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we think such a cut is so important. We have relaxed the exchange
controls. We have introduced new policies to encourage the small firms
from which we believe that much growth can come.
So we are doing what in short is returning to free enterprise.
I can't tell you whether we are going to succeed. We are going to do our
best. Probably over the next year or two we should have a difficult time.
But we have to stick to our guns. And we are encouraged by two examples.
Firstly California, where as many of you may know, Proposition 13 which was passed a year or more ago to cut taxation has in fact resulted in a
large increase in employment. The critics were forecasting an increase
in unemployment. What has happened in fact is, a reduction in employment
in the public sector and a dramatic increase in employment in the private
sector. And, secondly, we are encouraged by the example of Hong Kong to
which a good many Ministers in British Government had paid a visit and
they had uniformly been impressed by the example which you show of the
success of a combination of order and free enterprise. Now these domestic
policies, Mr. Chairman, I believe are relevant for Hong Kong. (The Domestic policies of the Government of Great Britain). I had many remarks
made to me during my visit about the position on textiles. I just want
to make the general point that if we are successful in creating the new
dynamic attitude in industry which we wish to do. If we create a British
industry which is more ready to change then the problems of admitting
foreign goods from East Asia and other developing parts of the world will
be diminished and this we are firmly resolved, and one of the reasons
we are firmly resolved to pursue economic policies which I have mentioned.
But of course, Mr. Chairman, economic success or failure are also directly relevant to the conduct of foreign policy. As Ernest Bevin used to say
when he was first British Foreign Secretary after the war, he said
me 10 million extra tons of coal and I can pursue a positive foreign
policy.'
'Give
I want to mention three aspects of British foreign policy.
First, the European Community. I believe that the most important aspect
of British membership of the European Community is not the question of
better markets but on the question of exactly how we arrange our common agricultural policy. The European Community is concerned with the survival
of a free way of life in Western Europe. We have therefore to work together.
/We have