Britain Today

MR. KARN:

Mr. Prime Minister, Mr. Premier, Mr. President, Your Excellencies, Mr. Metropolitan Chairman, Reverend Sir, distinguished guests, ladies and gentlemen: Early in June, when talking to the Hon. Mitchell Sharp in Ottawa about possible speakers for the Empire Club during this coming season, I learned that he had served in Canada as Minister of Finance while the Hon. Mr. Callaghan was serving in Westminster as Chancellor of the Exchequer. Their careers as Secretary of State for foreign affairs in their respective countries also coincided.

I was therefore delighted when Mr. Sharp accepted my invitation that night to attend this dinner, even though arrangements were only in the planning stage.

We are extremely happy to have both Mr. and Mrs. Sharp with us this evening and it is a privilege for me to ask our President of the Queen's Privy Council for Canada to bring greetings to this meeting on behalf of Prime Minister Trudeau.

THE HON. MITCHELL SHARP:

Mr. Chairman, Prime Minister Callaghan, Mrs. Callaghan, Premier Davis, Mrs. Davies, other distinguished guests, ladies and gentlemen: I took the precaution, before arising, to find out if I was still the minister, and I found that that dignity still rested on my shoulders. There seem to be some difficulties in Ottawa in replacing me. Mr. Davis sent me a little note in which he said, "Mitchell: Pierre has delayed the press until 9.30. It's rumoured that he has refused your resignation and you are headed to Finance. Enjoy the rest of your dinner."

It is a very happy occasion for me, as my last official act, to bring greetings from the Government of Canada, particularly from Prime Minister Trudeau, to our speaker this evening, my old friend Prime Minister Callaghan. As your chairman has said, our careers have had some parallel. I first met Mr. Callaghan when I was Minister of Finance and he was the Chancellor of the Exchequer. Later, he went into the Opposition, and then came back to occupy the same position as I was then occupying, namely Foreign Minister. Then our careers diverged. His Prime Minister retired. Mine didn't!

May I say to Mr. and Mrs. Callaghan how welcome they are in Canada. I know from my earlier contacts with Mr. Callaghan that he has looked forward to a trip to Canada for some time, and he has finally realized his ambition. I really do envy the Prime Minister of Britain when I think of the way our Prime Minister, Mr. Trudeau, is worried about replacing his Cabinet. Apparently Mr. Callaghan doesn't have any problems like this. None of his important ministers have offered their resignations.

Britain occupies a very special place in the hearts of Canadians. It is the country from which we derived our parliamentary institutions and our fundamental concepts of freedom. We also sympathize with the problems that Britain is now experiencing. I don't think any of us fails to realize that one of the reasons why the British people today are going through the difficulties they are is the sacrifices they have made on behalf of mankind and of freedom and democracy in the past.

Not only has Britain a very special place, but of course its Prime Minister, even if he is of the political persuasion that he happens to be, always has the respect and the support of the people of Canada in his efforts to make and keep Britain a great country.

MR. KARN:

Thank you very much, Mr. Sharp.

Mr. Prime Minister, Mr. Premier, Mr. President of the Queen's Privy Council for Canada, Your Excellencies, Mr. Metropolitan Chairman, Reverend Sir, distinguished guests, ladies and gentlemen: We welcome warmly to this very significant meeting of The Empire Club of Canada our friends from the Canadian Club of Toronto, the British Canadian Trade Association, the English-Speaking Union, the St. David's Society, and the Board of Trade Club of Metropolitan Toronto, to name a few who have gathered with us to receive our guest of honour tonight.

I say very significant meeting because, if my research is correct, only once previously since our club was founded in 1903 has our guest of honour been serving as Prime Minister of Great Britain. That previous occasion was our Diamond Jubilee dinner--February 11, 1964, when Sir Alec Douglas-Home addressed our illustrious gathering in the Royal York Hotel.

