Tag: 1988

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

Mr. Barron To ask the Chancellor of the Exchequer (1) if he will provide the Treasury model estimate of the full year impact of the cuts in the higher rates of income tax announced in the Budget; and if he will provide a similar estimate of the impact of an additional annual £2 billion of current public expenditure; (2) if he will estimate the full year impact on the current account of the balance of payments of the cuts in the basic and higher rates of income tax announced in the Budget.

Mr. Major It has not been the practice to publish estimates of the economic effects of changes in tax rates or public expenditure.

Below is the text of Mr Major’s written Parliamentary Answer on National Accounts Adjustments on 28th March 1988.

Mr. Gordon Brown To ask the Chancellor of the Exchequer if he will break down for “other adjustments” given in table 1:2 of the Financial Statement and Budget Report 1988–89 to show (a) capital consumption, (b) privatisation proceeds not treated as negative general Government expenditure, (c) grants and loans to some public corporations and PTEs, (d) valued added tax refunded, (e) pension increase payments, (f) employers’ statutory sick pay scheme and (g) other.

Mr. Major The outturn figures for national accounts adjustments are given in detail in the public expenditure White Paper each year, see for example Cm 288–1, table 6.4. Annual data for earlier years and quarterly data for the current year are given in “Financial Statistics” table 2.4. Figures for the later years are overall estimates and the individual components would be subject to considerable margins of error.

Below is the text of Mr Major’s written Parliamentary Answer on the Financial Statement and Budget Report on 28th March 1988.

Mr. Gordon Brown To ask the Chancellor of the Exchequer if he will give for each year since 1978 the figure for “other national accounts adjustments” as defined in table 1.2 of the Financial Statement and Budget Report for 1987–88 in cash and real terms and the planned figures for 1988–89 and 1990–91.

Mr. Major The figures requested are as follows:

Other national accounts adjustments

Year | Cash | Real Terms (1) – in £ billion
1978–79 | 1.7 | 3.2
1979–80 | 2.8 | 4.6
1980–81 | 4.4 | 6.2
1981–82 | 3.2 | 4.1
1982–83 | 5.1 | 6.1
1983–84 | 5.3 | 6.1
1984–85 | 4.4 | 4.8
1985–86 | 6.9 | 7.1
1986–87 | 8.2 | 8.2
1987–88 | 8.3 | 7.9
1988–89 | 8.6 | 7.9
1989–90 (2) | 9.0 | 8.0
1990–91 (2) | 9.0 | 7.0
(1) Cash outturns or plans adjusted to 1986–87 price levels by excluding the effect of general inflation as measured by the GDP deflator.
(2) Rounded to the nearest £1 billion.

Below is the text of Mr Major’s written Parliamentary Answer on Public Corporations (Borrowing) on 28th March 1988.

Mr. Gordon Brown To ask the Chancellor of the Exchequer if he will break down the figure of £1.2 billion for public corporations’ market and overseas borrowing given in the 1988 Financial Statement and Budget Report into its component parts in order to account for the difference between this figure and the figure of £0.8 billion given in table 6.4 of Cmd. 288-I.

Mr. Major There are coverage and measurement differences between the figures for public corporations’ market and overseas borrowing in Cm. 288 and the Financial Statement and Budget Report. The figure of -£1.2 billion shown in the 1988 Financial Statement and Budget Report relates to the market and overseas borrowing of all public corporations as measured for the public sector borrowing requirement. It is not possible to break this down into estimates for individual industries. The figure of -£0.8 billion shown in table 6.4 of Cm. 288-I relates to the figures included in the planning total and does not therefore include the market and overseas borrowing of all public corporations as explained in chapter 4 of Cm. 288-I. The major reason for the change between Cm. 288-I and the FSBR arises from nationalised industries switching their net borrowing from the market to Government. In part this reflects the early repayment of expensive public sector foreign currency debt given the high level of the official reserves and the removal of any interest rate benefit on new overseas borrowing under the official exchange cover scheme.

Below is the text of Mr Major’s written Parliamentary Answer on Debt Interest on 28th March 1988.

Mr. Gordon Brown To ask the Chancellor of the Exchequer if he will give for each year since 1978 the general Government gross debt interest in cash and real terms and for the years 1988–89 to 1990–91, the planning figures for general Government debt interest in cash and real terms.

Mr. Major Following is the information.

