The Rt. Hon. Sir John Major KG CH

Category: Chief Secretary (1987-1989)

  • Mr Major’s Written Parliamentary Answer on Employment – 6 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Employment on 6th July 1989.

    Mr. Watts To ask the Chancellor of the Exchequer what has been the total increase in employment in the United Kingdom economy and in each of the other major European countries since 1983.

    Mr. Day To ask the Chancellor of the Exchequer what has been the total increase in employment in the United Kingdom economy and in each of the other major European countries since 1983.

    Mr. Norris To ask the Chancellor of the Exchequer what has been the total increase in employment in the United Kingdom economy and in each of the other major European countries since 1983.

    Mr. Major The information is as follows:

    Growth in Total Employment 1983–88

    Percentage growth | 000s
    United Kingdom 11.0 2,589
    Germany 3.2 820
    France -0.2 -50
    Italy 4.2 930
    Spain 5.5 620
    Netherlands 5.6 250
    Belgium 3.6 130

    Source: Department of Employment for United Kingdom (figures are for increase between June 1983 and June 1988). Other countries’ figures calculated from estimates of growth in employment given in June 1989 OECD Economic Outlook (estimates rounded to nearest 10,000).

    Mr. Riddick To ask the Chancellor of the Exchequer what has been the effect on public expenditure of the fall in the level of unemployment over the last two and half years; and if he will make a statement.

    Mr. Major As a result of the fall in unemployment between January 1987 and May 1989, public expenditure on benefits for the unemployed has been approximately £2.75 billion lower than it would otherwise have been over this period.

  • Mr Major’s Written Parliamentary Answer on Manufacturing – 6 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Manufacturing on 6th July 1989.

    Mr. Charles Wardle To ask the Chancellor of the Exchequer what was the annual rate of growth of manufacturing output over the last two years.

    Mr. Pawsey To ask the Chancellor of the Exchequer, what was the annual rate of growth of manufacturing output over the last two years.

    Mr. Major In the two years ending in the three months to April, manufacturing output grew at an average annual rate of 6.2 per cent.

    Sir David Price To ask the Chancellor of the Exchequer what is his latest estimate of the growth of manufacturing productivity in the United Kingdom since 1979 and in the previous two decades.

    Mr. Major Between 1979 and the three months to April 1989, output per head in United Kingdom manufacturing industry grew at an annual average growth rate of 4.2 per cent, significantly higher than the 1.6 per cent. growth achieved in the 1970s and 3 per cent. growth in the 1960s.

    Mr. Cryer To ask the Chancellor of the Exchequer if he will make a statement on the effect of the current level of interest rates on manufacturing firms employing less than 200 employees.

    Mr. Lilley Inflation is the greatest threat to the prosperity of all manufacturing firms. They will therefore benefit greatly from the Government’s determination to keep interest rates as high as necessary for as long as necessary as part of its firm anti-inflationary policy.

    Mrs. Peacock To ask the Chancellor of the Exchequer what are the latest projections for the growth of manufacturing investment in 1989.

    Mr. Moss To ask the Chancellor of the Exchequer what are the latest projections for the growth of manufacturing investment in 1989.

    Mr. Major The latest DTI investment intentions survey published in June projected manufacturing investment in constant prices to rise by 15 per cent. in 1989 on a year earlier. The latest CBI quarterly trends survey published in April confirms this buoyant outlook.

    Dr. Goodson-Wickes To ask the Chancellor of the Exchequer what was the annual rate of growth of manufacturing output over the last two years.

    Mr. John Browne To ask the Chancellor of the Exchequer what has been the growth of manufacturing productivity in the United Kingdom since 1980; and what were the comparable figures in the other major industrial countries.

    Mr. Robert B. Hughes To ask the Chancellor of the Exchequer what has been the growth of manufacturing productivity in the United Kingdom since 1980; and what were the comparable figures in the other major industrial countries.

    Dr. Twinn To ask the Chancellor of the Exchequer what has been the growth of manufacturing productivity in the United Kingdom since 1980; and what were the comparable figures in the other major industrial countries.

    Mr. Major Comparable figures for manufacturing productivity growth in the major industrialised countries are available only up to the fourth quarter of 1988. Manufacturing productivity, as measured by output per person employed, was 51 per cent. higher in the United Kingdom in 1988 than in 1980. Over the same period in the United States productivity increased by 37 per cent., in Japan by 28 per cent., in Germany by 19 per cent., in France by 27 per cent., in Italy by 35 per cent. and in Canada by 33 per cent.