However, we do number among our distinguished speakers from Westminster several, who after visiting with us, have risen to that high office of Prime Minister. We mention with gratitude: Mr. Neville Chamberlain, 1922, Mr. Winston Churchill, 1929, the Rt. Hon. Sir Anthony Eden, 1946, and Mr. Edward Heath, 1967.

There is still another category of guest speaker from Britain those who are hopeful of becoming Prime Minister. Need I mention, Sir, the Rt. Hon. Margaret Thatcher, M.P., who graced our rostrum one year ago this month.

Although our guest of honour has been in Canada previously, he had originally planned this time to visit from Vancouver to Cape Breton in just eight days. In spite of an enforced delay at the beginning--which gave us great concern--he has still reserved this evening to be with us, for which we are most indebted to him.

We pay tribute to that great British scientist, Sir Frank Whittle, who spoke to us in Toronto some years ago, for his invention of the jet engine which enabled our guest of honour to recover all but two days of his intended Canadian tour. It is unfortunate, Sir, that you and your party did not recover even more time by flying over in that $3 billion supersonic monument to Anglo-French scientific and aeronautical achievement, the Concorde.

Our speaker began his political career in 1945, in company with his predecessor at No. 10 Downing Street, Mr. Harold Wilson, as Member of Parliament for his present constituency of Cardiff South, in Wales. Without seeking the office of Prime Minister, he has been preparing for it during the intervening 31 years of faithful public service. He has earned the reputation of being one of the most widely and variously experienced politicians at Westminster. He is also one of the very small group who have held all three major offices of state below the level of Prime Minister: Chancellor of the Exchequer, Home Secretary, and Secretary of State for Foreign and Commonwealth Affairs.

Since he took the helm of the British ship of state, his government has agreed with union and business leaders upon a strategy for economic recovery, the main points of which are wage restraints, higher productivity, increased investment, and a strong drive for exports.

We wish him well during his present negotiations with the seamen, thereby hopefully obtaining complete support for his program. Such an accomplishment in a free society today commands the admiration of us all.

Ladies and gentlemen, it is a great honour for me to give you the Rt. Honourable James Callaghan, M.P., Prime Minister of Great Britain.

THE RT. HON. JAMES CALLAGHAN:

Mr. Chairman, distinguished guests, ladies and gentlemen: My wife and I are very happy to be here at this dinner meeting of the members of the Empire and Canadian Clubs. It gives us the opportunity of saying thank you to many people in different provinces of this, the second largest country in the world, for the kindness and hospitality that we have met during our journey.

It is not given to everybody to fulfil their lifetime ambitions. But I am very happy to be in the process now of fulfilling a boyhood dream to travel the length of Canada and to see for myself its beauty, its diversity, its skill and its strength. This particularly struck me today, when I had the opportunity of seeing from the top of the CN Tower a view of the vast productive complex of industry and development that typifies Canada today.

Canada is a country which excites the imagination of the British people. There are few in Britain who do not have relatives or friends who have come to live here. Only a few days ago I entertained the British athletes who had competed in the Olympic Games in Montreal. Without exception I was told that they had never before experienced such warm hospitality, whilst the administrative arrangements had excelled anything in their previous experience. Canada has made many friends among our young athletes, which will strengthen the ties of kinship and friendship which bind us together.

This extended visit of mine is intended to symbolise Britain's recognition of Canada as a country of great and growing significance in world affairs. This is well illustrated by your expected membership of the Security Council of the United Nations next year, and your joint chairmanship of the Conference on International Economic Co-operation, and of course you are making great contributions to United Nations Peace-keeping Forces, as well as continuing to play an important role in the defence of the North Atlantic and Europe.

The purpose of my visit is to strengthen the partnership between Canada and my own country. Because Britain is an old country it has become the fashion to underrate the great reserves of strength and stability that we possess, the massive technological knowledge and experience of our people, and to ignore the achievements and the process of adaptation and change that is taking place.

