Below is the text of Mr Major’s response on inflation made on 15th March 1990 in the House of Commons.
Mr. Steinberg To ask the Chancellor of the Exchequer when he expects to have zero inflation.
The Chancellor of the Exchequer (Mr. John Major) I shall set out my forecast for inflation next week.
Mr. Steinberg The fact is that the Government have no chance of getting inflation down to zero per cent., even though that was the stated aim of the previous Chancellor of the Exchequer. It will not fall significantly from the present rate of inflation. Many of my constituents are suffering great hardship because of the Chancellor’s and the Government’s policies. Many of them are facing hardship because of increases –
Hon. Members Too long.
Mr. Speaker Order. In fairness to the House, the hon. Gentleman should ask a single question.
Mr. Steinberg Inflation has been fuelled by high interest rates, high rents, high gas and water prices and the dreaded poll tax.
Mr. Speaker Order. I think that that is about enough.
Mr. Steinberg rose – [Interruption.]
Mr. Speaker Order. It is not at all fair to the hon. Gentleman’s colleagues for him to ask several questions.
Mr. Major I thought for a moment that the hon. Gentleman was trying to talk out Question Time. The reality is that without utilising our present interest rate policy there will be no chance of bringing down the rate of inflation to a level that is tolerable for most people. To that end we shall continue to sustain monetary policy. It is important that we do so for economic and social reasons. The hon. Gentleman mentioned the community charge. It is perfectly true that the dramatic burst of spending by local government will raise the retail prices index, but much of that comes from local authorities of which the hon. Gentleman approves.
Mr. Budgen Will my right hon. Friend accept my congratulations on the way in which, to date, he has borne down on inflation? Does he agree that it will be far more difficult in future to resist the demands of those, from every section of the community, who recommend and enjoy inflation, and who will look to him for a major relaxation of credit before the next general election?
Mr. Major I share with my hon. Friend the belief that it is vital to take whatever action is necessary to bring inflation down.
Mr. John Smith Is the Chancellor aware that all three local authorities in the Mid-Staffordshire constituency – two of which are Conservative – have set poll tax levels – [Interruption]. I have selected a constituency in which the Conservative party has a 14,000 majority. Surely that is perfectly fair. The three authorities have set levels significantly higher than the previous rate bills and far higher than the Government’s ludicrous guidelines. Do not those examples and others throughout the land show clearly that the Secretary of State for the Environment was perfectly correct when he said that the poll tax would have a devastating impact on the retail prices index? Does the Chancellor agree with his colleague?
Mr. Major The right hon. and learned Gentleman was uncharacteristically unreasonable in omitting from the beginning of his question the fact that the Labour county council covering that area has dramatically increased its expenditure. He also did not mention, for example, the quite astonishing and unreasonable community charge of more than £600 to be set by Labour-controlled Lambeth.
Sir William Clark Will my right hon. Friend remind the House what the rate of inflation was before 1979? Does he agree that if the Labour policy about which we know was implemented, we should have hyperinflation and a run on sterling?
Mr. Major There is no doubt that Labour’s policy would cause a run on sterling – and we have yet to find out precisely what Labour’s policy will be in individual aspects. The Labour Government’s inflation record speaks for itself. Their best month was still higher than our worst.