The Rt. Hon. Sir John Major KG CH

Category: Chief Secretary (1987-1989)

  • Mr Major’s Written Parliamentary Answer on Earnings (Unemployment) – 19 October 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Earnings (Unemployment) on 19th October 1988.

    Mr. Butler To ask the Chancellor of the Exchequer what is his estimate of the contribution to reducing unemployment of each 1 per cent, annual decrease in average earnings.

    Mr. Major A decrease in the level of pay settlements which brought them more closely into line with increases in productivity would have an important effect in reducing unemployment. This is now on a firm downward trend, and greater wage restraint would help to keep it there.

  • Mr Major’s Written Parliamentary Answer on Wealth Creation (Liverpool) – 15 October 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Wealth Creation (Liverpool) on 15th November 1988.

    Mr. Parry To ask the Chancellor of the Exchequer what percentage of the nation’s wealth was created in Liverpool in each of the past five years.

    Mr. Major [holding answer 14 November 1988]: I regret that the information is not available.

  • Mr Major’s Speech on the Economy – 10 September 1988

    Below is the text of Mr Major’s speech on the economy, made in Huntingdon on Saturday 10 September 1988.

    JOHN MAJOR:

    To read some recent commentators one could believe we are facing economic catastrophe. Far from it. The foundations of our economy are sound and strong and British firms are doing extremely well.

    Take manufacturing for example. Exports are up 8.5% over the last year, taking them to record levels. Total order books are strong and the CBI’s surveys indicate that firms are confident that they can do better still. As a result, there is an investment boom underway as British industry equips itself with the best and most up-to-date equipment.

    The astonishing transformation of the economy which has taken place since 1979 has spread new prosperity. Living standards are up at all levels of earnings. And unemployment has been falling steadily for over 2 years, month in, month out. And it is now coming down in every single region of the country – without exception.

    This healthy state of affairs is no accident. It has come about because we have set the right policy framework and stuck to it consistently for the best part of a decade. Nigel Lawson has pursued policies for the long-term, designed to liberate an economy that had fallen further and further behind our competitors during much of the 1970s. That is why he has pursued policies of deregulation and tax reduction. And above all he has pursued policies which have tamed inflation. This clear framework has given industry the stability it needs to plan for the future with confidence. We have earned that confidence by holding to our principles, not pursuing the short-term solutions that others urge upon us.

    So, what is the fuss about? The recent current account deficit figures are certainly unwelcome. No-one doubts that. But the increase in the deficit is not so much a problem in itself as a symptom of a different concern. Although much of the deficit is accounted for by the investment boom, there is no doubt that demand overall in the economy has been growing unsustainably fast. Faster than even our revitalised industry’s ability to expand output. As a result imports are drawn in, and the mismatch between imports and exports has led to a current account deficit.

    There is a fundamental difference between this state of affairs and the crises we were facing time after time again in the 1960s and 1970s. Then, the trade deficit reflected profligate government spending financed by massive borrowing. The contrast with today could not be greater. The public finances are in better shape than for a generation. We have turned the Government from being the largest borrower in the economy to the largest repayer of debt. The Budget is in surplus. And for the last two years we have not only cut borrowing, but we have simultaneously cut tax rates and increased public spending.

    The trade deficit we are now seeing is the result of private sector activity. This is because of strong growth in individual spending, and even stronger growth in industry’s reinvestment programme.

    I can understand that people may be puzzled when the Government asserts, with perfect truth, that the economy is doing excellently and yet interest rates rise and the balance of payment deficit widens. They ask, naturally, why is this happening? Why is demand growing so strongly? Why are companies and individuals spending more? Precisely because they are so confident about our future prospects. Industry is investing in order to produce higher output. Individuals are buying the goods which are the mark of a better quality of life and the tangible sign of a more prosperous Britain. Because they are confident they are tending to save less. They borrow, in the expectation of being able to put money aside in the future to pay back their debts. Or they spend out of savings. That confidence is welcome and justified. But the resulting borrowing must be sensible and responsible. And it must not lead to spending at a rate which the economy cannot sustain. That is a recipe for inflation.

    That is why the Government has responded. The Chancellor has taken timely and appropriate action by raising interest rates. Interest rates change the balance of attractiveness between saving and borrowing. And they are well directed at the housing market which has been a particular source of concern.

    This is the right response. It is consistent with our underlying philosophy. We are not going to introduce credit controls, as some are urging us to do. Credit controls would be unwise and unworkable. In today’s more open and international economic scene they could be avoided all too easily. We believe that people are able to make their own realistic judgements about the level of repayments they can afford.

    So there will be no panic response. No credit controls. And no Autumn Budget either. The March Budget was a crucial and far-reaching supply-side reform. In years to come it will be seen as an historic opportunity, which the Chancellor had the courage to seize. The country will reap the economic benefits of the Budget reforms well into the future.

    My message is simple. There was a need to nip inflationary pressures in the bud. That is why the Chancellor raised interest rates. It will inevitably take time to work through. But the economy remains in excellent shape and the policies which have brought this about will remain in place.

