The Rt. Hon. Sir John Major KG CH

Prime Minister of Great Britain and Northern Ireland 1990-1997

1991Prime Minister (1990-1997)

PMQT – 18 July 1991

Below is the text of Prime Minister’s Question Time from 18th July 1991. John MacGregor responded on behalf of John Major.




Q1. Mr. Hinchliffe : To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor) : I have been asked to reply My right hon. Friend the Prime Minister is conducting bilateral discussions with President Gorbachev.

Mr. Hinchliffe : In view of the embarrassing revelations that the Secretary of State for Employment knew in June 1990 of possible embezzlement and fraud at BCCI and that the Department of Trade and Industry stated that it has not received the letters which the right hon. and learned Gentleman says he sent to it on the matter, will the Leader of the House, as a matter of urgency, set up a full and independent inquiry into the whole sorry affair?

Mr. MacGregor : My right hon. and learned Friend the Secretary of State for Employment received a letter from the BCCI staff which primarily expressed concern about redundancy arrangements at the bank. He received also a copy of a covering letter which the association sent to the right hon. Member for Chesterfield (Mr. Benn). My right hon. and learned Friend wrote to the right hon. Member for Chesterfield on these matters and, as far as I know, the right hon. Gentleman did not come back to him on them.

As for the second part of the hon. Gentleman’s supplementary question, I understand that the matter is being looked into at this very moment.

Sir Fergus Montgomery : To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

Mr. MacGregor : I have been asked to reply.

I refer my hon. Friend to the reply that I gave some moments ago.

Sir Fergus Mongomery : Does my right hon. Friend agree that if a member of the Cabinet was accused publicly by his colleagues of being unwise, unprincipled and responsible for confusion, he should do the decent thing and resign? If he agrees with that principle, and if he has noticed an item on the front page of The Guardian, should not the shadow Foreign Secretary resign?

Mr. MacGregor : I say to my hon. Friend– [Interruption.]

Mr. Speaker : Order. I think that the supplementary question was in order.

Mr. MacGregor : I cannot imagine any of my colleagues saying such a thing about any member of the Cabinet. If my hon. Friend is referring to the comments in the press this morning of the hon. Member for Kingston upon Hull, East (Mr. Prescott) about the right hon. Member for Manchester, Gorton (Mr. Kaufman), I was interested that he said,

“Everybody knows”–

this is the statement on defence–

“it’s a policy change, but no one is admitting it.”

If the right hon. Gentleman says, “We will not get rid of nuclear weapons under any circumstances”, that really is a change. This demonstrates that the Labour party– [Interruption.]

Mr. Speaker : Order. The Lord President should relate his reply to Government policy.

Mr. MacGregor : Government policy is very clear on the nuclear question, but the Opposition cannot, even now, give a simple answer to a simple question about their defence policy.

Mr. Hattersley : I look forward to receiving a simple answer to a simple question. Does the Leader of the House share the view expressed by the director general of the Confederation of British Industry on the “Today” programme this morning that Britain is no longer suffering from a depression but from a slump?

Mr. MacGregor : I share the view– [Laughter.]

Mr. Speaker : Order. This takes up a lot of time.

Mr. MacGregor : I will give the right hon. Gentleman a simple answer to his question. The CBI’s director general said on the “Today” programme this morning :

“The manufacturing side of our economy is in much better international shape than it’s been for many years.”

That is a much simpler answer than the right hon. Gentleman and other Opposition Members have given on the nuclear issue for many months.

Mr. Hattersley : It may have been a simple answer to someone’s question, but not mine. Can the Leader of the House attempt to justify his evasive answer having seen, as I suspect he has, the European Community’s judgment on the British economy? It is that British investment will fall next year, while German investment will increase by 6 per cent. ; and that unemployment in Great Britain will rise to more than 3 million next year, accounting for more than half the total increase throughout the whole Community. If that is not a slump, how would the right hon. Gentleman define one?

Mr. MacGregor : We made it clear in the Budget forecast that recovery would begin in the second half and that view is shared by the CBI and the Organisation for Economic Co-operation and Development. As to the European Commission’s predictions on unemployment, I point out that it does not have a good record of making accurate forecasts. It indicated that unemployment in Germany would rise and it has not; and that employment in France would grow and it did not ; and it asserted that training skill levels for school leavers were lower in West Germany than in Greece–and I do not think that anyone else believes that. I suspect that the Commission’s unemployment forecast will turn out to be as accurate as that of the right hon. Gentleman in the 1983 general election, when he forecast that unemployment in this country would rise to 4 million–and it never did.

Mr. Hattersley : The Leader of the House does not seem to have a good record when it comes to remembering the Prime Minister’s forecasts. In the House last week, the Prime Minister revised his forecast for recovery from the second half of this year to round about Christmas. Is not the truth that now that the glitz and glamour of the G7 summit is over, we are back in the real world of Britain’s economic situation–and that real world is a catastrophe, caused by the Conservatives’ policy of the past 10 years?

Mr. MacGregor : The most important things for long-term prosperity and for jobs are to get inflation down, as we are doing and which Labour singularly failed to do, and to keep public expenditure under control and at reasonable levels, which Labour also singularly failed to do. The right hon. Gentleman may remember that at the last general election, he committed Labour to increasing public expenditure by some £34 billion. Labour is at it again and that would be a real recipe for disaster for growth in the early part of the 1990s.


Q3. Mr. Bevan : To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

Mr. MacGregor : I have been asked to reply.

I refer my hon. Friend to the reply that I gave a few moments ago.

Mr. Bevan : While we welcome the impending nuclear disarmament that will emanate from the G7 summit, does my right hon. Friend agree that Britain’s independent nuclear deterrent would be put at risk, and could lose all credibility, if we cancelled the fourth Trident submarine–as Labour proposes to do?

