Margaret Thatcher Freedom Lecture at the Heritage Foundation

Thank you very much Mr President.

It’s fantastic to be here at the Heritage Foundation 50 years after this great institution was established. 50 years of fighting for freedom. 50 years of taking on the corporatist consensus. 50 years of arguing against communism, against collectivism, against socialism and I’m delighted to see that you’re establishing a new Freedom Centre. It says outside ‘Freedom Centre coming soon’. Well, it couldn’t come soon enough because we need more freedom.

I’m also hugely honoured to be giving this year’s Margaret Thatcher lecture 10 years after her passing away – a very sad moment, but we know that her ideas live on.

It’s over 30 years since the end of the Cold War and I think we all remember how it felt at the time: the excitement that we felt; the hope that we felt that freedom and democracy had won; that we were entering a new era of prosperity, a new era of hope, a new era of freedom for all of the world.

But we have to ask ourselves how do we feel now. Do we feel freer? Do we feel that free enterprise has triumphed? Do we feel that we are able to say what we think in an open society? And I’m afraid the answer to all three of those questions is no. And what I want to talk about today is how is it after the massive triumph of our ideas, that core Anglo-American heritage that won the Cold War, how is it after the triumph of those ideas that we now find ourselves on the defensive? We find ourselves on the backfoot.

And key ideas like the idea that the best people to make decisions about their own lives are people and their families. Or the idea that growth powered by free enterprise is the best way to create prosperity for our countries. Or the idea that it’s about your individual characteristics that’s important, your hard work and your talent, not what sex you are or what race you are, those things are not so important. How is it that those ideas have fallen by the wayside? How is it that these ideas have been lost, and that our sense of self belief seems to be dissipating?

It was Margaret Thatcher’s great ally, Ronald Reagan, who said: ‘Freedom is never more than one generation away from extinction.’ Well, I’m afraid that we are dangerously close to that point now.

The fact is that people who hate freedom have been gaining ground. We know that there are proportionately fewer people living in democracies now than there were when Mrs. Thatcher left office. And we can see across the world, our opponents and our adversaries acting with impunity.  Whether it’s Vladimir Putin and his appalling invasion of Ukraine, an unprovoked invasion of a free democracy; or whether it’s President Xi and the build-up of armaments in China and the menacing of the free and democratic Taiwan. And all this time, what we’ve seen is accommodation and appeasement by the West of these authoritarian regimes.

We allowed China to join the World Trade Organisation on very favourable terms and they are still designated a developing country. We saw Europe becomes dependent on Russian gas. At the same time as we were talking about climate change, we were importing more and more Russian gas and pouring more and more money into the coffers of Vladimir Putin. And what I think those regimes saw is, they saw our weakness. They saw our lack of belief in ourselves and they weaponised that weakness, they weaponised that lack of belief and they stirred it up in our countries.

And this is despite the fact that it was those core beliefs, those core tenets, that made the world prosperous in the first place. The fundamental idea of freedom and self-determination, so different from the top-down tyranny of Russia and China. These ideas made us happier and they made us stronger. The idea of low taxes, limited government and free enterprise. Those were the ideas that won the Cold War by giving us the economic strength to succeed. And what I worry about now, is that we’re seeing these economic ideas, this economic model, strangled into stagnation.

We’re facing threats from within and without. A few weeks ago, we saw President Xi visit Moscow and we can see more clearly than ever that Russia and China, those two authoritarian regimes, are working together. China is buying influence around the world through its Belt and Road Initiative and other security agreements. We can see Russia with the Wagner group, working in parts of Africa, working in parts of Eastern Europe, seeking instability. We should have no doubt about what their intentions are. What they want is their version of the world to prevail. That is what is under threat. And they’re pretty blunt about it. As Sergei Lavrov, who was my counterpart when I was Foreign Secretary, said: ‘This isn’t about Ukraine at all. It’s the world order.’

Now, in response to this, what we’ve seen are some elements of isolationism here in the United States and elsewhere. People say: ‘well we shouldn’t really care about this, it’s in a different continent. It doesn’t really matter to the concerns of American citizens. What we should be worrying about is China. That’s the real economic threat to the United States. That’s the real threat that we face today’.

But can you imagine what would happen if Vladimir Putin was successful in Ukraine? If he was successful at extinguishing a free democracy? What lesson would President Xi take from that? He would take the lesson that he could act with impunity with respect to Taiwan. It would embolden him and it would embolden Russia to do more in Europe.

