Below is the text of Mr Major’s written Parliamentary Answer on Public Investment on 11th February 1988.
Mr. Henderson To ask the Chancellor of the Exchequer what is the level of public investment as a proportion of gross domestic product.
Mr. Major In 1987–88 public sector capital spending, as defined in table 2.10 of volume I of the 1988 public expenditure White Paper, is estimated to be about 5.5 per cent. of gross domestic product.
Below is the text of Mr Major’s Parliamentary Answer on Overseas Assets, made on 11th February 1988 in the House of Commons.
Mr. Chapman To ask the Chancellor of the Exchequer if he will give his latest estimate of the United Kingdom’s net assets overseas.
Mr. Major At the end of 1986 the United Kingdom’s net assets overseas were estimated at £114 billion.
Mr. Chapman Will my right hon. Friend confirm that that is a huge increase in recent years? Does he agree that the net income from those assets is highly beneficial to our economy? Does not all this underline the success of the previous Chancellor’s decision eight years ago to abolish exchange controls?
Mr. Major I entirely agree with my hon. Friend. He is right in both his propositions. The net income in the first three quarters of the present year amounted to £5.4 billion, and the abolition of exchange controls was wholly welcome and beneficial.
Below is the text of Mr Major’s Parliamentary Answer on Manufacturing Investment, made on 11th February 1988 in the House of Commons.
Mr. Burt To ask the Chancellor of the Exchequer what are the latest projections for the growth of manufacturing investment in the United Kingdom.
Mr. Major Manufacturing investment is projected to increase by 11 per cent. in real terms in 1988, according to the Department of Trade and Industry’s latest investment intentions survey.
Mr. Burt Those figures are just the tonic for those concerned about the growth of manufacturing industry. Does my right hon. Friend agree that the significant increase in industrial productivity since 1981 means that investors should hold their nerve and that their confidence should remain high? Confidence is threatened only by the Jeremiahs on the Opposition Benches.
Mr. Major I entirely agree with my hon. Friend. Since 1979 manufacturing productivity growth has continued at a substantial level, and for the past year at a rate of 6.5 per cent.
Mr. Robert Sheldon Has the right hon. Gentleman seen today’s quarterly survey from the Manchester chamber of commerce and industry, which represents by far the largest part of industry in the Greater Manchester area? Will he note that expected manufacturing investments are less than they were previously? They all seem to want reductions in interest rates to reverse that trend. As the report was published only after the increase in interest rates, what does the Minister intend to do to restore the expectation of manufacturing investment?
Mr. Major I cannot agree with the right hon. Gentleman that the survey is as pessimistic as he painted it. It paints an optimistic picture, and rightly so. Manufacturing investment is growing strongly. The right hon. Gentleman will recall that the CBI’s January quarterly trend survey showed that investment intentions still remain strong. Manufacturing investment is doing exceedingly well at present, and I share the right hon. Gentleman’s wish that it should continue to do so.
Mr. Budgen Does my right hon. Friend agree that the Ford pay dispute is unfortunate because it inhibits investment and is a clear sign of overheating in the economy?
Mr. Major With great respect to my hon. Friend, it would be unwise to read overheating into every indicator. Improvements on the supply side since 1979 mean that firms can operate at a much higher rate of capacity utilisation than before, and my hon. Friend’s concern may be a little overdone. In any event, if overheating were to appear, there is no doubt that the Government would not hesitate to take action against inflationary pressures.
Mr. Holland When will the Chief Secretary realise that he cannot fool all the people all the time on manufacturing investment? The reality is that, in real terms 1980 prices, manufacturing investment now is 10 per cent. below what it was in 1979. Even if the CBI forecast of an 8 per cent. increase this year were achieved, the 1979 level would still not be reached, and this is at a time when the world economy is slowing down. When will the right hon. Gentleman pursue policies which, in the long term, will ensure that savings go into manufacturing investment so that we can rebuild the competitive economy?
Mr. Major The end product of investment is productivity and profitability, and the quality of investment, as well as its quantum, are extremely important, and those have improved. The evidence of higher profitability and better productivity suggests that investment has been running at a high level and that it has been quality investment.
Below is the text of Mr Major’s Parliamentary Answer on NHS Expenditure, made on 11th February 1988 in the House of Commons.
