No more boom and bust, says Major: Fight-back speech to Scots Tories hails steady recovery, admits errors and pledges stand against crime

JOHN MAJOR pledged 'no more boom and no more bust' last night - after he had shouldered blame for the unemployment, bankruptcies and repossessions of the past two years.

In a speech billed as a 'fight-back' from the political bruising of the English and Welsh elections and two parliamentary U-turns, the Prime Minister told the Scottish Conservative Party conference in Edinburgh that they had been through 'tough times' before - and won through.

But the Government would continue with its policies on Europe, health, education and the railways. 'We have no intention of giving up,' he said defiantly. 'Give over, I would say.'

While it might sound tempting to opt for a quiet life, Mr Major said: 'We can't just stop the world and get off.' For that reason, he would pursue the priorities of building a stronger manufacturing base, and 'take our stand' on law and order.

He said that manufacturing matt ered, but the signs were good on output, investment, productivity, and sales. 'We've turned the corner.'

As for law and order, he said the 'artificial restrictions' of his own government's 1991 Criminal Justice Act had led to some absurd sentences. 'I am not having policy driven by the size of the prison population,' he said. 'I am having policy driven by the safety of the population at large.'

The heart of the speech was dedicated to the economy - and the admission of error. The Prime Minister said the Thatcher governments of the 1980s had delivered prosperity and home and share ownership. However, he added: 'We all became too confident. We took our eye off the ball. We allowed inflation to creep back. People who had worked hard, who had borrowed money to start businesses or buy houses were caught up in it.'

Tackling that inflation had meant high interest rates and higher unemployment. 'It led to bankruptcies and home repossessions. I would have given all I had to avoid it,' he said.

Mr Major said it had taken Norman Lamont's determination, skill and guts to beat inflation and bring the start of recovery. 'But people's patience - even British patience - is not unlimited. They have been hurt out there. And they are reacting.'

Although the recovery was under way, it had not yet made an impression on pay packets or job centres. But it would. Mr Major said that the recovery was soundly based; inflation was under control. 'And we are going to keep it that way. No more boom and no more bust. We are going for steady, non-inflationary growth. The British people have earned it. And this government are going to deliver it.'

But John Smith said earlier that the British people no longer believed a word the Government said. 'What is the result of their economic strategy?' he asked in a speech to the conference of the Fire Brigades Union in Bridlington. 'Two crippling recessions, 3 million people out of work - three times the number when they first came to power. A crumbling infrastructure. Dangerously high levels of borrowing. And a massive trade deficit.'

The Labour leader added: 'There has never been a weaker, more incompetent, more clueless administration in living memory. They simply lurch from one catastrophe to the next, leaving chaos and dismay in their wake. Public tolerance of the Government is ebbing with the speed if a rip-tide.'

The Conservative ministers who addressed the Edinburgh conference recognised the critical and delicate state of rank-and-file feelings with

repeated calls for unity and courage yesterday. Michael Heseltine, President of the Board of Trade, accepted the party had to get its 'show together'. John MacGregor, Secretary of State for Transport, urged: 'Let us keep our nerve.'

In his speech, Mr Major said: 'We are at a turning point after a time of great difficulty for our country.' The Government's problems were compounded by a small, 18-strong majority. 'So we cannot always grandly sail ahead, oblivious to all. We may have to tack a little here, manoeuvre a little there. That's politics. We can't ignore the parliamentary arithmetic. That would be plain stupid.'

He insisted there would be plenty of 'red meat' for the parliamentary programme ahead. They would not ignore recent election results, but neither would they over-react.

'We have been here before - you and I. And this time there are four years to the next election. Four years to take through our programme of modernising Britain and building up its strengths.'

Future cabinet, page 4

Smith warned, page 7