And an invasion of Taiwan wouldn’t just be a threat to freedom and democracy in Taiwan, which is of course important, and it wouldn’t just be a threat to freedom or democracy around the world; it would be a direct economic threat to us in Europe and you on the other side of the Atlantic. Whether it’s the semi-conductors that power so much of our high-tech industry, whether it’s the shipping routes that we need to keep global trade going, China gaining control of the Taiwan Strait would have a devastating effect here in the United States. And what we know with these authoritarian regimes working together is we can’t divide the world into the Atlantic and the Pacific. What we can divide the world into is free democracies and autocracies. That is the battle we’re all fighting and we can’t just ignore that the battle; the battle isn’t going to go away. The battle is here and it is the battle of our generation.

Our adversaries are very clear that they’re working together and we need to work together. And I believe that we cannot abandon free democracies anywhere in the world, it will simply create a domino effect. I’m proud about what the United Kingdom has done to stand up to authoritarian regimes. We were the first country in Europe to send weapons to Ukraine to help them defend themselves. We led on the sanctions that were put in place on Russia and made a real difference.

But there’s no doubt in my mind that we need to do more. We need to do more to end this war as soon as we can. That means supplying fighter jets. I’d like to see us in the UK supplying fighter jets. I’d like to see the US supplying fighter jets to help the Ukrainians. And I also believe we should fast-track Ukraine’s membership of NATO. We should have done it years ago, but the best time to do it will be now because until they have the umbrella of protection, until they’re able to be part of the NATO alliance, this instability will continue.

And I think the fact that those in Eastern Europe who really understand the Russian threat more than anybody else are advocating it is so vitally important because every day longer this war takes will be more people in Ukraine suffering, there’ll be a greater cost to rebuilding Ukraine for the free world after the war. But also the more that authoritarian regimes will become emboldened and the greater the cost for all of us later on of not acting now.

But I want to be clear supporting Ukraine is not a distraction from supporting Taiwan. And Supporting Taiwan is not a distraction from supporting Ukraine.

Putin and Xi have made it very clear that they are allies against Western capitalism. That’s why I think it was a mistake for Western leaders to visit President Xi and ask for him to intervene in seeking a resolution to the conflict in Ukraine. I believe that was a sign of weakness. It’s also why it’s wrong for President Macron to suggest that Taiwan is simply something not of direct interest to Europe. I don’t agree with that at all. It is of direct interest to Europe. And I think we should be doing all we can to make sure Taiwan has the support it needs to defend itself.

We should be working with G7 allies, including the United States, including the European Union, including our friends in the Pacific, Japan, but also other other countries that aren’t part of the G7 such as South Korea and Australia. We should be working with all of those allies to do all we can to support Taiwan now. And we need to put economic pressure on China before it’s too late. We need to learn the lessons that we didn’t learn from Russia.

I’m proud the United Kingdom has stepped up with the development of AUKUS. I think that’s very important. I’d like to see Japan join. I’d like to see Canada join AUKUS. I’d like that to become a real Pacific-wide alliance. We’ve also signed an agreement with Japan so we’re going to do joint exercises and we’re going to share intelligence. And the UK has also joined the Trans Pacific Partnership, the CPTPP, the massive Pacific trade agreement. Again, I think that’s important. I think it’s important because I’m a free trader and I believe in free trade, but I also believe it’s important because it’s a bulwark to China. And I urge our British government and any future British government, that they must never allow China to join the CPTPP.

What we need to find ways is ways of trading in a deep way with our friends and allies, not with those who are seeking to undermine us and seeking to undermine freedom and democracy. I hope that the US will reconsider pulling out of the TPP. It was a US initiative in the first place. I believe it was a good idea. And if the US joins, first of all, it will be a benefit to US consumers. Secondly, it will help strengthen Indo-Pacific security. Finally, now that the UK is a member, it will be a fast-track route to a UK-US trade deal. What’s not to like?

And now more than ever, I believe our relationship, our strength, is needed. Because we’ve got to ask ourselves after the success of winning the Cold War, why is it that authoritarians are on the march around the world? Of course, it’s President Putin who’s responsible for the appalling actions in Ukraine, but we have to ask ourselves, what was it about what we did that we could have done differently? I fear that we showed weakness. We didn’t invest enough in our defence, we didn’t make sure that we were economically robust and we made it easier for Putin to act with impunity.

