Below is the text of the press release, 557/89, issued by Conservative Central Office on Friday 17 March 1989 and summarising Mr Major’s speech to Central Council, made in Scarborough. The full text of the speech is also available.
John Major said that although the Chancellor had produced a prudent and cautious Budget, it continued the familiar themes of reform and wider share ownership.
National Insurance and Tax Reform
“The centrepiece of the Budget was the reform of National Insurance Contributions. These reforms will mean that most employees are better off by about £3 per week, and that is of proportionately greater value to those on lower incomes. Referring to the abolition of the Earnings Rule and the changes made to Age Allowances, John Major pointed out that the Budget “introduced a number of measures which will be of great help to those who are retired”.
On public finance, he said that “outside times of national emergency, I do not believe that Governments should continually spend more than they are prepared to raise honestly in taxation. It is unwise economically… and wrong socially”. He went on to say that because “Britain has the strongest fiscal position of any major nation in the world” it was able to repay a significant part of the national debt. “We are repaying debt in large sums. It means a saving of debt interest of around £3 billion a year. And those £3 billion we don’t pay in interest on debt will be available for roads or schools or hospitals or to cut taxes or to further reduce debt”.
Reaffirming the Government’s commitment to curb inflation, John Major said, “The British people do not like inflation and they will support measures to bring it down. There is no pain-free way to do it. But there is a way that will work. And that is to raise interest rates to bear down on inflation. They have worked before, and they will work again”. He said that the Labour opposition “deplore inflation, but attack the tight monetary policy that will cure it”.