Misinformed people talk of decline but let me speak of achievements: our nuclear engineering; our medical and scientific instrumentation; our computer manufacturing; our off-shore oil technology; and our agricultural machinery which supports one of the most efficient agricultural industries in the world.

Our industrial system is an old one, the forerunner for most of the world. Now we have embarked upon a new industrial strategy to modernise and broaden that industrial base. Perhaps the element of this strategy that is most likely to ensure its success is that it is being worked out with the active consent and assistance of employers and trade unionists, working together to analyse and propose improvements in 39 separate sectors of industry. They are agreed on the need to regenerate our industrial structure and it is taking place at a time when we have the good fortune of a growing substantial bonus from North Sea oil. Already this year the North Sea oil will contribute nearly $2 billion to our balance of payments. Next year that figure should be more than doubled and by 1980 Britain will be self-sufficient in our oil supplies. This will be worth more than $11 billion a year, all of which will represent an improvement in our balance of payments.

I repeat that this will be a bonus, for we are working on the assumption that our long term prosperity depends upon a successful regeneration of our industrial system.

We are placing great reliance upon the Social Contract entered into between the government and the trade unions. As a result of this combination of circumstances, Britain has a great opportunity to emerge in the 1980s as a most powerful economy. Britain and Canada therefore have much to contribute to each other, based on our kinship, our history, our understanding, our affection and our joint interests. Yours is a land of great opportunity with a tremendous future, and I shall return home determined to play my part in making our partnership thrive.

We shall be working together in a world whose fortunes and economies are increasingly interdependent--a world which has recently suffered a major industrial recession. In some measure it is true to say that inflation and unemployment have had their roots in national policies, but these twin evils are also products of the world recession. The booms that took place in a number of national economies in 1972 and 1973 took place simultaneously and resulted in an explosion of the prices of commodities and an over-plentiful supply of money, whose effects were compounded by the unprecedented leap in energy prices. Together these produced a deeper world recession than we have witnessed since the 1930s. Each country has a responsibility to take its own measures to overcome inflation and reduce unemployment, but there is an increasing understanding that our economies are interdependent and that what one country does may have a major impact on others.

The present preoccupations of the major industrial countries of the world are to achieve a rate of growth in our economies that can be sustained whilst at the same time overcoming inflation and reducing unemployment. As individual countries our economies do not always move in step. Although that is not necessarily a disadvantage, for my country it is a matter of concern at the present time that the rate of growth of industrial activity in a number of other countries is slowing down, for at this very moment our economy is beginning to grow faster. It will be important to ensure that all our countries maintain a rate of economic growth that can be sustained in the longer term. Both Canada and Britain must play an active part in international discussions to achieve this end.

It is a matter of concern that in the ten major industrial countries as a whole there has been virtually no change in the total level of unemployment during the past year. It is falling in very few countries and in some countries it is still' rising. There is as yet no international agreement as to whether all our policies will ensure that unemployment falls to the levels to which we have become accustomed since the Second World War. I confess to some doubts as to whether they will and add that people will not be willing to accept a situation in which the statesmen of the world seem to be incapable or unwilling to develop policies to overcome the scourge of unemployment, particularly among the young. I cannot accept the idea that large numbers of young people must leave school to go into unemployment. This is socially and morally corrupting and disastrous. In the United Kingdom we are exploring new ways of ameliorating the effects on young people in the present recession, and some very imaginative schemes are being developed; but both here and with my colleagues in the Council of Europe I shall be laying great stress on the importance of finding lasting solutions to the whole problem of unemployment. It must be our continuous task in our international discussions to find lasting solutions.

One particular problem I must raise is the future of those economies--Japan is a near example--with vast balance of payments surpluses. Their output has risen strongly, their exports have leapt ahead, but their imports have lagged behind. This situation is causing concern in Britain and in other countries of Europe and the world. Of course we' want to boost world trade--the UK is nothing if not a trading nation--but trade must be reciprocal. For example, as a result of her policies Japan had a balance of payments surplus of $2.8 billion in the first six months of 1976. I advance the view that the world cannot achieve a healthy balance in its economy on the basis of vast export surpluses in certain countries and that whilst we all have a responsibility to correct this imbalance, a major responsibility rests upon the surplus countries themselves.