Mr. Boyes To ask the Chancellor of the Exchequer if, in view of recent representations, he will increase planned public expenditure for 1988-89 on (a) National Health Service provision and (b) education and training.
Mr. Bernie Grant To ask the Chancellor of the Exchequer what representations he has received in relation to his published expenditure plans for (a) the National Health Service and (b) Government expenditure generally.
The Chief Secretary to the Treasury (Mr. John Major) The White Paper plans for next year already include increased provision for the Health Service, education and training, as part of the £4.6 billion increase in the total for programmes.
Mr. Boyes The Government’s attacks on the National Health Service and on the education service are nothing short of political vandalism. Is the Minister aware that in a recent poll 86 per cent. of the people questioned suggested that it would be better to give money to the National Health Service, even if that meant increasing taxation? If cash is available on Budget day, it should be given to improve the National Health Service and the education system, rather than to line the pockets of the Minister’s friends in the City.
Mr. Major The Government are as concerned as the hon. Gentleman about the National Health Service. The public expenditure plans for next year and for the two subsequent years show an increase of over £1 billion for the Health Service. It is the most substantial cash increase over a period that the Health Service has ever received.
Mr. Grant Does the Minister agree that, instead of fiddling around with this large sum of money, it would be better to spend some of it, not only on the Health Service, but on increasing rate support grant for local authorities such as ILEA, which will probably have to make 3,000 teachers redundant? My authority will have to make cuts amounting to £45 million this year. Would it not be better for him to use some of the available money to alleviate the suffering and poverty that the Government have caused?
Mr. Major As to the Health Service, I reiterate the point that I made a moment ago: there will be substantial increases in programme expenditure next year amounting to £4.5 billion. ILEA, for all the expenditure that it has lavished, has failed to provide a decent education service in London, and I shall be glad to see the end of it.
Sir William Clark Does my right hon. Friend agree that the one subject on which Opposition Members are expert is spending other people’s money? Does he also agree that throwing public money – taxpayers’ money – at, for example, ILEA, with its poor academic record, would be a complete and utter waste of money, just as lavishing taxpayers’ money on the National Health Service without cuts – [HON MEMBERS: “Cuts?”] – without improvements in efficiency would be a derogation of the Government’s duty?
Mr. Major The Government are certainly keen to see increased efficiency in the National Health Service, and the cost-improvement programmes have provided that to a certain extent. We hope to see more efficiency in the future.
ILEA is a uniquely high-spending authority. Moreover, I doubt whether it gives value for money. It employs two and a half times as many administrators per pupil as the average; twice as many non-teaching staff per pupil as the average; and its spending on the youth service is two and a half times that of even the most generous inner-city partnership. Clearly, it spends far more than it ought, and in the wrong way.
Mr. Andrew MacKay Is my right hon. Friend aware that many of us have noted that in real terms the Government have spent a lot more on the National Health Service, but, all the same, many of us believe that the problems of the NHS are much more complex and cannot be solved just by throwing more taxpayers’ money at it? A radical review of the whole service 40 years on would be better than spending extra money willy-nilly.
Mr. Major I entirely agree with my hon. Friend and hope that we shall have such a radical review. I take my hon. Friend’s point about the increase over retail prices. The increase in expenditure is well over 30 per cent. since 1979, which far outstrips that provided by any previous Government.
Mr. Beith Does the Chief Secretary not recognise that, in real terms, taking the level of price increases in the economy as a whole, the increase for the Health Service this year is only 1.2 per cent., that it is likely to be less than that when the generally higher costs of the Health Service are taken into account, and that it will be nothing at all if the health authorities are expected to fund any part of the nurses’ pay review? Why does he not respond to the massive public concern on that matter?
Mr. Major I take the hon. Gentleman’s underlying point that “real terms” can be defined in more than one way. We are both aware of that. However, in terms of the normal definition of “real terms”, with the income-generation schemes and the cost-improvement schemes, the National Health Service will receive a real terms increase of about 3 per cent. next year.
On the second part of the hon. Gentleman’s question, we will, as usual, consider that matter when we have the report of the Nurses Pay Review Body, and we shall then decide whether we can accept it. Other matters will follow from there.
