession forever. But we’ve no time for dreams and delusions. The main culprit, and there are others, is the greatest sustained inflation in modern times. Almost every developed country has suffered from it.

    For more than a decade economic growth has been thwarted. For more than a decade savers in America and Europe have been systematically robbed by the steady erosion of their savings and for more than a decade the ranks of the unemployed have swollen in the wake of inflation. In 1979 many of us in Europe began the long hard job of wringing a inflation out of the system. As you know Governments had promised to do this over and over again. But when the going got tough they resorted to the printing press. No wonder people became cynical.

    Journalists, many but not all of them on the Left, were almost daily predicting U turns. Some indeed, confidently went around the bend. Now most commentators, with attitudes varying from awe to rage, recognise that we are sticking to our policy. Oh yes, we have been to the IMF. But unlike the last Government we went not as a nation seeking help but as a country giving help to others—a much more fitting role for Britain. From Socialist supplicant to Conservative contributor.

    With inflation falling, interest rates coming down, and honest finance, confidence is returning. In spite of hostilities in the South Atlantic, the exchange rate held steady. What a tribute to the determined and unruffled Chancellorship of Geoffrey Howe. No longer will the saver find his money devalued. No longer shall we have two nations, those who profit from inflation and those who lose by it. No longer will paper booms explode in confetti money.

    Mr. President, there is no road to inflation-free prosperity except through our own efforts. Two hundred years ago, Edmund Burke blamed the French revolutionaries for trying everywhere to “evade and slip aside from difficulty.” He said they had a “fondness for trickery and short-cuts.”

    Mr. President, there are just as many evaders and short-cutters around today, in the Labour Party, the SDP and among the Liberals, taken jointly or severally, according to taste. Inflate a little here, expand a bit there; it’s all so easy. Mr. President, in real life such short cuts often turn out to be dead ends.

    In the 60s and 70s the fashion was to say that the long term does not matter very much because, as Maynard Keynes put it, “In the long run we are all dead.” Anyone who thought like that would never plant a tree.

    We are in the business of planting trees, for our children and grandchildren, or we have no business to be in politics at all. We are not a one generation party. We do not intend to let Britain become a one generation society. Let us not forget the lesson of history. The long term always starts today.

    For, Mr. President, falling inflation on its own will not ensure growth and jobs. We need other things, too. Whether we like it or not, things are changing. They are changing in technology, as we have seen at this conference, with this thing that comes up. We keep abreast of the times. They are changing on the map. Far-away countries scarcely heard of ten years ago now overtake us in our traditional industries. Suddenly we are faced with the need to do everything at once—to wake up, catch up and then overtake, even though the future is as hard to predict as ever.

    So we have to look as far into that future as we can, make sure that all the best talents are free to work at full stretch to help to lead this country into that future. Now Socialists believe that the State can do this better than individuals. Nothing could be more misguided. They are wrong. We can’t opt out of the technology race and try to stand comfortably aside. If we were to do so we should lose not just particular products but whole industries. And we dare not leave our neighbours to inherit the world of the microchip. As one production engineer put it, “The real threat in new technology is the threat of your worst enemies using it.”

    Mr. President, inflation has not been beaten, even when prices stop rising. It is beaten only when costs stop rising. That makes wage costs vital. Pay must relate to output, as every self-employed person will tell you. In the last five years of the 1970s the amount we in Britain paid ourselves for what we produced went up by nearly 100 per cent. One hundred per cent. In Germany their increase was only 15 per cent. In Japan it was zero nought. Of course Japanese workers got more pay, but only from more output.

    So, they got the orders and we lost the jobs. The CBI put it starkly: “Because we have lost over 100 per cent. of the home market to imports” I’m sorry, that’s not what they said. “Because we have lost ten per cent of the home market to imports, and 2.5 per cent. of world export markets to our competitors in the last 12 years we have lost 1.5 million jobs.”

    One and a half million jobs—through losing a fair chunk of our home market to importers and a fair chunk of the export markets to our competitors. Now there is a challenge to management and unions. Get those markets back and we shall get our jobs back.

    And the public sector, well, as you know the Chancellor of the Exchequer has just announced 3.5 per cent. more available for next year’s public pay bill. And before you say “that’s not much”, just remember, for the German civil service it is not going to be 3.5 per cent. but 2 per cent. In Japan, the Japanese civil servants are getting no rise at all. So maybe that will put the 3.5 per cent. in perspective.

    But it is important to keep wage costs down, to accept new technology. If it is important to do all that, then good management and good industrial relations are vital to our future. We heard a lot at Blackpool about how Labour would work with the unions. Of course, they don’t really mean that. What they mean is a cosy get-togethers at No. 10. That is the old pals’ act. It has nothing to do with life on the shop floor and that is where the real problems are sorted out.

