Tag: 1989

Below is the text of Mr Major’s written Parliamentary Answer on Charities on 21st December 1989.

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Mr. Alfred Morris To ask the Chancellor of the Exchequer if he has any plans to legislate for the removal of taxation on charitable fund raising by appeals like that for Children In Need or to make compensatory ex-gratia payments to such appeals of equivalent amounts to any taxation deducted.

Mr. Major [holding answer 20 December 1989]: Donations to charitable appeals are not liable to income tax, corporation tax or VAT, provided the donors receive no benefit in return. One-off fund-raising events held by charities are exempt from VAT, and non-charitable bodies can also obtain VAT exemption when organising one-off events as agents of an appeal fund which has charitable status. Income tax or corporation tax may be payable where the fund-raising activities amount to trading but, by concession, the Inland Revenue does not charge tax on the profits where certain conditions are satisfied. Full details of the concession (C4) are contained in the Inland Revenue leaflet IR1 1988.

Below is the text of Mr Major’s written Parliamentary Answer on Harbours on 21st December 1989.

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Mr. John D. Taylor To ask the Secretary of State for Northern Ireland if he will list by category the number of(a) yachts, (b) fishing boats, (c) pleasure boats and (d) other sea-going vessels registered at Portrush, Ballycastle, Bangor, Ardglass, Donaghadee and Portstewart harbours.

Mr. Major [holding answer 18 December 1989]: I have been asked to reply.

I regret that this information is not available centrally and could be obtained only at disproportionate cost.

Below is the text of Mr Major’s written Parliamentary Answer on the Married Couple’s Allowance on 20th December 1989.

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Mr. Raison To ask the Chancellor of the Exchequer (1) what is his best estimate of the saving from abolishing the married couple’s allowance for non-pensioners in 1990;
(2) what is the expected cost of the married couple’s allowance in 1990–91.

Mr. Major The direct revenue cost of the married couple’s allowance in a full year at 1990–91 levels of income is estimated to be £5 billion. If the allowance were to be given only to married couples where either the husband or wife was aged 65 or over, there would be a saving of about £4.5 billion.

Estimates are based on a projection of the 1987-88 survey of personal incomes, and, in line with Autumn Statement forecasts, assume 7.5 per cent. indexation of allowances and the basic rate limit; all estimates are provisional.

The text of Mr Major’s speech to the Stock Exchange’s Christmas Lunch on 20th December 1989.

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CHANCELLOR OF THE EXCHEQUER:

I’m pleased to have been invited to join you for two reasons. First, because it is an agreeable occasion in itself, and second, because it has been a pretty boring year to far, and coming to the Stock Exchange Christmas Lunch will give me something to remember it by.

This is the third successive years I will have both begun and ended in the treasury. In saying this, I am of course assuming that I will end the year in the Treasury – you may regard this as rash, since there are, after all, eleven days to go yet! Nonetheless, I will take the risk.

The Treasury has lost none of its subtle ways in my absence. Treasury officials really are in a class of their own. And to prove it – they have a language of their own.

For example, the Delphic phrase, “We are still crawling over these numbers”, really means “this thing is riddled with mistakes”.

“There is one slight wrinkle” translates as “the whole idea is fundamentally flawed”.

“I think the point you made may well be right, Chancellor” translates as “it’s absolute rubbish, but in this daft world anything can happen”.

And heaven help you if you are told some question is “essentially a matter for your political judgement”, that means “you got yourself into this mess – now get yourself out of it”.

But jargon is not just the preserve of civil servants. The City has its own jargon too. It starts with the radio in the morning, and the compelling news of how the American long bond has fared in Far East trading. And it continues all day. The pound does not go up or down’ nothing so mundane, it is “firm” or “soggy”. Trading is “choppy” or “directionless” – and I’m not sure which is worse. And huge fluctuations are put down to a mysterious phenomenon described as a “nervous European afternoon”.

And how about the following, which I find published at the foot of one eminent city firm’s circular:

“This material is for your private information and we are not soliciting any action based upon it. Opinions expressed are our present opinions only. The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such”.

This really means:

“For heaven’s sake, take no action on the basis of this circular. We don’t want to be sued. In any event, we may change our mind by this afternoon. Our conclusions are based on ropey information, and you would be loopy to take any notice of it”.

