Speech at Guardian Young Businessman of the Year Award (defence of the budget)
|Venue:||Mansion House, City of London|
|Source:||Thatcher Archive: COI transcript|
|Editorial comments:||1230 for 1300. MT put aside her prepared text to answer criticisms of the budget ( The Times , 12 March 1981), though she stood by the press release already issued.|
|Themes:||Industry, Monetary policy, Privatised and state industries, Energy, Public spending and borrowing, Taxation, Family, Leadership, Social security and welfare|
Mr Chairman, My Lord Mayor, Mr Gardiner , Ladies and Gentleman, in your welcoming, charming and provocative speech, Mr Chairman, you made one or two references to me as well as to our guest of honour, Mr. Gardiner . I notice you said I might take up Tom Stoppard 's saying ‘I'm all for freedom of the press it's only the newspapers I hate’. Well now, why should I hate newspapers? Some of them support me and do very well at it. Isn't it better for the sun to shine on your profits, to be able to telegraph or mail your success across the world on pink paper than to be guardian of your losses. It is the second time, Mr. Chairman, that you have very kindly asked me to come and present this award. Previously I presented it to Geoffrey Cross and I remember then saying that what we really wanted to do was to create a climate where enterprise could flourish and I do indeed on this Budget Day repeat that objective and one of the reasons which led us not to increase the standard rates of tax and not to reduce, and not to alter the top rates of tax was the counsel of one of your previous winners, though he won't know it. At one time he said to me, "Mrs T don't take away the incentives now just when they are beginning to work." And I believe we were right not to increase those levels of income tax and that they will soon begin to work.
I have, of course, just returned from the States where there is just exactly that climate of enterprise which really we see such a splendid example in our award winner today. But what struck me over there was that the atmosphere was not one of envy but of enterprise. Not one of, "Oh well, the Government will do that," but "I will do it." Not one of seeking safety but of seeking success. That is exactly what we want to do in this country and that is exactly what our award winner has done today and I am very proud that we have such people staying here in our country to do well for themselves and well for Britain as well.
When I look, Mr. Gardiner , at your career it really has been rather remarkable. I must point out one thing that disturbed me very much, I think the foundation of the groups prosperity long[fo 1] before you exercised your wonderful talents upon it, the foundation of the group's prosperity was to pass over some of its difficult aspects to Government, and we still have some of those shipbuilding, but, like a real sport, you've gone back and gone onto the Shipbuilding Board so you're back dealing with the very problems that your group in fact handed over to us. There are occasions I confess when I feel like a residuary legatee and I don't always like the legacies which I receive and there are occasions when I think that other businessmen, perhaps not quite as successful as your good self, are indeed like Mr. Macawber waiting for something to turn up and that something is the Government. But to them I should point out that Mr. Macawber , in waiting for that, went backrupt several times and eventually emigrated on borrowed money. So it is not perhaps a very good course to follow. When we look at your career you see that there have been certain characteristics in the way in which you approached your business life. First in tackling it you have always looked ahead and been prepared to see what so many people miss, but what we produce today may not be the products that we need to produce tomorrow and that those companies which rest solely on today's products may well not be in business tomorrow, they must constantly look for tomorrow's products. I notice that you are a happy band of companies who actually contribute to rather than take from the Exchequer—Sir Terence are you listening—I do indeed need more of them. After all where else are we to get the money to meet the enormous expenditure that we have to. I note too that you are one of those companies which looks further than instant income and one of our problems today, I think, is to persuade the ordinary person who works in a factory that he really must look beyond next week's pay packet. And if he does not look beyond next week's pay packet there may not be a pay packet beyond that. You pointed out, Mr. Chairman, that you sometimes have problems, if I might put it this way, in getting new technology in the industry which you represent but some industries have to withstand overseas competition and unless they get in the new technology other people will have the jobs and the business and so you, Mr. Gardiner , look further than instant income and you persuade your employees to look further too. You also seize your[fo 2] opportunities, and if I were to detail your achievements they would indeed fill many pages. But it is on many occasions that I have mentioned all over the world your tremendous achievement by deciding to sign up for £200 million contract for rail-cars in Hong Kong's transit system that showed wonderful commercial judgment, it showed a remarkable degree of organisation, drive and vigour, because not only were they delivered but they were delivered early and the whole system was opened early. It says a great deal for your wish to help other people who start up business that your company has invested in 50 per cent of another small company in the north called Weatherseal and doubtless they will profit from your vigour and enterprise. And I know that you are producing vehicles for the new Birmingham Airport transit line from the international airport terminal to the railway, to the exhibition centre. For all these and many other things we do indeed applaud you and I indeed wish that we had many many more businessmen who have that success upon them and who prosecute all of their company's problems, the rule to the success that could be theirs if they followed the path which you have shown.