Mr. MacGregor : I share my hon. Friend’s strong welcome for the agreement on the START negotiations that was reached yesterday and I am sure that the House shares that welcome. However, my hon. Friend was right to draw attention to the sham of Labour’s defence policy. Not only is it totally confusing, but although they will keep nuclear weapons for negotiations, on the other hand they totally undermine the credibility of our deterrent. Four Trident submarines are essential to ensure that one is on station all the time.

Mr. Madden : Why are the Government trying to gloss over the background to the closure of the Bank of Credit and Commerce International? Why are they refusing to hold an inquiry into the Bank of England’s role? What advice did the Treasury give to local authorities around the country? Most of all, what did the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) do with the correspondence alleging corruption and negligence inside the bank which he apparently received from the present Secretary of State for Employment?

Mr. MacGregor : There is absolutely no glossing over. Obviously, we are all concerned about what has happened to a number of small depositors and borrowers at BCCI. The important thing now is for the Bank and the liquidator to get on with the practical arrangements and to move as fast as possible. My right hon. Friend the Chancellor of the Exchequer has already said that he will be reviewing what happened and will see what lessons can be learnt from it. The hon. Member for Bradford, West (Mr. Madden) will be aware that the Treasury and Civil Service Select Committee is meeting next week and that the Governor of the Bank of England will give evidence to it. Obviously many questions can be asked about what has happened over that period. I can assure the hon. Gentleman that there is no question of trying to cover up and no question of a sham.


Q4. Mr. David Nicholson : To ask the Prime Minister if he will list his engagements for Thursday 18 July 1991.

Mr. MacGregor : I have been asked to reply.

I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Nicholson : Does my right hon. Friend agree that if the European regional funds, from which businesses in my constituency are unlikely to benefit significantly, were massively increased, the result would be a heavy cost to the British taxpayer? Does he also agree that it would be the height of irresponsibility to recommend such a policy without working out or stating honestly its cost? Is not that what we have come to expect from the shadow Foreign Secretary and the Labour party?

Mr. MacGregor : My hon. Friend is referring to some of the practical issues that arise out of moving very quickly to convergence and why it is right to take the view that the Government take in relation to economic and monetary union and moving to a single currency. If one moved to convergence very quickly and that required a very big increase in regional funds very early, it would mean taking more money from taxpayers in Scotland to give to Sicily.


Q5. Mr. Salmond : To ask the Prime Minister if he will list his engagements for Thursday 18 July 1991.

Mr. MacGregor : I have been asked to reply.

I refer the hon. Gentleman to the reply that I gave a few moments ago.

Mr. Salmond : What information, if any, was supplied by the Bank of England to Treasury Ministers, including the present Prime Minister, on the contents of the October 1990 Price Waterhouse report indicating serious fraud in BCCI? Does the Leader of the House accept that if it can be established that Ministers or the regulatory authorities had knowledge well before June this year of serious fraud in that bank, the Government cannot continue to wash their hands of the financial disaster facing depositors and local authorities?

Mr. MacGregor : The hon. Gentleman is probably referring to the Price Waterhouse report of March 1990. He said October, but I understand that it was in March. We are probably talking about the same report. The Bank had given the Treasury explicit assurances that although previous audit reports showed evidence of poor banking standards and losses–this applies to all these reports–they provided no evidence on which it could act in respect of the widespread fraud that was subsequently uncovered in the section 41 report. The evidence of bad banking standards and losses was being tackled by injections of capital from shareholders and by substantial management changes. It was the change in management that ultimately led to the discovery of extensive fraud, which led to the section 41 investigation. That was the first time that the Bank had evidence of serious and widespread fraud on which to take action.

Mr. Knapman : Does my right hon. Friend recall the question from my hon. Friend the Member for Romford (Sir M. Neubert) on Tuesday and the slur and slander by the general secretary of the Labour party on the President of the United States and particularly on the President’s manner of election? Has my right hon. Friend received any indication from the Leader of the Opposition that he wishes to dissociate himself– [Interruption.]

Mr. Speaker : Order. This matter is not the Government’s responsibility. [Interruption.] This is taking time. Let us move on.


Q6. Mr. Douglas : To ask the Prime Minister if he will list his official engagements for Thursday 18 July.

Mr. MacGregor : I have been asked to reply.

I refer the hon. Gentleman to the reply that I gave a few moments ago.

Mr. Douglas : While not being too thirled to statistics, although they are important, will the right hon. Gentleman acknowledge that the rate of unemployment in the United Kingdom and Scotland is dramatically high and is producing great suffering? Will the Government and the right hon. Gentleman in particular stop behaving like a cross between a pit bull terrier and a Scot–a Scots terrier– [Interruption.] –the type of dog which would ravage us first and then scurry away to get the ambulance. When the ambulance man comes along, he pours on the iodine and says, “If it isn’t hurting, it isn’t working.” It is hurting, but it ain’t working because it is producing great suffering on the part of the people of Scotland and many unfulfilled opportunities.

Mr. MacGregor : Obviously we regret any increase in unemployment, because it affects families very substantially, but it is important to keep the matter in context. If one looks at the other side of the coin, one will see that there are 1 million more jobs than there were in 1979. We have more jobs in this country than most other countries as a proportion of the working population.

We are taking extensive measures to deal with unemployment, particularly the longer-term unemployed. It is significant that about half of all the unemployed find jobs within three months. It is also quite reasonable to point out that a wide variety of the measures that the main Opposition party is putting forward would increase unemployment, destroy part-time jobs, impose extra burdens on industry and therefore make the position much worse.