Mr. Sayeed Will my right hon. Friend confirm that the Government’s expenditure plans show that spending on social security, health and education alone account for 60 per cent. of total Government expenditure – the highest proportion ever? Does he agree that those areas of massive public expenditure show rises even after the application of the overall GDP deflator?
Mr. Major The figures may be even larger than my hon. Friend suggests, but his underlying premise is entirely correct.
Mr. Gordon Brown Does the Chief Secretary not find it surprising that no one – the British Medical Association, the National Association of Health Authorities in England and Wales or the Royal College of Nursing – agrees with him that the Health Service is properly funded? Given that he has had to concede that he has a Contingency Fund of £3.5 billion, will he now allay the fears of health authorities throughout the country which are faced with having to budget for cuts and closures? Will he state today that he can and will fully fund the nurses’ and health workers’ pay settlements?
Mr. Major We have not – [Interruption] – if hon. Gentleman – [Interruption].
Mr. Speaker Order. The Minister has been asked a question.
Mr. Major The provision for the National Health Service for next year has been substantially increased. Those who question the size of the increase simply have not taken into account the enormously increased provisions that have been made. It would be more helpful if the hon. Gentleman would concern himself with reality rather than with fiction.
Below is the text of Mr Major’s written Parliamentary Answer on the Gross Domestic Product on 5th February 1988.
Mr. Nicholas Bennett To ask the Chancellor of the Exchequer if he will give the latest figures for the growth of gross domestic product over the past year.
Mr. Major Real gross domestic product is provisionally estimated to have grown by 5.25 per cent. in the year to the third quarter of 1987.
Below is the text of Mr Major’s written Parliamentary Answer on the National Economic Development Council on 5th February 1988.
Mr. Dykes To ask the Chancellor of the Exchequer when he next plans to meet the National Economic Development Council to discuss economic matters.
Mr. Major My right hon. Friend the Chancellor plans to meet the National Economic Development Council next year.
Below is the text of Mr Major’s written Parliamentary Answer on Economic Growth on 5th February 1988.
Mr. McLoughlin To ask the Chancellor of the Exchequer to what extent growth in the economy has been reflected in falling unemployment over the past year.
Mr. Major Strong growth in the economy accounts for the greater part of the fall in unemployment of over half a million over the past year, the largest fall since similar records began in 1948.
Below is the text of Mr Major’s written Parliamentary Answer on Trading Fund Status on 27th January 1988.
Mr. Lord To ask the Chancellor of the Exchequer if, in the light of the establishment of the Atomic Energy Authority as a trading fund, any other authorities or Government organisations will be brought into the category of a trading fund.
Mr. Major Trading fund status is an option for organisations whose operations make it a suitable method of financing. There are no firm proposals to establish additional trading funds at present, but cases will continue to be considered on their merits.
Below is the text of Mr Major’s written Parliamentary Answer on Interest Rates on 26th January 1988.
Mr. Austin Mitchell To ask the Chancellor of the Exchequer what estimate he has made of the correlation between interest rates and the public sector borrowing requirement from 1979 to 1987.
Mr. Major My right hon. Friend the Chancellor has made no estimate. United Kingdom interest rates are influenced by numerous factors including interest rates abroad, inflationary expectations, financial innovation and private sector borrowing, in addition to public sector borrowing. Consequently, simple correlations between interest rates and the public sector borrowing requirement are uninformative.
Below is the text of Mr Major’s written Parliamentary Answer on Personal Incomes (Statistics) on 25th January 1988.
Mr. Austin Mitchell To ask the Chancellor of the Exchequer what evidence he has on whether increases in wage rates in manufacturing industry have led to inflation; and if he will include in the Official Report a table showing for the period since May 1979 the increase in (a) median earnings of blue collar workers, (b) median earnings of white collar workers, (c) the remuneration of directors of public companies and (d) the earnings of those employed in the financial sector.
Mr. Major [holding answer 22 January 1988]: Wage rates in manufacturing are more likely to be a determinant of manufacturing employment and I would draw the hon. Member’s attention to the Treasury paper “The Relationship between Employment and Wages”, published in January 1985.
On the second part of the question, the hon. Member’s attention has on numerous occasions been drawn to the publications in which such information as is available may be found. In this instance, the New Earnings Survey will provide all information requested except details of remuneration of directors of public companies which are not normally collected by Government.