Now, may I just have a word or two about this year's Budget for next year. I did notice you referred to indirectly, Mr Chairman, and I do hope that this lunch hasn't cost you very much more because of the wine and the spirits, etc. Myself I went on soda water before lunch for that very reason. Now there have been one or two comments on this Budget that haven't been altogether favourable. That is not surprising. People do not usually have a very favourable reaction to a Budget. There have I think been one or two although unfavourable have not been wholly right. May I just have a go at one or two, not a lot, but one or two? Now one or two papers have accused it of being a very highly deflationary Budget and condemned it on that account. One such paper will not be unknown to you Mr Chairman. Now it is true that next year's Budget measures will increase tax by £3½ billion and that is quite a lot. But it is also true that public spending is up by £6 billion more than was planned a year ago and in fact public spending next year will exceed a £100 billion, that is more than this year in real terms. Now what really gets me is this, that it is very ironic that those who are most critical of the extra tax are those who were most vociferous in demanding the extra[fo 3] expenditure. And what gets me even more is that having demanded that extra expenditure they are not prepared to face the consequences of their own action and stand by the necessity to get some of the tax to pay for it. And I wish some of them had a bit more guts and courage than they have. Because I think one of the most immoral things you can do is to pose as the moral politician demanding more for health, for education, more for industry, more for housing, more for everything and then when you see the bill say, "No, no, I didn't mean you to pay tax to pay for it, I mean't you to borrow more." That nice cosy word called reflation and deficit spending, and what does it mean? Do they really think that had we gone on, policies unchanged, we could have borrowed £14 billion this year at an interest rate of 12%;? Because I tell you we couldn't. We managed to borrow something under £13 billion last year. We didn't manage to borrow everything we spent. And part of it was borrowed with an interest rate of 17 per cent and quite a lot at 16 per cent. And for those who say, "Yes increase you deficit spending, have this cosy reflation," they must face the fact that the interest rate would not have gone down, it would have gone up and then they would have stifled and strangled at birth any rebuilding of stocks or any expansion of industry and investment that we might have had. And so much for that argument. But what else do they mean? I tell you what they really mean, they mean, "We don't like the expenditure we have agreed, we are unwilling to raise the tax to pay for it. Let us print the money instead." The most immoral path of all. Because what that is saying is let us quietly steal a certain amount from every pound in circulation, let us steal a certain amount from every pound saved in building societies, in national savings, from every person who has been thrifty. What they are saying is let's go and put a pair of bellows on to the rate of inflation we have now and make it a really big raging furnace and the first people to come in and complain would have been industry. Of course they would. How could we survive in a competitive world with a rate of inflation above what we have now, when Germany is only on 5.8 per cent? And that is why we have had to take the steps we have. Because the future demands that if we are in fact to have the increased expenditure, and we have in fact agreed to it, let us not run away from the consequences. The only question is, do you cover it by[fo 4] extra taxation and money raised at reasonable interest rates or do you have very high interest rates or do you print it? I believe this Government has taken the wise and the moral course and I will challenge anyone who takes the contrary view. Now that's one thing. I want to have a go at industry. I may say that I've written this all down in much better language but it's not—I've written this all down in much more grammatical and better language, it's not good enough to talk but it's good enough to print so you can … . print it and it will save a lot of people taking it down in shorthand which on a twenty-five hour week they are not always trained to do, particularly as some of the twenty-five hours are ghost hours. So you can in fact just print what I have said. Can I take just a moment longer? I want to have a go at industry-not your sort, the other sort.