We should not fall into the error of assuming that the western industrialised world is alone in its troubles. Eastern Europe has its problems too. Not all of the targets of the last five-year plan in the Soviet Union were achieved. Consumer interests in the Soviet Union seem to be accorded a rather lower priority than they have had in recent years despite their importance as incentives to greater productivity. Mr. Brezhnev himself has stressed the difficulties which the Soviet Union will need to overcome because of the increasing cost of extracting raw materials, and because of the Soviet Union's need to invest heavily in their economic infrastructure at a time when the labour force will be growing at a smaller rate. It may be that the Soviet Union's economic growth will itself slow down during the next five years. At the same time, eastern Europe has accepted very large credits from the west for its own industrial development, and their indebtedness to the rest of the world has increased substantially.

There are those who argue that growth in the east/west trade, particularly if financed by credits from the west, will serve only to assist the growth of Soviet armed strength. Whilst we should take due note of the fact that the Soviet Union has in fact been building substantial armed forces, nevertheless I believe that the development of economic relations can increasingly involve the Soviet Union in. a more stable and beneficial relationship with the west which it will not be in their interest to disturb. This policy has become known as detente, and as a signatory of the Helsinki Agreement we accept its implications in all the fields of economic relations, cultural exchanges and human relationships and we look to all signatories & do the same. Nevertheless, we should give the Soviet Union no reason to underestimate the long-term risks to this agreement if they pursue policies in parts of the world other than Europe that are at odds with the policy of detente.

We have in common with the Soviet Union the desire to achieve a sufficient degree of stability to avoid the horrors of war. We proceed on the assumption that the Soviet Union is in earnest in its wish to improve relations between states. We must nevertheless not lose sight of the fact that, as the Russians' own statements have told us, the ideological struggle will continue. Nor must we be blind to Soviet priorities in the third world. Britain stands for the right of the people of Namibia and Rhodesia to free themselves, and the west must beware of being wrong footed in the struggle that is going on in these territories and which will gain momentum.

In my judgment we are at the moment making the correct response. The mission of Dr. Kissinger to Africa is one which I welcome wholly, for he is proceeding on a basis which recognises that the black community in Rhodesia must secure their own majority rule and their independence, whilst offering the white minority a secure future. In Namibia also the policy is clear, namely that this territory should become independent and free. In South Africa it is the policies of apartheid which will fail, for these policies are not morally right.

This brings me to the question of the current dialogue at the Conference for International Economic Co-operation between the industrialised countries and the developing world. We owe a considerable debt of gratitude to Canada for providing a joint chairman of the Conference in the person of your Minister of External Affairs, Mr. MacEachen, and for his skilful and patient co-chairmanship. We are particularly glad that the Conference has now got back to work and we attach great importance to a satisfactory conclusion to the Conference in December. Britain, like Canada, will play her full part. Our position on a number of unresolved questions is well known and we shall take a positive and constructive attitude in order to try to ensure the success of the Conference.

If that success can be achieved it will provide a useful forerunner to the Commonwealth Prime Ministers' Conference which will take place in London next year. This Conference, now made up of 36 member nations, will represent another stage in our efforts to strengthen the developing nations of the world. It was for this reason that two months ago, when we in Britain cut our public expenditures in almost every field, we left untouched the sums that we had voted for the purpose of overseas development and aid to the poorer countries of the Commonwealth and other parts of the world.

