The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997

Chief Secretary (1987-1989)

Mr Major’s Comments on Labour’s Taxation Plans – 9 June 1989

The text of the press release, 11/89, issued by Conservative Central Office on Friday 9 June 1989. The statement was made by John Major at the Don Miguel Restaurant, 316 Kennington Road in London, during a press conference for the Vauxhall by-election. The press release was entitled “Labour’s High Tax Charter”.


John Smith recently called Britain’s economic miracle a mirage. Steady growth for eight years, outperforming our partners in Europe, rising real incomes, record levels of investment and faster falls in unemployment than the rest of Europe put together. These are solid facts John Smith can’t see.

The only mirage in British politics is the appearance of a reformed Labour party. They have tried to kid the public that the high tax, high spending, interventionist party of old, that all but crippled Britain 15 years ago, has changed. Don’t believe it. All that is reformed is the packaging.

Last week Nigel Lawson exposed their so-called supply side socialism as nothing more than the old nannying, meddling State interventionism which wrecked British industry over a decade ago.

As for public spending, the Review is packed full of Labour’s familiar and unrealistic pledges to every conceivable interest group. The promises they have made are clear. The cost of them is not. But they have owned up to some things:

The Upper Earnings Limit on national insurance contributions would be removed. That would add 9% to the marginal rate for 3 million people.

Labour would also levy NICs on savings income, hitting over a million savers, including half a million pensioners. It is curious that Labour demand more investment and yet propose to penalise investors. Clearly only public investment is worthwhile in their view.

Labour would erode and eventually abolish the Married Couples Allowance. That would mean we would be the only major country in the world with no recognition of marriage in the tax system.

The top rate of tax would go up sharply and John Smith has already admitted that basic rate taxpayers would also be made worse off by their plans.

The truth is that Labour’s so-called Policy Review is little more than a confidence trick. When every other country is trying to reduce its rates of tax, and abolish taxes where it can, Labour are committed to restoring taxes we have abolished, and jacking-up rates of tax.

Labour are the high tax party. We do not yet know how high. Nor do they. Nor can anyone until their spending plans are carefully costed. Without that information their much vaunted Policy Reviews are a mixture of confidence trick and wishful thinking.