Now it is said that we haven't put enough back into industry. I must say that the biggest boost to industry is the 2 per cent reduction in interest rates. Sir Terence was kind enough to say on television last night at his CBI Conference they did demand a 4 per cent reduction in interest rate and he also pointed out that now they have got it. Well, you know, that's not bad to get that in such a short time, but it couldn't have been done without the other things. Industry has got a number of other things. A very good stock relief scheme. We have put another £120 million into reducing electricity and gas prices for the big users. And may I point out that one of the reasons why electricity prices are high in this country is that we get our electricity from coal and not from nuclear. And if we had gone nuclear electricity would be a lot cheaper than it is. But we had to stay on coal. And there is also the small businesses have been demanding loan guarantee schemes. They have now got them and a very good thing too. We have done something for allowances on industrial buildings and a number of other schemes. But when people really say you haven't put enough into industry are they really forgetting that one of the reasons why we have got increased expenditure is because this year over a billion has gone into British Steel and next year and the year after £900 million into British Leyland, I hope to goodness that will be the end of it. Are they really forgetting that more goes into coal or this year £834 million into coal, £309 million into electricity, £800 million into British Railways, isn't that into British industry? And are they[fo 5] also forgetting that one of the reasons why we had to put it into British Steel and into British Leyland was the employment position? But even more than that, added to that, the fact is that there are hundreds of small companies who would not exist unless they supplied bigger companies and we have therefore to keep the bigger companies in existence and doing well in order that so many of the small businesses may profit. So if anyone dares say we have not put enough into industry, you just tot up the bill. It is enormous and we need the companies and men like John Gardiner to provide the income from the successful companies to plough in those which are going through hard times. And I hope that there are many many businessmen here today who will actually ask why so many of their own employees with their own pay packets refuse to buy British goods but buy foreign goods. Because the trouble isn't all with the consumer choice. Some of it might be with the design of the product or the delivery date. My goodness me you are getting a packet of it today. Are you all right? I am sure this is the way he talks to his workers and he gets an award for it. Right, now.
Now, the third point. I just want to point out something which is quite different. The third point. I've lost my place. But never mind, it doesn't matter. I'm in full flood so it never matters then. The third point is this. In spite of everything and in spite of the difficulties, I did want to demonstrate and so did the [ Geoffrey Howe ] Chancellor that behind every good man there is a good woman you know. To demonstrate—so did the Chancellor. First that although we were not able to do more relief on tax allowances we did wish to do something for families and that's why he was so careful to put up the allowances for the children by 50p each. Because we positively wanted under difficult circumstances to show preference for families. And we also positively wanted to do another thing, to do something special this [time?] for the disabled and therefore we doubled the income tax allowances for the blind, put up the travel allowances for the disabled and made a number of reliefs on value added tax for charity. So when people say that it is a no hope Budget, I can only say to them this Budget is the only hope for Britain's sustained and genuine revival and I hope that many people will in fact see it in that light.[fo 6]
Now Mr Gardiner, may we for a moment, may we just return to your very very successful career? You have shown remarkable qualities. You have had to make tough decisions. You have had to be clear minded. You have had to be decisive. You have had to be firm. You have had to be tenacious. You have had to find the money to pay the bills. You have always had to look to the future. That single-mindedness has brought confidence that your strategy is right and the Guardian has rightly singled you out for an award. But Mr. Chairman, I could also apply those same qualities, tough, clear minded, decisive, firm, tenacious, find the money to pay the bills, always has to look for the future, single-minded and confident, I could also apply those same qualities to one or two well-known politicians, and I wonder if the Guardian will be consistant and have single standards, and I wonder as it singles you out for an accolade for those qualities in industry if it might actually by applying the same principles single out certain other people in politics for a similar accolade in politics. But Mr Chairman, I am a realist, so I don't in fact hope too much. And we do in fact live in a world of reality and in that world of reality we have some absolute winners in British business and we've got one here with us today. And I am delighted both to raise a toast and to present the award to Mr. Gardiner for his splendid record in Laird and for staying with the company and showing that the good record is due to his decisions, he has been there ten years and I hope to emulate your example in another sphere. Mr. Gardiner a winner in today's world, a winner in tomorrow's world and a winner for Britain. Will you join me in a toast? "Our award winner, Mr. Gardiner ".