Coming to our own affairs, I do not see in any way that Britain's membership of the European Community has weakened our relationships with Canada. Indeed we warmly supported, and gave every encouragement to Canada to become the first developed country to reach an agreement of commercial and economic co-operation with the European Community. But we naturally do not wish to see the Community supplant our relations with you, based as they are on our historic ties and our close personal relationships. We shall continue to look to you as a secure economic and industrial partner, a secure source of supplies of all kinds, not only the traditional food and raw materials but also your industrial products. At the same time we wish to 'sell you more than you buy from us at the present, and I am sorry to see that Japan is now the second largest exporter to Canada instead of Britain. We have much that we can offer you in capital and industrial goods as well as consumer goods, and I was very happy to hear in some of the western provinces that they feel that British business is playing its full part in taking advantage of the growing economic development of those provinces. In the field of aero-engines there is a prospect of doing worthwhile business and we also see prospects for cooperation between your Department of Energy and Mines and our own National Coal Board which has developed new coalproducing equipment and new and different techniques for coal utilisation. The British government is encouraging British industry to develop further its trade with your stable and expanding market, not only in eastern Canada, but also in western Canada. We are ready to explore with you cooperation in all industrial fields that can be of mutual benefit, for our countries have a common understanding and a common outlook.

Our two governments share a deep commitment to containing the dangers of further proliferation of nuclear explosives. We both act responsibly as nuclear exporters and accept safeguards on our civil nuclear installations, and we hope soon to conclude a new arrangement with you to cover civil nuclear transfers. There is considerable nuclear co-operation between the two of us in a field in which we are amongst the world leaders. It is our desire that this co-operation should develop to the benefit of both our nations. We hope that eventually all countries will realise, as we have done, that the acceptance of international safeguards of the full nuclear fuel cycle is the best way to build up international confidence in a world regime that will prevent proliferation and so ensure the safety of the next generation.

Finally, a further word about Britain's industrial regeneration and the Social Contract, a concept which I find is of increasing interest to other countries. This understanding, reached between the trade unions and the government, is not only about wages and labour relations. If it were so, it would not endure. An essential condition for its success is that the government takes the trade unions actively into consultation about new government policies, j especially in the economic and social fields. It is more than a matter of keeping the trade unions informed of what government is doing or proposing. It is a meaningful consultation about alternative policies and about priorities in the social field. As such it has already begun to produce valuable results and has stood up to many strains. You are aware that since last year the trade unions have voluntarily undertaken to limit their wage settlements. Only last week a proposed strike by our seamen, against what they regard as the rough justice of the last pay deal, was averted by the intervention of the other trade unions themselves.

The time has come to correct the fashionable impression that because of some well-publicised disputes Britain is a strike-ridden country. It does us immense harm and is not true. Last year was a good year, and as for 1976, so far we have had fewer stoppages that at any time since the early 1950s. Indeed if you will allow me to say so, our strike record is better than either the United States or your own.

The Social Contract has contributed to this improvement and has also enabled us to launch a combined attack on the problem of inflation. I am glad to say that our inflation rate has gone down dramatically from over 26% to about 13% during the last twelve months. The trade union movement is at one with the government in the view that the best long-term method of reducing our unemployment is to overcome the problem of inflation, and they have given their full support in this difficult task.

As part of the Social Contract the government has given undertakings to ensure that the worst-off section of our community does not suffer unduly. Following on this, there has been agreement among ourselves between government, industry and labour together, that the balance of payments, increased investment in our manufacturing industry and the better use of our existing investment must take priority both over personal consumption and over our desired social objectives. The results are to be seen in our rising export figures which during the first seven months of this year have gone up by 6 1/2 % in volume compared with the same period last year. I do not know whether what is happening in Britain has any significance for other countries for conditions are everywhere different. But it may be that we are pioneering in a new approach to overcome problems that are being experienced by all the western industrialised countries in a greater or lesser degree.

We are now at a watershed in Britain's history. I believe there are rational grounds for optimism, for Britain is better poised now to achieve a new industrial thrust and new and stable prosperity than it has been in my lifetime. The British people know that this will not be achieved overnight nor without considerable effort, but we are working towards a Britain that will be economically powerful and socially just.

MR. KARN:

Ladies and gentlemen: I now call upon Mr. Alan Leal, our immediate Past President, to express our appreciation.