General Government gross debt interest payments (in £ billion)
Cash | Real terms (1)

1978–79 | 7.4 14.4
1979–80 | 9.4 15.8
1980–81 | 11.4 16.0
1981–82 | 13.3 17.1
1982–83 | 13.9 16.6
1983–84 | 14.5 16.6
1984–85 | 16.1 17.6
1985–86 | 17.7 18.2
1986–87 | 17.6 17.6

(2) 1987–88 | 17.5 16.7
(3) 1988–89 | 17.5 15.9
(3) (4) 1989–90 | 17.0 15.0
(3) (4) 1990–91 | 17.0 14.0
(1) Cash figures adjusted to 1986–87 prices by excluding the effects of general inflation as measured by the GDP deflator.
(2) Estimated outturn.
(3) Budget forecast and projections.
(4) Rounded to nearest £ billion.

Below is the text of Mr Major’s written Parliamentary Answer on the Gross Domestic Product (Taxation) on 25th March 1988.

Mr. Mullin To ask the Chancellor of the Exchequer if he will state the percentage of gross domestic product accounted for by taxation (a) in the financial year 1987–88, (b) in the financial year 1988–89 and (c) in May 1979.

Mr. Major [holding answer 24 March 1988]: Taxes and national insurance contributions are estimated to have accounted for 37.9 per cent. of gross domestic product in 1987–88. The same percentage is forecast for 1988–89, after taking account of the Budget changes. No figures are available for individual months; for the financial year 1979–80, taxes and national insurance contributions accounted for 35.1 per cent of GDP.

Below is the text of Mr Major’s written Parliamentary Answer on the Finance Bill on 24th March 1988.

Mr. Rowe To ask the Chancellor of the Exchequer when the Finance Bill will be published.

Mr. Major The Finance Bill will be published on Thursday 14 April.

Below is the text of Mr Major’s written Parliamentary Answer on the Gross Domestic Product on 21st March 1988.

Mr. Wigley To ask the Chancellor of the Exchequer if he will give the latest comparative figures for levels of gross domestic product per capita in each of the United Kingdom regions, taking the figure for the United Kingdom as a whole to be 100.

Mr. Major [holding answer 18 March 1988]: I refer the hon. Member to the November 1987 edition of Economic Trends. The latest figures are available on page 86 of that document.

Mr. Wigley To ask the Chancellor of the Exchequer if he will give the latest figures for levels of gross domestic product per capita in each of the United Kingdom regions, including the continental shelf.

Mr. Major [holding answer, 18 March 1988]: I refer the hon. Member to the November 1987 edition of Economic Trends which presents the latest available data. As the November edition of Economic Trends states, it is not possible to include the continental shelf in the calculation of regional GDP per capita figures.

Below are extracts from Mr Major’s speech made to the Conservative Party Central Council meeting at Buxton on 18 March 1988. The extracts were published by Conservative Central Office as document 107/88.

JOHN MAJOR:

Labour have accused us of producing a budget for the “super-rich”. The best-off in society. They say that they are the only beneficiaries of abolishing the higher rates.

They are wrong. The whole economy benefits from lower tax rates. Because high tax rates stifle enterprise and dynamism. They remove the incentive to invest, expand and take risks. And without such incentives we have fewer jobs and lower living standards. For everyone.

They are wrong for another reason. For almost 2/3rds of those who benefit from the abolition of higher rates earn less than £40,000 a year. People like many surgeons, scientists, senior managers, the headmaster of a large comprehensive school, the university professor. Not the privileged elite but the talented people whose skills we need here.

And they are the very people we would lose if we stuck to tax rates well above those in other countries. For around the world Governments have recognised that high taxation deters effort and enterprise. We could ignore the worldwide trend to lower taxes – but only at the price of seeing these people take their skills abroad – to the US with a top tax rate of 28 cents in the dollar, to Canada with a top tax rate of 29 cents in the dollar; even to Socialist Australia and New Zealand. Is that really in the country’s interest?

But not only do Labour oppose the higher rate cuts. On Wednesday I asked John Smith to deny that he would reverse the cuts in basic rate tax of the past two budgets and take it back to 29p. Not one word of denial.

But Labour would not stop at that. For it is now clear that they stand by their commitment to abolish the ceiling on National Insurance Contributions. A commitment we uncovered to their dismay during the election. That means they want to slap an extra 9p in the pound in tax on all those earning over £15,860 – on the senior registrar, the middle manager, the deputy headmaster, the university lecturer. I gave Mr. Smith the chance to deny that too. Not one word of denial.

So now we know, Labour believe in high taxes. Not just for the super-rich. But for every taxpayer in the country. And we are the only party of low taxation. The only party that believes people know best how to spend their own money, on their own behalf, on their own families. And that is why we have set a new target: a basic rate of 20p in the pound as soon as we prudently and sensibly can.

But not recklessly. For we are also the party of prudence. To increase public expenditure while reducing taxes would be noteworthy in itself. It would have been easy to do that by putting it on tick. To do so while decreasing debt is a great achievement. Nigel Lawson deserves great credit for balancing the Budget. Through his efforts we are no longer day to day debtors.