The Rt. Hon. Sir John Major KG CH

Category: Chief Secretary (1987-1989)

  • Mr Major’s Parliamentary Answer on Inflation – 23 February 1989

    Below is the text of Mr Major’s response on Inflation, made on 23rd February 1989 in the House of Commons.

    Mr. Douglas To ask the Chancellor of the Exchequer what is the latest forecast for inflation for 1989–90.

    Ms. Walley To ask the Chancellor of the Exchequer what is the latest forecast for inflation for 1989–90.

    Mr. Major My right hon. Friend the Chancellor will be giving a forecast in his Budget statement next month.

    Mr. Douglas Does the Chief Secretary admit that one of the difficulties in anticipating the rise in inflation arises because the Chancellor has left himself only one weapon of economic management – interest rates – which is rather like asking Mr. Bruno to fight Mr. Tyson with one hand tied behind his back? As the Prime Minister was so appalled when the rate of inflation was 3 per cent., halving the value of money in a period of about 25 years, will the right hon. Gentleman give us some idea of what No. 10 is saying about that? When will the value of money be halved at the present rate?

    Mr. Major The hon. Gentleman may be under some misapprehensions, the first of which is about monetary policy, which has worked in the past and will work in the future. Neither is that the only aspect of my right hon. Friend’s policy; it is buttressed at the moment by a firm fiscal policy and a huge debt repayment, which was not the position when the hon. Gentleman’s party was in Government.

    Mr. Batiste Does my right hon. Friend agree that art increase in personal savings at the expense of personal expenditure would produce a downward pressure on inflation and the balance of payments deficit? If so, how best can such a welcome increase in personal savings be accomplished?

    Mr. Major I agree with my hon. Friend’s opening, remarks. My right hon. Friend’s high interest policy offers people a great incentive to save.

    Mr. James Lamond Is the Minister aware that the monetary policy is not working as satisfactorily as he thinks, according to the Manchester chamber of commerce and industry, which, in its latest bulletin, complains that high interest rates and a high pound are preventing firms from expanding at the rate that they would wish? Is he further aware that it feels that that policy may be all right for the overheated economy in the south-east of England, but is not acceptable in the north-west?

    Mr. Major The hon. Gentleman may have heard what my right hon. Friend said a few moments ago about the remarks of Mr. John Banham. In case he does not recollect them, I remind him that Mr. Banham said: We think the Chancellor should carry on with high interest rates to combat inflation. The hon. Gentleman neglected to say that the Manchester report was highly optimistic.

    Mr. Latham Since the Government’s interest rate policy is already having a dramatic effect in reducing overheating, and indeed output, in the private housing industry, is not the practical reality likely that market forces will soon force down building society borrowing rates?

    Mr. Major I am certainly not in the business of making that forecast, but my hon. Friend is entirely right that there are already clear signs of a slowdown in consumer spending, and one trusts that inflation will follow it down in due course.

    Dr. Marek Will the Chief Secretary accept that the Opposition are alarmed at the Paymaster General’s complacency about the dominance of hot money over direct and portfolio investment on the capital account and its clear threat of inflation? What measures is the Chief Secretary going to take with regard to this matter, or is he just going to keep to an interest rate war with the United States of America? If he does not take further measures, the country, as judge and jury, will find the Government and their economic policy guilty as charged.

    Mr. Major The hon. Gentleman’s remarks bear little or no relationship to the question. I find it very strange to hear lectures about inflation from the Labour party when every policy it recommends to us is inflationary in one aspect or another.

  • Mr Major’s Parliamentary Answer on Government Expenditure – 23 February 1989

    Below is the text of Mr Major’s response on Government Expenditure, made on 23rd February 1989 in the House of Commons.

    Mr. Arbuthnot To ask the Chancellor of the Exchequer if he will make a statement on the path of general Government expenditure over the period 1982–83 to the latest available date.

    Mr. Wells To ask the Chancellor of the Exchequer if he will make a statement on the path of general Government expenditure over the period 1982–83 to the latest available date.

    Mr. Major Excluding privatisation proceeds, the ratio of general Government expenditure to GDP has declined from nearly 47 per cent. in 1982–83 to just under 40 per cent. in 1988–89, the lowest it has been for over 20 years.