MR. LEAL:

Mr. President, Mr. Prime Minister, Mr. President of the Privy Council, Mr. Premier, Your Excellencies, and ladies and gentlemen: There may be those of us who were concerned lest the Prime Minister of Great Britain might not be able to accept our invitation due to yet another crisis at home. In this connection I am reminded that at one stage during the Second World War, the gentlemen of the press were nipping at Churchill's heels for some alleged indiscretion involving Cabinet secrets. During that altercation, Churchill, as Chancellor of the University of Bristol, was addressing a group of students. He said to them, "Thank you very much for inviting me here. I appreciate it, particularly since I read in the newspapers that I am in a bit of a fix."

It would appear that in our world and in our time, crisis is endemic. I suspect that in these circumstances it takes a high degree of courage and a special kind of "un-wisdom" to accept the reins of office and particularly the burdensome duties of the high office of Prime Minister of Great Britain. I am aware that crisis diplomacy is neither new to the office nor new to the man. It was Palmerston, I think, who said, that all his difficulties should be attributed to rotten Irish potatoes. There is some of that problem left, unhappily.

Mr. Prime Minister, there is one point on which we, as Canadians, would deign to offer you advice. In the aftermath of the Kilbrandon Report, involving the aspirations of the Scottish nationalists, the Welsh nationalists and any other nationalists about, we in Canada can be of good advice to you in Britain, because we have solved the problems of a federal state. Indeed, the Premier of the province tells us that this week we are about to solve them again! Mr. Prime Minister, I think if we have not solved them, we may with you strive that those problems which we cannot solve and will not solve we may learn to live with in a more civilized way.

Sir, may I say to you that it is a privilege indeed, a rare privilege and an honour, on behalf of the burghers of Metropolitan Toronto, the members of The Empire Club of Canada and their guests here this evening, to thank you most sincerely, and Mrs. Callaghan with you, for your presence here, and to also thank you for your address. Please accept our sincere appreciation.

MR. KARN:

And now, ladies and gentlemen, may I say on your behalf how highly honoured we are, tonight, in having with us the Honourable William G. Davis, Q.C., and Mrs. Davis, to assist in hosting our guests from Britain.

I am delighted to call upon the Premier of our Province to bring greetings to Prime Minister Callaghan. Mr. Davis, please.

THE HONOURABLE WILLIAM DAVIS:

Mr. President, Mr. Prime Minister, Reverend Sir, High Commissioners, Mitchell, Mr. Chairman of Metropolitan Toronto, ladies and gentlemen: The reason I say "Mitchell" is that I am informed that the Cabinet shuffle has now taken place and you have not become Minister of Finance as I rumoured to you a few moments ago.

I am delighted to bring greetings to you, Mr. Prime Minister, and to your very charming wife, on the occasion of your visit to Ontario. I have to be very careful, because under our constitution, premiers of provinces are not to have any dealings with heads of state of other countries. We have to do it sub rosa. If you have a surplus of oil, I would be delighted to discuss it, because we need it, and I'm prepared to publicly commit the province of Ontario to $7.50 a barrel, laid down at Come-by-Chance!

The Prime Minister of Great Britain has been on a trade mission of his own. He has been explaining to people across this country about what is happening in the United Kingdom. He sold Peter Lougheed, for Pacific Western Airways, several Concordes when he was there. We can't afford them in Ontario. He bought a little bit of the potash action from Blakeney. That is consistent with your political philosophy, Sir!

Sir, I would like to make a small presentation to you from the people of the province of Ontario, to let you know how much we appreciate your visit. You have expressed to every one of us tonight a sense of optimism which we share. The people of our province have always had a great feeling for Great Britain, a feeling which has endured for many generations. On their behalf, I would like to present you with this small memento of your visit to the province of Ontario.

Mr. Davis made a presentation of a Trillium brooch to Mrs. Callaghan and a pair of Trillium cuff-links to Prime Minister Callaghan.