I am not being critical. I know how they feel. I just wonder if I could have that long caveat stamped on Treasury forecasts before I presented them to Parliament! Fortunately, I don’t need to – they are the best forecasts in the business, by and large!

And these forecasts are clear for next year. They leave me in no doubt about the priorities for economic policy either. I have made no secret of my determination to get inflation down, and keep it down. For inflation, if it were allowed to take hold again, would be intensely damaging. It is not just that it undermines business planning and investment, and provokes industrial strife – though that in itself is damaging enough. It is that inflation is socially divisive on a grand scale. It favours the debtor at the expense of the saver, and the strong at the expense of the weak. It is quite simply unacceptable.

So inflation has to be squeezed out using all the practical methods to hand. Which means monetary conditions have to be adequately tight. Of course there are always those who fear that the cure will be worse than the disease. But no one should underestimate the underlying strength of the real economy today, which is far healthier, more resilient, and more independent than the condition in which is entered the ‘80s. In the long term, the economy will be stronger, not weaker, for the action we have taken now. So to the doubters I say simple this: the soft option is not an option. And I believe that message is now well understood, and I see no need to labour it on this festive occasion.

And I am also confident that I shall not need to borrow the technique one South American President, who has recently stated that he will go into exile if the 1990 inflation rate exceeds his target. He made the same promise last year if he missed his 1989 target of 80%. In the 12 months to November the rate was 77.9%. So far so good: we will watch events with interest.

Another matter I have been watching with interest and which I should mention while I am at the Stock Exchange is the progress your exchange is making in preparing for the future. I was very glad to learn that a design for TAURUS is now ready to go out to consultation. With 1992 approaching fast, it is clearly of the greatest importance that we have an effective and modern system, and I hope that all concerned can now move quickly to achieve that.

TAURUS is, of course, not only the name of your settlement system. To far more people it is a sign of the Zodiac. I am not myself a great believer in horoscopes, although I have made clear that we take a wide range of indicators into account when deciding whether monetary conditions are right. In this respect, there is one particular indicator whose status I have decided merits upgrading. Many people present may not realise the close relationship that existed for so long between the sterling dollar exchange rate and the performance of the English cricket team. Regrettably, this has broken down somewhat over recent years, but I believe it may still be useful, and so officials have been examining this matter carefully, to see what lessons we may usefully draw.

There are clearly still a few wrinkles in the system. For example, I gather that on the basis of the Test team’s dismal performance over the past few years, the pound should now be worth less than 40 cents. There are a number of possible explanations for this:

(i) It could be that there has been a chance in exchange rate policy, towards maintaining a firm pound, and that this has been spectacularly successful
(ii) Or it could be that there has been a change in policy by England’s cricket selectors, which has been spectacularly unsuccessful
(iii) It could mean that the pound is about to plummet
(iv) Or it could simply be that you can prove anything with statistics

I leave you to judge which of these is most likely. The conclusion I prefer to draw is that England are about to beat the West Indies 5-0, and win all their future matches for the next few years as well. And on that agreeable note, I wish you all a very Merry Christmas, and a Good New Year.

Below is the text of Mr Major’s written Parliamentary Answer on Department of Transport (Expenditure) on 18th December 1989.

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Mr. David Howell To ask the Chancellor of the Exchequer whether he will now review the policies of taxation in relation to benefits to employees from the provision of workplace nurseries and other child care facilities by employers.

Mr. Major I refer my right hon. Friend to the reply that my hon. Friend the Financial Secretary gave to the hon. Member for Norwood (Mr. Fraser) on 3 November at column 361.

Below is the text of Mr Major’s written Parliamentary Answer on Department of Transport (Expenditure) on 18th December 1989.

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Mr. David Howell To ask the Chancellor of the Exchequer whether he will now review the policies of taxation in relation to benefits to employees from the provision of workplace nurseries and other child care facilities by employers.

Mr. Major I refer my right hon. Friend to the reply that my hon. Friend the Financial Secretary gave to the hon. Member for Norwood (Mr. Fraser) on 3 November at column 361.

Below is the text of Mr Major’s written Parliamentary Answer on Workplace Nurseries on 18th December 1989.