    Mr. Arbuthnot As the Government have increased public spending and at the same time reduced it as a proportion of gross domestic product, and reduced our rates of taxation as well the national debt, does my right hon. Friend share my hope that this Government will stay in power for a very long time?

    Mr. Major I share not only my hon. Friend’s hope but his expectation that that will be the case.

    Mr. Wells Why is it that ever since my right hon. Friend took office in the Government there has been an annual decline in Government spending as a proportion of GDP? Why did that not happen earlier and when will my right hon. Friend be able to reduce that ratio to the 33 per cent. which obtains in Japan?

    Mr. Major I am grateful to my hon. Friend for his kind remarks. I hope that what he suggests will become a convention. We hope and expect to achieve further reductions.

    Mr. Beith Will the Chief Secretary confirm that capital spending is declining consistently as a proportion of Government expenditure, and does he agree that that is bad news for any organisation? Will he recognise that one of the less inflationary things that the Chancellor could do in the Budget would be to invest more on the supply side of the economy on those things that will make our nation more capable of competing, rather than giving money away in tax cuts?

    Mr. Major The hon. Gentleman should be aware that capital expenditure in the public sector as a whole, and not the more selective measures sometimes quoted, increased by £2¾ billion in the Autumn Statement, and that is the largest cash or real terms increase that we have seen for many years.

    Mr. Neil Hamilton Does my right hon. Friend accept that sensible people look forward to further reductions in the proportion of the GDP taken by public spending, and that one of the best ways to achieve that is to carry on repaying Government debt? Can he confirm that £10 billion or £11 billion of the £17 billion a year that we pay in debt interest is on the borrowings carried out by the previous Labour Government?

    Mr. Major I can certainly confirm that. I can also confirm that if the Government were borrowing at the same ratio to GDP that we inherited from the previous Labour Government we could abolish income tax.

  • Mr Major’s Parliamentary Answer on Contingency Funds – 23 February 1989

    Below is the text of Mr Major’s response on Contingency Funds, made on 23rd February 1989 in the House of Commons.

    Mr. Robertson To ask the Chancellor of the Exchequer to what he expects to allocate resources from the contingency funds in 1989–90.

    The Chief Secretary to the Treasury (Mr. John Major) Allocations from the reserve will be made as the need arises.

    Mr. Robertson Has the Chief Secretary had a chance to read the Home Secretary’s speech last month when he promised that more resources would be devoted to better street lighting? As the Chancellor of the Exchequer’s home town has had brighter and more energy-efficient lighting installed, may we expect that the contingency reserve will be used to provide better lighting throughout the streets of Britain so that our citizens will have some relief from the constant fear of crime in our streets?

    Mr. Major I always read my right hon. Friend’s speeches with great interest. There were substantial increases in the Home Office budget in the last public expenditure round, taking effect from 1 April. I have no further announcements to make about expenditure on street lighting today.

    Mr. Kennedy Is the Minister aware that the Scottish Office has asked for reports from local authorities in the Highlands because of the severe hurricane and flood damage there in recent weeks, which could mean additional resources being required for relief work in the 1989–90 financial year? If such an application is made, will the Minister look upon it constructively and favourably?

    Mr. Major My right hon. and learned Friend the Secretary of State for Scotland is an avid guardian of the interests of the Scots. If and when my right hon. and learned Friend approaches me on that or any other matter, I shall of course consider it carefully.

    Mr. Bill Walker When my right hon. Friend is contemplating any raiding of the contingency reserve, will he bear in mind that the Europeans have £2,000 million of our money that we could well spend on some of the problems in Scotland, that are the direct result of the storms, as well as on some of our roads, which certainly need upgrading and improving? We would rather see European money used than our contingency reserve.

    Mr. Major I am sure that my right hon. and learned Friend the Secretary of State for Scotland will read what my hon. Friend has said. I certainly endorse it.