    Mr. Hunter To ask the Chancellor of the Exchequer what is his latest estimate of the growth of manufacturing productivity since 1980.

    Mr. Stevens To ask the Chancellor of the Exchequer what is his latest estimate of the growth of manufacturing productivity since 1980.

    Mr. Major Output per head in United Kingdom manufacturing in the three months up to April 1989 was 55 per cent. higher than its average level in 1980, an average annual growth rate of 5.2 per cent.

  • Mr Major’s Written Parliamentary Answer on the Balance of Trade – 6 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on the Balance of Trade on 6th July 1989.

    Mr. Allan Roberts To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in visible goods in 1989 and 1990.

    Mr. Barron To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in visible goods in 1989 and 1990.

    Mr. Bidwell To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in visible goods in 1989 and 1990.

    Mr. Harry Barnes To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in visible goods in 1989 and 1990.

    Mr. Major The latest forecast of the visible trade balance in 1989 was published in the “Financial Statement and Budget Report” for 1989–90. An updated forecast for 1989, together with a forecast of the visible trade balance in 1990, will be published in the Autumn Statement in the usual way.

    Mr. Livingstone To ask the Chancellor of the Exchequer when he will next provide a forecast for the United Kingdom balance of payments in 1989 and 1990.

    Mr. Cunliffe To ask the Chancellor of the Exchequer when he will next provide a forecast for the United Kingdom balance of payments in 1989 and 1990.

    Mr. Redmond To ask the Chancellor of the Exchequer if he will revise his forecast for the United Kingdom balance of payments in 1989 and 1990.

    Mr. Frank Cook To ask the Chancellor of the Exchequer if he will revise his forecast for the United Kingdom’s balance of payments in 1989 and 1990.

    Mr. Graham To ask the Chancellor of the Exchequer when he will next provide a forecast for the United Kingdom balance of payments in 1989 and 1990.

    Mr. Illsley To ask the Chancellor of the Exchequer, when he will next provide a forecast for the United Kingdom balance of payments in 1989 and 1990.

    Ms Abbott To ask the Chancellor of the Exchequer if he will revise his forecast for the United Kingdom balance of payments in 1989 and 1990.

    Mr. Major A forecast of the balance of payments will be published as usual in the next Autumn Statement.

    Mr. Wareing To ask the Chancellor of the Exchequer what was the revised figure for the balance of payments in the first quarter of 1989.

    Mr. Adams To ask the Chancellor of the Exchequer what was the revised figure for the balance of payments in the first quarter of 1989.

    Ms. Armstrong To ask the Chancellor of the Exchequer what was the revised figure for the balance of payments in the first quarter of 1989.

    Mr. Major Latest estimates for the first quarter of 1989 show a current account deficit of £4.8 billion, an improvement of £0.8 billion over the preceding quarter.

    Mr. Rees To ask the Chancellor of the Exchequer if he will revise his forecast for the United Kingdom balance of payments in 1989 and 1990.

    Mr. Lawson A forecast of the balance of payments will be published as usual in the next Autumn Statement.

    Mr. Grocott To ask the Chancellor of the Exchequer what is his latest estimate for the United Kingdom’s balance of trade in manufactured goods for 1989.

    Mr. Ron Davies To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufacturing in 1989 and 1990.

    Dr. Reid To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufacturing in 1989 and 1990.

    Mr. Callaghan To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufacturing in 1989 and 1990.

    Mr. Tony Lloyd To ask the Chancellor of the Exchequer what is his latest forecast of the balance of trade in manufacturing in 1989 and 1990.

    Mr. Major The “Financial Statement and Budget Report” for 1989–90 provides a forecast of the balance of trade in manufactures for 1989 only. For this forecast, I refer the hon. Members to the reply I gave to the hon. Member for Leeds, Central (Mr. Fatchett) on 8 June at column 204.

  • Mr Major’s Written Parliamentary Answer on Self-Employment – 6 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Self-Employment on 6th July 1989.

    Mr. Hanley To ask the Chancellor of the Exchequer what has been the increase in self-employment since 1979.

    Mr. Arbuthnot To ask the Chancellor of the Exchequer what has been the increase in self-employment since 1979.

    Mr. Michael Brown To ask the Chancellor of the Exchequer what has been the increase in self-employment since 1979.

    Mr. Major Self-employment in the United Kingdom has increased by 1,142,000, or 60 per cent. since June 1979.