And at the heart of that, is the fact that our economies simply haven’t been growing fast enough. We’ve seen low growth now for several decades. And this is particularly acute in the United Kingdom. Real incomes haven’t increased significantly since the financial crisis and the average GDP per capita in the UK is now 30% less than it is in the United States. That is not a good position for us to be in. It was much closer two decades ago. The symptoms that we’re seeing are low growth, we’re seeing high cost of living and we’re seeing real wages having declining value. The disease is ever larger government and we have to ask ourselves, with our economies in the state they are now: are we going to be match fit to take on China in the decades ahead? And are we going to be able to make the case that our model, Anglo-American capitalism, is better than Chinese state capitalism?

The sad truth is what I think we’ve seen over the past few years, is a new kind of economic model taking hold in our countries. One that’s focused on redistributionism, on stagnation and on the imbuing of woke culture into our businesses.

I call these people the anti-growth movement and they come in many shapes and sizes. There are the vested interests who don’t want challenge and don’t want competition – they’ve always been there. But they’ve been joined by socialists in environmental clothing who, in the name of combatting climate change, insist that we should simply stop virtually every kind of economic activity. And then we have the ESG culture, perpetrated by many in big corporations, where the focus is on hitting a diversity target or hitting a social target rather than actually generating money for employees and for the country.

Of course, this model results in more taxes, it results in more subsidies and it results in more regulation. I think we can see that with President Biden’s Inflation Reduction Act. It’s going to cost US taxpayers $400 billion, it’s going to encourage US industry to spend their time rent-seeking and going to the government for those subsidies and it’s also going to cut competitors out of the market, including companies in the United Kingdom.

Another good example is the UK ban on fracking. This is despite the fact that energy costs in the UK are twice what they are in the United States. And what we are now doing is we are buying fracked gas from America. We are freezing it to minus 260 degrees Fahrenheit. We’re transporting it across the Atlantic Ocean, and then we’re regassifying it in Britain. Now why on earth does that make economic or environmental sense? It simply doesn’t.

Or what about our defence industries that are struggling to get investment because they’re not being socially acceptable? Just at a time when we’re using more weaponry to help support the Ukrainians, our defence industries aren’t able to raise the funds they need in all cases because of some of these ESG requirements. Across the board what we see is it’s getting harder and harder to get things done. And it’s getting harder to get on.

Overall, the Anglo-American model of capitalism is being subverted and the Heritage Foundation itself, its own Index of Economic Freedom has shown that the US and the UK are falling down the league table. And in fact the UK has now fallen behind Germany in terms of our level of economic freedom. I fear that our countries are becoming social democracies by the backdoor.

We’ve ended up in a culture where too many people and too many businesses expect a bailout. Now one of the core beliefs of Margaret Thatcher was the belief in personal responsibility. It was the idea that it’s down to you, how you get on in life. That through your own ideas, your own hard work, through your family, you can make your way in the world. That was the core idea. But I think that notion has been eroded. I think we can all understand why. Back in the financial crisis many people who made the wrong decisions in the banks didn’t feel the full responsibility and accountability for what they’d done. They were bailed out. And lots of people ask the question, ‘well, if we’re going to bail out some of the richest people in our society, why shouldn’t I be entitled to some money from the government?’

And that’s the culture we’ve created. So we’ve ended up in a situation following the financial crisis and following COVID, where there was even more money given out and supplied by the government – in the UK that amounted to £400 billion, I think in the US, it was $5 trillion – we’ve ended up in a situation where people see the government as the concierge:

‘I’ve got a problem, I’ll call the government. My business is failing, I’ll get on the phone and sort it out. My investment isn’t doing very well, it’s the government’s problem. I can’t buy a house, I need to call the government.’

But I can tell you as somebody who has worked in government for many years, that is not the answer and it’s not sustainable.

I don’t think people really understand how big the government actually got. If you listen to some of the left-wing media and the left-wing commentators, you would think we’re living in some kind of Ayn Rand skeletal state. It’s not true.

At the turn of the millennium, the state was spending 29% and 36% of national income in the United States and the United Kingdom. Today, those figures are 35% in the US and 47% in the UK. That is virtually half of every pound in Britain is now being spent by the state.

It all makes the eras of Bill Clinton and Tony Blair look like some kind of libertarian paradise.