    When I travel overseas, time and again they say to me, “Strikes. You have so many strikes. If it were not for that we would give you more contracts. We would invest more in Britain.” In vain do I say that private industry has very few strikes. But the fact is that the much publicised disruptions in the public sector do Britain down every time. I only wish that some of those trade union members on strike in the public sector would realise how many jobs their actions lose—oh, not necessarily their own jobs, but the jobs of people in manufacturing industries, whose taxes pay their wages. We can’t say it too often—“Strikes lose jobs.”

    Mr. President, it’s going to take a long time to get employment up sufficiently, to get unemployment down as far as we all want. The task is even harder because we are going through a phase in Britain when the number of people of working age is rising.

    There are many more more young people leaving school and wanting jobs than there are older people reaching retirement. Over a period of eight years there will be 1.25 million extra people of working age. So even without the recession we should have needed a lot more new jobs just to stop the number of unemployed rising. That shows you the magnitude of the task. Today’s unemployed are the victims of yesterday’s mistakes.

    Government destroyed jobs by fuelling inflation; trades unions destroyed jobs by restrictive practices; militants destroyed jobs by driving customers away. But that is the past and whatever the problems, we have got to tackle them, not with words, not with rhetoric, but with action. Rhetoric is easy but it does not produce jobs. Indeed, if rhetoric could cure unemployment we would have jobs galore by this time.

    Now for the future, you heard from Norman Tebbit that every 16-year-old who leaves school next year will either have a job or a year of full time training. Unemployment will not then be an option, and that is right. But, of course, the Government can’t do everything.

    If we are to beat unemployment—and we must—we have to do it together. The Government’s getting inflation down, interest rates down, reforming trade union law, cutting regulations and removing restrictions. The rest is up to industry, the work force and management in partnership. Because in the end it is private employers who will produce the great majority of jobs.

    Mr. President time and again history beats out the same message. Competition is better for the consumer than State control. We are acting on that conviction. Three and a half years ago defenders of the status quo tried to brand denationalisation as irrelevant. Now the critics are finding it harder to ignore the evidence of their own eyes. They cannot help seeing the new, long-distance coaches speeding down the motor-ways, at very much lower fares. They cannot miss the success of Cable and Wireless or British Aerospace. Britoil will be the next to be denationalised and British Telecommunications after that. How absurd it will seem in a few years’ time that the State ran Pickford’s removals and Gleneagles Hotel.

    Mr. President we are only in our first term. But already we have done more to roll back the frontiers of socialism than any previous Conservative Government.

    And in the next Parliament we intend to do a lot more. And we are seeing increasing evidence of the savings that can be made. Local authority after local authority has found that even the prospect of contracting out their refuse collection produced amazing economies from their staff. As Dr. Johnson nearly said: “Depend on it, when you know you are going to be privatised in a fortnight it concentrates the mind wonderfully.”

    And I hope that every Conservative councillor in the land will act on what Councillor Chope of Wandsworth told us. Wandsworth has gone out to private contractors and down have come the rates. And don’t we all want that. Where Wandsworth has led, let other Conservative councils follow.

    Mr. President I would like to say a word about the Health Service. Because value for money is just as important in the Health Service. Our opponents’ picture of us as a party that doesn’t care about the Health Service is utterly untrue, and is particularly ridiculous from the Labour Party. When they were in office they had nearly 2,000 fewer hospital doctors and 40,000 fewer nurses than we have, and every one of them was then much worse paid than today. But that same Labour Party now supports those who are disrupting the National Health Service and lengthening the very waiting lists that we have brought down. What sort of twisted compassion is that?

    “I believe that we should condemn industrial action with its damage to the Health Service, whether it comes from doctors, nurses or anyone else who works in the service.” Those aren’t my words; that were the Labour Minister of Health’s, David Ennals , when he was in charge. He supported him because it was true then, and it is true now. We have a magnificent record in the National Health Service. We heard that splendid speech from Norman Fowler in one of the best debates in this conference. This year we are spending 5 per cent. more in real terms on the Health Service than Labour, so under Conservatives we have more doctors, more nurses, more money. Hardly the behaviour of a Government bent on destroying the Health Service.

    Naturally, we have a duty to make sure that every penny is properly spent, and that is why we are setting up a team to examine the use of manpower in the National Health Service. Naturally we have a duty to do that. It is part of our duty towards the taxpayer. Of course we welcome the growth of private health insurance. There is no contradiction between that and supporting the National Health Service. It brings in more money, it helps to reduce the waiting lists, and it stimulates new treatments and techniques. But let me make one thing absolutely clear. The National Health Service is safe with us. As I said in the House of Commons on December 1 last: “The principle that adequate health care should be provided for all, regardless of ability to pay, must be the foundation of any arrangements for financing the Health Service.” We stand by that.