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Mr. David Howell To ask the Chancellor of the Exchequer what is his policy on the taxation of benefits to employees accruing from the provision of workplace nurseries and creches.

Mr. Major Employees pay income tax on their earnings whether received in cash or in kind. A subsidised place in a workplace nursery or creche is a benefit in kind and any subsidy is a proper subject for tax. The costs to the employer of subsidising workplace nurseries – or otherwise financing childcare for employees – is allowable against corporation tax.

Below is the text of Mr Major’s written Parliamentary Answer on Valuation Services on 15th December 1989.

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Mr. Dykes To ask the Chancellor of the Exchequer what plans the Government have for valuation services; and if he will make a statement.

Mr. Major In the light of studies carried out by an interdepartmental group of officials, the Government have taken the following decisions affecting the Government’s valuation services and the management of Government property.

First, a project team under Treasury leadership will investigate how best to set up consistent and compatible databases for each of the Government’s main property estates, to be used both for purposes of capital asset management and for assessment of Government contributions in lieu of rates. The team will begin work shortly.

Secondly, Departments will by April 1991 be “untied” for valuation work which does not need to be undertaken in-house. Such work will be considered for market testing and contracting-out. Valuations for the purposes of assessing liability to business rates and other taxes will continue to be done in-house.

Thirdly, in general valuation services provided by Government valuers, whether to Government Departments or to other bodies, should be charged for. The aim is to introduce charging from April 1991.

Finally, the deployment of Government valuers will continue broadly as now, except that the Inland Revenue will take over from April 1991 responsibilities for valuation of the Government’s estates for rating purposes from the Treasury’s rating of Government property department, which will cease to exist from that date. Consideration will be given to establishing parts of the Government’s valuation services as executive agencies.

Below is the text of Mr Major’s written Parliamentary Answer on the Civil List on 7th December 1989.

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Mr. Vaz To ask the Chancellor of the Exchequer what was the total amount payable under the Civil Lists Acts to the royal family for each year since 1979 and for the present year.

Mr. Major Following is the information:

Payments for the Civil List under the Civil List Acts 1937, 1952. 1972 and 1975 | Repaid by Her Majesty The Queen

Year | £ | £
1979 2,996,600 218,200
1980 3,791,350 263,800
1981 4,249,273 285,073

Below is the text of a press release from HM Treasury on 5th December 1989, following Mr Major’s speech at the annual lunch of the Association of British Chambers of Commerce.

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CHANCELLOR OF THE EXCHEQUER:

Difficult Year, Promising Decade Press Release

The Chancellor, John Major, speaking today at the inaugural annual lunch of the Association of British Chambers of Commerce expressed his hope for a cordial and productive relationship with the Association. He went on;

“You are an important representative voice for business in Britain today, and I can assure you that the Government will pay a great deal of attention to your views”

The main priority is to get on top of inflation. That requires tight monetary and fiscal policies which would inevitably have an impact on business. But it was reassuring that investment was holding up well and the regional pattern of the slowdown was most pronounced in those areas where excess demand had been most evident.

“I do not myself believe that a recession is likely or necessary; although in the complex international economy of today no one can ever be certain of that. What gives me confidence about the long term is the underlying health and strength of British business. That is considerable”.

He noted particular cultural changes that are likely to be long-lasting.

“Greater worker involvement in industry has also contributed to a real erosion of the ‘them and us’ divide which for so long bedevilled British industry. The truth is, there has been a culture change. It was long overdue, and it is happening – to some extent is has happened”.

“And the signs are that this culture is becoming entrenched. As young people see that starting their own business really is an option, more and more of them envisage doing so themselves in the future”.

Looking to the future, the Chancellor stressed that;

“Next year will be difficult, but the next decade is full of promise”.

“I hope British industry will gather the confidence to regain the markets we have lost and to attack the markets we have not yet conquered.”

“… the underlying state of British industry is one of rude health. It is productive and well equipped; and it faces unparalleled new business opportunities. In the last few years, British industry has demonstrated a greatly improved supply response to rising living standards and rising demand at home. Now is the time to go out and look for business elsewhere, to maintain profits and output and jobs. It is not a time for passive gloom. It is a time for active marketing – and I wish you well.”