And I really worry that if we don’t change course now, those figures are going to get even worse because all of this state spending just creates more demand. More demand for subsidies, more demand for higher taxes, more demand for regulation. It becomes a vicious circle. And everybody who’s affected, the entrepreneurs, the businesses, the landlords, they look to the government rather than looking into what they could do to get on and this has been aided and abetted by the central banks with artificially low interest rates, pumping more money in and keeping that whole system going.

Now, the reason I’m in politics, and the reason I remain in politics, is I don’t believe that’s what ordinary voters want. I don’t believe that this is the society that people in Main Street in the US or the High Street in the UK actually want to see. I believe that people want to have control of their own lives, develop their own futures, have their own businesses. I don’t believe they want to be dependent on government handouts. People aspire to a higher standard of living, they want their children to have a better life than they had. And that is what we have to deliver but it’s becoming harder and harder to deliver in this low growth world that we’re now living in.

When I was in No. 10 Downing Street, I tried to change this. I think if you are somebody who’s not worked in government, you perhaps don’t understand quite how hard it can be to get things done and to make that change. Boris Johnson said it was like one of those nightmares where you simply can’t move your feet. Tony Blair talked about the scars upon his back. I spent many years in government, I knew it’d be difficult. But I still didn’t understand quite how hard.

In my 10 years as a minister, I’ve seen all kinds of producer interests. Whether it was the legal establishment, the education establishment, the environmental establishment, the agricultural establishment. All of these groups often don’t want to see the status quo change. There are people who work in businesses that invoice the government and they’re doing quite fine, thank you very much. There are executive agencies who like having power without having responsibility. And there are also the people who live in the beltway or if they live in London, they live within the M25 and they’ve been enjoying quite a nice life. They’ve been enjoying high asset prices, cheap goods from around the world, cheap labour and they’re comfortably off. They don’t want to see the status quo changed.

All of those people are part of the resistance to the change we need to see. And as Prime Minister, I simply underestimated the scale and depth of this resistance and the scale and depth to which it reached into the media and into the broader establishment. My plans for tax cuts and supply side reform were about making Britain more competitive. There were about making us a more successful country where we’re less reliant on government and I told you we were up to 47%. Those plans were backed by Conservative members across the country. But we faced coordinated resistance and we didn’t just face coordinated resistance from inside the Conservative Party or even inside the British corporate establishment. We faced it from the IMF and even from President Biden.

So my warning to you here today is: it’s not enough just to have the right ideas. It’s not enough even to have broad support for those ideas. We need to be able to take on those who resist change and who don’t want change and we need to be able to ensure that we’re winning the argument enough to be able to do that and we need to start preparing now. Because we’re now facing a wider problem, which is one of the reasons that I come here today to Washington and come to the Heritage Foundation.

The national stagnation problem I’ve been talking about in both the US and the UK is now becoming an international problem; because not content with high taxes in their own countries, we see governments seeking to agree high taxes around the free world. I’m talking about the OECD minimum tax agreement, which will stop companies lowering things like corporation tax and becoming more competitive. In my view it’s nothing short of a global cartel and complacency.

Because what will be the effect of these high taxes? Well, it will mean lower growth, it will mean higher spending and it will mean ultimately, that we are less competitive against our adversaries around the world and less economically strong. What we’re seeing is those on the left of politics working together to put policies in place across the free world that essentially tie the hands of governments and prevent them taking the actions to making their economies more free and their economies more successful. And I believe in the way that those people are working together, we who believe in low taxes, who believe in free enterprise, need to work together to combat those challenges.

So how do we do this? Because it’s a massive task and frankly things have been moving in the wrong direction for some time. First of all, we need to start at the core problem which is the challenge to our core Anglo-American values. We’ve allowed our opponents to fill the airwaves, we’ve allowed them to crowd our campuses and we’ve allowed them to use our institutions to undermine our values. We share a great heritage of freedom between our two countries. The US Constitution, Magna Carta, there are many founding documents that I can mention. But that freedom is being undermined. And of course we need to be self-critical. We should subject ourselves to self-examination. We believe in a free press. But what I think it’s come to is self-flagellation.  Self- flagellation of the values that made our countries great in the first place.

Identity Politics, which is basically the idea that what group you’re in is more important than the person you are. Critical Race Theory, which says it’s more important how you appear on the surface than what your talents and attributes are. Or the whole debate about what is a woman that completely subverts basic principles of science and biology. These are all core beliefs that we have seen being undermined and I’m afraid there hasn’t been sufficient fight back. Now, before I was Prime Minister I was Minister for Women and Equalities and one of the things I did is I stopped gender self ID in Britain without a medical certificate. But that is what had been happening in Britain. What we don’t see, we don’t see enough people prepared to take the orthodoxy on.