    But Mr. President, it is not only in the National Health Service that our record has been very good. Next month the old-age pension will go up by 11 per cent., and that despite the worst recession since the 1930s. That is some achievement too. Whatever our difficulties, nine million pensioners have been fully protected from inflation. We gave our promise and we’ve kept it.

    But we do not measure our success merely by how much money the Government spends. The well-being of our people is about far more than the welfare state. It is about self reliance, family help, voluntary help as well as State provision. In a society which is truly healthy responsibility is shared and help is mutual. Wherever we can we shall extend the opportunity for personal ownership and the self-respect that goes with it. Three hundred and seventy thousand families have now bought their own homes from councils, new towns and housing associations. That’s the result of this Government’s housing policy carried through in the teeth of opposition from the Labour Party. We have fought them all the way, and we won. Half a million more people will now live and grow up as freeholders with a real stake in the country and with something to pass on to their children. There is no prouder word in our history than “freeholder”.

    Mr. President, this is the largest transfer of assets from the State to the family in British history and it was done by a Conservative Government. And this really will be an irreversible shift of power to the people. The Labour Party may huff and puff about putting a stop to the sale of council houses. They may go on making life unpleasant for those who try to take advantage of their legal rights, and what a wicked thing it is to do that. But they do not dare pledge themselves to take those houses back because they know we are right, because they know it is what the people want. And besides, they would be making too many of their own councillors homeless, not to mention one or two of their MPs.

    And we want to bring more choice to parents, too. Parents, we as parents have the prime responsibility to set the standards and to instil the values by which our children are brought up. And more of us has the right to blame the teachers for failing to make up for our shortcomings. But we have every right to be involved in what goes on in our children’s schools. As parents we want to be sure not just about the teaching of the three Rs, but also about the discipline and about the values by which our children are taught to live. We have given parents more say in the choice of school. We have put parents on governing bodies. For the first time in modern Britain a Government is really paying attention not just to school organisation, but to the curriculum; not just to the buildings, but to what is taught inside them.

    And we are not afraid to talk about discipline and moral values. To us “Law and Order” is not an election slogan. It is the foundation of the British tradition. And I believe that, looking back on this first Parliament of ours, it will be said that we have done more to support the police than any British Government since the war. There are more of them, we pay them better, we train them better and we equip them better, and for that you know who we have to thank. I am eternally grateful for the good sense, good humour and loyalty of Willie Whitelaw. Perhaps only I know how staunch he was throughout the whole of the Falklands Campaign, and the difficult decisions we had to take. Thank you very much.

    Mr. President, it cannot be the police alone who are on duty. As parents, as teachers, as politicians and as citizens, what we say and do, whether in the home, the classroom or the House of Commons is bound to leave its mark on the next generation. The television producer who glamourises violence may find his viewing figures ultimately reflected in the crime statistics. And a public figure who comments to the camera on issues of the day should be especially careful what he says.

    The other day, the last Labour Prime Minister—and I do mean “the last Labour Prime Minister” — spoke of what he called “a contingent right” in certain circumstances to break the law. Mr. President, none of us has a right, contingent or otherwise, to uphold the law that suits us and to break the one that does not. That way lies anarchy. The last Labour Prime Minister.

    Mr. President, there are many people in Britain who share the hopes and the ideals of the Conservative Party. They share our great purpose to restore to this country its influence and self-respect. But they are anxious about the future and uncertain about the changes that we have had to make. They have not recognised how far the debating ground of British politics has moved to the Left over the last thirty years. Where the Left stood yesterday the Centre stands today. Yet the British people haven’t moved with it. Instinctively they know that we have to pull this country back to the real centre again. But the anxious say to us “You really cannot do everything at once. The recession and the international economic situation make things particularly difficult. Why not adapt your approach a little, give in for the time being, till things are getting better and then you can start again after the election, next election when you have longer time to do it.”

    Mr. President, to do that would be a betrayal. People in Britain have grown to understand that this Government will make no false promises, nor will it fail in its resolve. How can the Government urge the people to save and build for tomorrow if the people know that that same Government is willing to bend and trim for the sake of votes today? That’s not trusting the people, and it is not the way to be trusted by them. Nothing could be more damaging to our prospects as a nation if this Government to throw away the reputation it has earned for constancy and resolve. It would throw away three years of hard-won achievement.

    On what moral basis would we be entitled to ask for the nation’s support next time? Mr. President, the only way we can achieve great things for Britain is by asking great things of Britain. We will not disguise our purpose, nor betray our principles. We will do what must be done. We will tell the people the truth and the people will be our judge.