  • Mr Major’s Written Parliamentary Answer on Company Borrowing – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Company Borrowing on 29th July 1988.

    Mr. Chris Smith To ask the Chancellor of the Exchequer what is his estimate of the proportions of total borrowing by companies during the past six months, represented by (a) funds required to finance mergers and takeovers, (b) funds for investment in new plant, machinery, research and development and training and (c) funds for other purposes.

    Mr. Major This is a matter for my right hon. Friend the Chancellor of the Duchy of Lancaster.

  • Mr Major’s Written Parliamentary Answer on Medium-Term Financial Strategy – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Medium-Term Financial Strategy on 29th July 1988.

    Sir Ian Gilmour To ask the Chancellor of the Exchequer if he will make available the medium-term financial strategy assumptions for the medium-term growth of personal consumption, total fixed investments, the current balance of payments and unemployment which underlay each “Financial Statement and Budget Report” since 1980.

    Mr. Major I have nothing to add to the answer I gave to my right hon. Friend on 4 July, at column 480.

  • Mr Major’s Written Parliamentary Answer on Invisible Earnings (Arts) – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Invisible Earnings (Arts) on 29th July 1988.

    Mr. Bowis To ask the Chancellor of the Exchequer what have been the invisible earnings of the arts for each of the past 10 years.

    Mr. Major [holding answer 28 July 1988]: No comprehensive official estimates are available. A number of components in the invisibles account will be affected directly or indirectly by expenditure relating to cultural activities, especially travel and film and television services.

  • Mr Major’s Written Parliamentary Answer on Arts – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Arts on 29th July 1988.

    Mr. Tony Banks To ask the Chancellor of the Exchequer what is his current estimate of the contribution made by the arts to the balance of payments figures.

    Mr. Major No comprehensive official estimate is available. Overseas income and expenditure relating to cultural activities enter directly or indirectly into many components of the balance of payments, especially travel and film and television services.

  • Mr Major’s Written Parliamentary Answer on Land and Building (Sales) – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Land and Building (Sales) on 29th July 1988.

    Mr. Gordon Brown To ask the Chancellor of the Exchequer if he will publish in the Official Report, in the format of table 1 of Cm. 441, a table showing the (a) local authority, (b) central Government and (c) public corporation components of the sales of public sector land and buildings, consistent with the totals provided in his answer of 10 June, Official Report columns 705-9.

    Mr. Major The figures in table 1 of Cm. 441, though corresponding broadly to figures included in “The Government’s Expenditure Plans 1988-89 to 1990-91” (Cm. 283), the Supply Estimates for 1988–89 and earlier years, and Financial Statistics, are illustrative and were provided only in order to give a guide to orders of magnitude. They are not underpinned and have not been analysed by economic category. As indicated in paragraphs 22 and 45 of Cm. 441, detailed baselines on the new basis will be established for the 1989 public expenditure survey and figures for the outcome will be published in the 1990 public expenditure White Paper.

  • Mr Major’s Written Parliamentary Answer on the Manufacturing Industry – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on the Manufacturing Industry on 29th July 1988.

    Mr. Austin Mitchell To ask the Chancellor of the Exchequer what is his estimate of the elasticity of demand for imports and exports of manufactures relative to price; and whether he has any evidence that the elasticity in either case is different in the case of trade with the European Economic Community.

    Mr. Major Estimates of elasticities for exports and imports are published in the Her Majesty’s Treasury “Macroeconomic Model Documentation, October 1987”, a copy of which has been placed in the Library of the House. No estimates of these figures have been made for trade with the European Community.

    Mr. Austin Mitchell To ask the Chancellor of the Exchequer what estimates he has of the proportion of the investment in plant and machinery in manufacturing industry in each of the past five years which has been due to (a) the change in the real exchange rate since 1976 and (b) lack of capacity.

    Mr. Major No such estimates are available.

    Mr. Bowis To ask the Chancellor of the Exchequer what has been the growth of manufacturing productivity in the economy since 1980.

    Mr. Major In the three months to May 1988 output per head in manufacturing was 50 per cent, higher than its average level in 1980.

  • Mr Major’s Written Parliamentary Answer on Balance of Payments – 29 July 1988

    Below is the text of Mr Major’s written Parliamentary Answer on Balance of Payments on 29th July 1988.

    Mr. Win Griffiths To ask the Chancellor of the Exchequer what is his latest estimate of the outturn of the balance of payments position at the end of the current financial year.

    Ms. Quin To ask the Chancellor of the Exchequer what is his latest estimate of the deficit on current account for the year 1988.

    Mr. Battle To ask the Chancellor of the Exchequer what is his latest estimate of the current account deficit for the year 1988.

    Mr. Major As my right hon. Friend the Chancellor has already made clear, the current account deficit in 1988 will be larger than the £4 billion forecast at Budget time. A new forecast of the current account will be published, in the usual way, at the time of the Autumn Statement.