  • Mr Major’s Parliamentary Answer on Economic Advisers – 6 July 1989

    Below is the text of Mr Major’s response on Economic Advisers on 6th July 1989 in the House of Commons.

    Mr. Wall To ask the Chancellor of the Exchequer if he will list his economic advisers at the Treasury.

    Mr. Gareth Wardell To ask the Chancellor of the Exchequer if he will list his economic advisers at the Treasury.

    Mr. Major I shall arrange for a list of the numbers in each grade to he published in the Official Report.

    Mr. Wall Have the Chancellor’s economic advisers concluded whether Sir Alan Walters, the Prime Minister’s economic adviser, is correct in saying that the current high and rising rate of inflation is due to the Chancellor’s decision to peg the pound to the deutschmark?

    Mr. Major I understand why the hon. Gentleman is seeking to cause trouble, but I have no intention of accommodating him.

    Mr. Wardell Have the Chancellor’s advisers yet reached the conclusion that his over-reliance on the rate of interest as an instrument of economic policy is the key to understanding his current mismanagement of the British economy?

    Mr. Major The Chancellor’s advice from his advisers is for him. The decisions that are taken are for the Chancellor. I have no intention of referring to the advice that is received.

    Mr. Robert Banks Will the Minister accept advice from me, that the current interest rates are biting quite well enough and that the Government’s policy must be given time before we take any other action that may or may not be necessary? It is essential that the economy is given proper time in which to respond to current levels.

    Mr. Major As I said earlier, my right hon. Friend will certainly use monetary policy to bear down on inflation. I give my hon. Friend that categorical assurance.

    Mr. Batiste Does my right hon. Friend agree that a sensible person should take advice from as many sources as possible, and that he will be judged not by the noises that come from his advisers but by the quality of the judgments that he makes based upon that advice?

    Mr. Major My hon Friend makes an extremely good point. It is not that long ago that we had some advice from 364 distinguished economists who were entirely wrong. I can certainly offer my hon. Friend the assurance that none of them work for the Treasury.

    Mr. John Smith Is it not clear that the Chancellor is in need of some good advice, in particular not to make foolish interventions in rail disputes and not to threaten even further cuts in investment in our railway system, which is already inadequate because of years of under-investment by the Government?

    Mr. Major Even by the standards of the Opposition Front Bench, that is a remarkably misguided statement. The growth in investment in British Rail has been 75 per cent., and we now have the largest investment programme in British Rail since the advent of steam. That is a reality that the right hon. and learned Gentleman and his hon. Friends might do well to understand.

    The following is the information:

    1 Chief Economic Adviser at Grade 1A
    1 Deputy Chief Economic Adviser at Grade 2
    4 Grade 3 (Under Secretary) Economists
    12 Grade 5 (Senior Economic Advisers)
    31 Grade 7 (Economic Advisers)
    27 Economic/Senior Economic Assistants

  • Mr Major’s Parliamentary Answer on Interest Rates – 6 July 1989

    Below is the text of Mr Major’s response on Interest Rates on 6th July 1989 in the House of Commons.

    Ms. Quin To ask the Chancellor of the Exchequer what representations he has received from small businesses on the current level of interest rates.

    Mr. Major My right hon. Friend has received a number of representations on this subject.

    Ms. Quin Have the Government studied the recent survey by the Forum of Private Business, which shows that small firms are rapidly becoming the victims of high interest rate policies? Are the Government aware of the CBI’s industrial survey showing the weakness of small firms’ export orders? What advice are the Government now giving to small firms?

    Mr. Major I have seen those reports. There is no doubt that interest rates are uncomfortable. But inflation would be more uncomfortable, would last longer and would be far more damaging. Monetary policy is specifically geared to bear down on inflation and so bring it down. That is in the interests of all business, particularly small business.

    Mr. Gow Is it not the case that excessive monetary growth caused, and diminished monetary growth will cure, the monetary evil of inflation? Will my right hon. Friend confirm that he will maintain interest rates at such a level as to persevere in the abatement of inflation until we achieve his declared target of stable prices?

    Mr. Major I can certainly assure my hon. Friend that we have no intention of relaxing on monetary policy until it begins to bear fruit.

    Mr. Haynes When the Prime Minister comes in to the Chamber in a moment or two, will Treasury Ministers have a word with her and tell her to get rid of the Chancellor and farm him off back to the beautiful green fields of Blaby, because he has been a complete failure? He promised that the Government would help small businesses because that was where the jobs would come from and said that that would sort out the problems of the economy.