I find it ironic that there’s so much criticism within our own societies and yet so many people also are trying to migrate to our countries. I know that the United States has problems at the Mexican border. We have problems in the English Channel with small boats. And we’re in a situation where people in our own societies appear to be questioning the very value of what we are, whilst others are desperate to get into the country. And it’s an extraordinary contradiction.

So what can we do about all this? Because this isn’t just a problem about our own societies or our own countries. This is a problem for the future of the world that we need to deal with. We need to be as organised and we need to be as fearless as our opponents. And first of all, we need to be proud of our core values and we need to tell the story of freedom again. We need to make sure that people understand the benefits of living in a free society. They need to understand what individual liberty means. We need to challenge those who seek to cancel people and we need to be brave in speaking out and we need to challenge those who subvert the law of biology.

There’s only one thing we can do, which is speak out every time this happens. We need to be intolerant of intolerance.

And we need to tell the truth about what happened during the Cold War. I find it incredible that the younger generation now seem more favourably inclined towards communism and socialism. We need to tell the story of the crimes that took place in the USSR, the types of society that existed then and we need to tell the truth about how freedom delivered and how it was achieved.

The second thing we need to do is recapture the language. The left have weaponised people’s concerns about the economy and environment using terms like ‘fuel poverty’ and the ‘climate emergency’ to justify policies which are anti-growth and socialist. Maybe we should talk about rising taxes as ‘tax poverty’. And the fact that we have the highest taxes in 70 years as a ‘tax emergency’. And maybe rather than a ‘cost of living crisis’ what we’ve actually got is a ‘cost of government crisis’.

We need to reduce the size of government and make our economies match fit. We live in a big government era. And the problem with that, of course, is a lot of people have an interest in the government remaining big, so we can’t win the battle without changing those incentives. We should follow the example of US states like Florida and Texas that are changing things, whether it’s on occupational licensing, tax cuts, school choice. These are the types of policies we need to pursue and we also need to look at countries like Poland and the Czech Republic in Eastern Europe and their economic dynamism.

Fourthly, believers in freedom need to link up across the Atlantic and beyond. We need a network of liberty, not a cartel of complacency. We need a UK-US trade deal, not a UK-US tax deal. We need a Race to the Top, we shouldn’t be putting regulations on each other. I would love to see America rediscover free trade and reject protectionism or, as President Reagan called it, ‘destructionism’.

That doesn’t mean we should allow piracy, intellectual property theft or unfair state subsidies. I believe we should be much tougher on trade with China. Acting with friends in the G7, we put sanctions on Russia, so we can use trade restrictions on China to force change. I want to see the UK adopt the technology restrictions on China that the US and Netherlands have as a starting point.

In conclusion, I presented quite a gloomy picture over the past 30 minutes – and  I can see the audience agree – of what’s happening in our countries and the threats we face. But I don’t believe hope is lost. I don’t believe this for a minute. Because we’ve been here before. We know what it feels like. I was born in the 1970s, which was a dark decade for Britain, a dark decade of industrial crisis. But what we saw was the birth of new ideas. We saw an intellectual revival on the free right and then we saw the election of a Conservative Prime Minister, Mrs Thatcher, in 1979 who won hearts and minds and changed our country and together with President Reagan changed the future of the world.

Last autumn I had a major setback. But I care too much to give up on this agenda. I think it’s too important. And I know there are others who care too. I know there are people who care in the UK, I know there are people who care in the US and beyond.

And over the coming months I’ll be setting out ideas about how we together can take this battle forward.

We all need to think about what we can do. We need to get real about the threat from authoritarian regimes and their unwitting allies in the anti-growth movement in the West.

We need to get organised about taking these forces on and we need to fight this battle of ideas once again.

Mrs Thatcher would have expected nothing less.

Thank you.

Photocredit: Erin Granzow

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Launching 16th April 2024


In Ten Years to Save the West, Truss, who as Prime Minister sought to champion limited government and individual freedom, will argue that the rise of authoritarianism around the world and the adoption of fashionable ideas propagated by the global left give us barely a decade to preserve the economic and cultural freedom and institutions that the West holds so dear.