    Mr. Nicholas Brown As the Government have committed themselves to allocating resources next year towards providing tax relief for pensioners’ private medical insurance, can the Minister tell us what is the estimated cost of this concession? What provision have the Government made from the contingency funds or from elsewhere to provide a similar financial contribution towards the health care costs of the two thirds of British pensioners who do not pay income tax and are thus unlikely to benefit from the scheme? Will the Minister explain why the Government give priority to the wealthier pensioners rather than to all pensioners?

    Mr. Major The hon. Gentleman is less than wholly accurate. He confuses tax relief with expenditure. Even putting that aside, however, the hon. Gentleman has overlooked, first, the extra resources from the reserve next year to meet a great proportion of the pay review body awards for nurses and others, much of which will result in better nursing care for the elderly, and secondly, the significant package of extra help for poorer pensioners, which takes effect on 1 October and comes specifically out of the reserve.

  • Mr Major’s Written Parliamentary Answer on Self-Employment – 21 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Self-Employment on 21st February 1989.

    Mr. Barry Field To ask the Chancellor of the Exchequer what has been the total growth in self-employment since 1979.

    Mr. Major Between June 1979 and September 1988 the number of self-employed people in Great Britain rose by 60 per cent. to nearly 3 million.

  • Mr Major’s Written Parliamentary Answer on the Capital Account – 20 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on the Capital Account on 20th February 1989.

    Mr. Malcolm Bruce To ask the Chancellor of the Exchequer which of the statistics produced by his Department give an indication of the current state, and changes in the state, of the capital account of the economy.

    Mr. Simon Hughes To ask the Chancellor of the Exchequer if he will make a statement regarding his Department’s policy on the collection and publication of statistics showing the state of the capital account of the economy.

    Mr. Major The only statistics relevant to the capital account for which the Treasury is directly responsible are the official reserves. Other data on the capital account of the balance of payments are collected by the CSO and published regularly in “Economic Trends.”

  • Mr Major’s Written Parliamentary Answer on National Income – 17 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on National Income on 17th February 1989.

    Mr. Nigel Griffiths To ask the Chancellor of the Exchequer what is the growth in(a) non-oil national income and (b) national income including oil per head since 1979.

    Mr. Major The only measure which is compiled including and excluding oil is the output-based measure of the gross domestic product (GDP). Expressed in per capita terms, this grew 14.8 per cent. between 1979 and 1987. Excluding the contribution of the extraction of mineral oil and natural gas, the growth over the same period was 12.3 per cent.

  • Mr Major’s Written Parliamentary Answer on the GNP – 1 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on the Gross National Product on 1st February 1989.

    Mr. Redmond To ask the Chancellor of the Exchequer what percentage of the gross national product has gone to the Exchequer since 1979; where this came from; and if he will make a statement.

    Mr. Major Information on taxes and social security contributions as a percentage of gross national product is published each year in “The United Kingdom National Accounts” (table 15.7 in the 1988 edition). The publication is available in the Library of the House.

  • Mr Major’s Written Parliamentary Answer on Public Sector Debt – 16 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Public Sector Debt on 16th February 1989.

    Mr. Cousins To ask the Chancellor of the Exchequer what amount of public sector debt was (a) created and (b) repaid in each of the last five financial years, and if he will give an estimate for 1988–89.

    Mr. Major Figures for the creation and the repayment of all public sector debt instruments are not readily available. However, figures for official sales and redemptions of Government marketable securities are given in table 3.5 of “Financial Statistics” (published by the CSO).

  • Mr Major’s Written Parliamentary Answer on Information Gathering – 15 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Information Gathering on 15th February 1989.

    Mr. Blunkett To ask the Chancellor of the Exchequer if he plans to seek improvements in the information gathered by his Department on the economy.

    Mr. Major The Treasury is directly responsible only for statistics on official reserves, though it is also responsible jointly with CSO for the public sector debt repayment figures. It is always looking to improve its information gathering.

  • Mr Major’s Written Parliamentary Answer on Balance of Payments – 15 February 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Balance of Payments on 15th February 1989.

    Mr. Ashton To ask the Chancellor of the Exchequer what is his latest forecast for the balance of payments in 1989 and 1990.

    Mr. Major The Autumn Statement provided forecasts of the current account for 1988 and 1989 only. This year the current account deficit was forecast to be £11 billion. As usual a new forecast will be published on Budget day.