    Mr. Major I disagree with what I could hear of what the hon. Gentleman said. We cherish the Chancellor and hope to keep him for a long time.

    Mr. Bellingham Is the Chief Secretary aware that in west Norfolk unemployment has come down from a peak of 18 per cent. to less than 6 per cent.? The main reason for that is the success of the small firms sector, which has prospered under the Chancellor’s policies. However, is my right hon. Friend aware that that sector is worried about the increase in inflation and supports policies that will bring inflation down?

    Mr. Major I entirely agree. Unemployment has fallen in each and every region of the United Kingdom – without exception – and that has been happening for a considerable period of time. That is a direct result of the policies that my right hon. Friend has been following.

    Mr. Chris Smith Is the Chief Secretary aware that bankruptcies among self-employed sole traders in London and the south-east have risen by 28 per cent. in the past year, as a direct result of the Government’s high interest rate policy? Does he show no concern for the small businesses throughout the country that are being forced to abandon re-equipping and investment decisions and, in many cases, being forced to lay off staff? Has he heard the verdict of the small business man in Gosport, who said that high interest rates were squeezing his business to choking point? Why does he not change his policy before it is too late?

    Mr. Major The hon. Gentleman can rattle his chains all he likes, but the creation of new businesses is now running at an unprecedented rate of 1,300 new businesses every week. The hon. Gentleman can never tell us when that happened under any Labour Government.

    Mr. Oppenheim Does my right hon. Friend agree that the effect of high interest rates on business is substantially mitigated because long-term rates are several points below the level of short-term rates? In addition, does he agree that the long-term interests of all business, the economy and the people of Britain are best served by having high interest rates now, rather than allowing problems to build up for the future, as other Governments would have allowed?

    Mr. Major That is right. It is also pertinent that the profitability of small businesses is at the highest level for 20 years. That means that firms are much less reliant on borrowing and therefore much less sensitive to short-term interest rate changes.

  • Mr Major’s Parliamentary Answer on Economic Policy – 6 July 1989

    Below is the text of Mr Major’s response on Economic Policy on 6th July 1989 in the House of Commons.

    Mr. Martyn Jones To ask the Chancellor of the Exchequer what representations he has received from institutions in the City of London about United Kingdom economic policy.

    Mr. Win Griffiths To ask the Chancellor of the Exchequer what representations he has received from institutions in the City of London about United Kingdom economic policy.

    The Chief Secretary to the Treasury (Mr. John Major) My right hon. Friend often receives advice from the City, most of it unsolicited.

    Mr. Jones From that reply I take it that the Chancellor may not have seen the Chase Investment bank report which stated that inflation was likely to peak at over 9 per cent. this year and that 18 per cent. interest rates would be needed to bring inflation down to 4 or 5 per cent. by 1992. Bearing in mind that the report was based on the Chancellor’s Treasury model, will the Chancellor confirm that his young friends in the City are correct and that he would be prepared to put interest rates up to 18 per cent. by 1992?

    Mr. Major If my right hon. Friend had seen that report – I am not sure whether he has – he would certainly not hale agreed with it.

    Mr. Griffiths Has the Minister received any representations from the City about how to deal with the problem of directors’ huge pay increases? He may have seen the report that five of the top 100 company directors had increases of 50 per cent. and 91 had on average a 28 per cent. increase in their pay? Bearing in mind the Chancellor’s views on pay and inflation, has he proffered them any advice on how to bring those increases down to a reasonable level, or does he believe in allowing wages to go up and keeping interest rates high?

    Mr. Major I do not support unjustified pay increases from any source, including directors – and neither does my right hon. Friend. While I have no intention of defending them, they are not under our control.

    Mr. John Townend Does my right hon. Friend agree with the remarks made yesterday by the Governor of the Bank of England, when he commented that aggressive advertising by the banks to persuade people to borrow more so that they can spend more makes him feel uncomfortable?

    While credit controls are neither desirable nor practicable, does my right hon. Friend agree that the clearing banks and big City institutions should act responsibly? Would it be a good idea for the governor to invite the chairmen of the clearing banks to the delightful garden behind his office and – over a long, cool summer drink – tell them that it is in their long-term interests to act in the long-term interests of the country?

    Mr. Major I share the governor’s instincts, but what action he takes is a matter for him. I certainly do not believe that credit controls would be the answer.

    Mr. Charles Wardle Is it not imperative for the City and for industry alike that my right hon. Friend’s chief and abiding priority continues to be controlling inflation – even though, in the short term, that remedy may be painful to borrowers – because inflation threatens competitiveness, erodes savings, and threatens jobs?

    Mr. Major My hon. Friend is entirely right. That is the central proposition before the Government at present, and my right hon. Friend has put in place the policies to bring down inflation.

    Mr. Beith Is it not widely recognised in the City that London would be the obvious centre for a central European bank, and that Britain should be in the European monetary union of which that central bank would be a part? From a counter-inflationary point of view, would it not be better if that central bank had more of the independence enjoyed by the Bundesbank, rather than the relationship that the Bank of England has with the Government?

    Mr. Major These are matters that will have to be addressed in the future, but I am bound to say that others may hold views that differ from the premise of the hon. Gentleman’s question.

    Mr. Latham Before my right hon. Friend throws the unsolicited junk mail that he receives from the City into the wastepaper basket, will he ask some of the teenage scribblers to send him a table showing their predictions of economic outcome in the last five years compared with the actual outturns?

    Mr. Major I shall be very happy to study those projections and the eventual outcome. It is undoubtedly true that over a run of years, Treasury forecasts have been the most accurate.

    Mr. Gordon Brown As the Chancellor spent yesterday attacking the railmen, will the Chief Secretary take the opportunity that I am giving him today to condemn the pay increases which have given Sir Jeffrey Sterling a rise of £1 60,000 in one year alone, Lord King of British Airways £100,000 in one year alone, and the head of Warburg £350,000 – on top of the top-rate tax cuts awarded to them last year? Will the Chief Secretary explicitly condemn such pay rises – yes or no?

    Mr. Major Yesterday, my right hon. Friend condemned the strike, not individual railmen. If the hon. Gentleman had listened, he would have heard what I said earlier about unjustifiable pay demands. They are unjustifiable whether they are made by directors or by workers.

  • Mr Major’s Written Parliamentary Answer on Non-Domestic Rates – 4 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Non-Domestic Rates on 4th July 1989.

    Dr. Cunningham To ask the Chancellor of the Exchequer when he will announce his decision on possible abatement of the increase in national non-domestic rates by powers given under sub-paragraph 5(3) of schedule 7 to the Local Government Finance Act 1988; what criteria he will take into account when taking that decision; and if he will make a statement.

    Mr. Major [holding answer 21 June 1989]: The initial NNDR multipliers will be specified in the revenue support grant reports for 1990–91. For succeeding years, the presumption is that the NNDR multiplier will be increased in line with the indexation provisions in the Local Government Finance Act 1988. However, if I did decide to increase the multipliers by less than the RPI, this would be announced before the revenue support grant reports for the year in question had to be approved by Parliament. All relevant considerations would be taken into account: for example, if improved efficiency led to a significant reduction in the amount local authorities needed to spend, some of the efficiency gains should be reflected in the burden which falls on the business community through non-domestic rates.

  • Mr Major’s Written Parliamentary Answer on Investment – 4 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Investment on 4th July 1989.

    Mr. Butterfill To ask the Chancellor of the Exchequer if he will list the total investment growth figures for each of the last 10 years; and if he will make a statement.

    Mr. Major The figures for total investment growth in the United Kingdom at 1985 prices, over the last 10 years, are shown in the table.

    United Kingdom total Gross Domestic Fixed Capital Formation (1985 prices) per cent. change on a year earlier
    Per cent. | change

    1978 3.01
    1979 2.80
    1980 -5.37
    1981 -9.58
    1982 5.42
    1983 5.03
    1984 8.60
    1985 3.80
    1986 1.66
    1987 7.98
    1988 12.25

    Source: CSO.

    Between 1980 and 1988 the United Kingdom had the fastest growth of total investment of all the EC countries.

    Mr. Patnick To ask the Chancellor of the Exchequer what proportion of investment in United Kingdom industry over the past 10 years can be accounted for by internally generated funds.

    Mr. Major Companies’ undistributed income is used to finance a variety of expenditure, including investment, but it is not possible to say to what extent investment has been financed by internally or externally generated funds.

  • Mr Major’s Written Parliamentary Answer on Economic Growth – 4 July 1989

    Below is the text of Mr Major’s written Parliamentary Answer on Economic Growth on 4th July 1989.

    Mr. Thurnham To ask the Chancellor of the Exchequer what is his latest estimate for economic growth in 1989–90.

    Mr. Major My right hon. Friend the Chancellor forecast at Budget time that real gross domestic product would grow by 2.25 per cent. in 1989–90.