House of Commons Hansard Debates for 23 Feb 1989

Mr. Norman Lamont : A change of 1 per cent. in the nationalised industries component of the retail prices index will at present lead to a change of approximately 0.054 per cent. in the RPI. The Autumn Statement (table 2.7) forecast an increase of 6 per cent. in the nationalised industries component of the RPI in the year to the fourth quarter of 1989.

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New Businesses

25. Mr. David Nicholson : To ask the Chancellor of the Exchequer what are the latest official figures on the number of business start-ups over the latest year for which figures are available.

45. Mr. Patrick Thompson : To ask the Chancellor of the Exchequer what was the number of business start-ups over the latest year for which figures are available.

63. Mr. Quentin Davies : To ask the Chancellor of the Exchequer what are the latest official figures on the number of business start-ups over the latest year for which figures are available.

76. Sir Michael Shaw : To ask the Chancellor of the Exchequer what are the latest official figures on the number of business start-ups over the latest year for which figures are available.

Mr. Major : In 1987, the latest year for which figures have been published by the Department of Employment, the net increase in the number of businesses registered for VAT was 45,000, comprising 205, 000 registrations and 160,000 deregistrations. Department of Employment figures for 1988 will be available in the summer.

Economic Growth

26. Mr. Andrew MacKay : To ask the Chancellor of the Exchequer what is his latest estimate of economic growth in the most recent one-year period for which figures are available.

57. Mr. Neil Hamilton : To ask the Chancellor of the Exchequer what is his latest estimate of economic growth in the most recent one-year period for which figures are available.

82. Mr. Boswell : To ask the Chancellor of the Exchequer what is the current rate of economic growth.

Mr. Major : The output measure of gross domestic product grew by 4 per cent. in real terms in 1988. This has been the fourth consecutive year of growth in excess of 3 per cent., a performance unmatched since the war.

Group of Seven

27. Mr. Andy Stewart : To ask the Chancellor of the Exchequer if he will make a statement on his last meeting with his counterparts in the Group of Seven.

36. Mr. Brazier : To ask the Chancellor of the Exchequer if he will make a statement on his last meeting with his counterparts in the Group of Seven.

65. Mr. Patnick : To ask the Chancellor of the Exchequer if he will make a statement on his last meeting with his counterparts in the Group of Seven.

103. Mrs. Roe : To ask the Chancellor of the Exchequer if he will make a statement on his last meeting with his counterparts in the Group of Seven.

Mr. Lilley : I refer my hon. Friends to the reply I gave to my hon. Friend the Member for Colne Valley (Mr. Riddick) on 15 February 1989 at column 204.

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Retail Sales and Credit

28. Mr. Menzies Campbell : To ask the Chancellor of the Exchequer if he will make a statement regarding the December and January figures for retail sales and consumer credit.

Mr. Lilley : Between December and January the volume of retail sales fell 1 per cent. in real terms.

The amount of consumer credit outstanding to finance houses and other specialist credit grantors, building societies, retailers and on bank credit cards increased by about £0.3 billion in December. The amount outstanding on all consumer credit agreements (published quarterly) increased by £1.3 billion in the fourth quarter of 1988, the lowest rise since the fourth quarter of 1987. Figures for January are not published yet.

These figures provide further evidence that growth of consumer spending and borrowing has slowed significantly since last summer, and that tighter monetary policy is proving effective.

Manufactured Goods

29. Mr. Butterfill : To ask the Chancellor of the Exchequer what information he has on the value of exports of manufactured goods for the United Kingdom for each of the last two years ; and if he will make a statement.

Mr. Major : United Kingdom exports of manufactured goods rose in value from £60,656 million in 1987 to £65,454 million in 1988. This is another indicator reflecting the strong performance of our manufacturing sector.

Investment and Consumption

30. Mr. Redwood : To ask the Chancellor of the Exchequer what was the growth of (a) total investment and (b) total consumption in 1988.

41. Mrs. Gorman : To ask the Chancellor of the Exchequer what was the growth of (a) total investment and (b) total consumption in 1988.

60. Mr. Carrington : To ask the Chancellor of the Exchequer what was the growth of (a) total investment and (b) total consumption in 1988.

75. Mr. Wood : To ask the Chancellor of the Exchequer what was the growth of (a) total investment and (b) total consumption in 1988.

Mr. Major : Figures for total investment and total consumption for the whole of 1988 are not yet available. In the first three quarters of 1988 total investment and total consumtion were 9.1 per cent. and 5 per cent. higher respectively than in the same period a year earlier.

Balance of Payments

31. Mr. Radice : To ask the Chancellor of the Exchequer what is his latest forecast for the balance of payments in 1989 and 1990.

104. Mr. Hardy : To ask the Chancellor of the Exchequer what is his estimate of the balance of payments deficit in 1988-89 and 1989-90.

Mr. Major : The Autumn Statement provided forecasts of the current account for calendar years 1988 and 1989 only. A new forecast will be published on Budget day.

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Tax Cuts

32. Mr. McCartney : To ask the Chancellor of the Exchequer if he will estimate the different impact of his tax cuts in the last Budget on the median earner in (a) the south-east and (b) other regions.

Mr. Cohen : To ask the Chancellor of the Exchequer if he will estimate the differential impact of his tax cuts in the last Budget on the median earner in (a) the south-east and (b) other regions.

Mr. Norman Lamont : I refer the hon. Members to the reply that my right hon. Friend the Paymaster General gave to the hon. Member for Bradford, West (Mr. Madden) earlier today.

Employment

33. Mr. Tim Smith : To ask the Chancellor of the Exchequer what has been the growth of total employment since 1983.

67. Mr. Cash : To ask the Chancellor of the Exchequer what has been the growth of total employment since 1983.

99. Mr. William Powell : To ask the Chancellor of the Exchequer what has been the growth of total employment since 1983.

100. Dr. Twinn : To ask the Chancellor of the Exchequer what has been the growth of total employment since 1983.

Mr. Major : The work force in employment has increased by over 2 million since March 1983 to over 25 million, its highest ever level.

Companies (Rate of Return)

34. Mr. Evennett : To ask the Chancellor of the Exchequer if he will give an estimate of the net real rate of return on non-North sea industrial and commercial companies in 1987.

49. Mr. Ian Taylor : To ask the Chancellor of the Exchequer if he will give an estimate of the net real rate of return on non-North sea industrial and commercial companies in 1987.

89. Mr. Mans : To ask the Chancellor of the Exchequer if he will give an estimate of the net real rate of return of non-North sea industrial and commercial companies in 1987.

Mr. Major : The net rate of return for non-North sea industrial and commercial companies rose for the sixth successive year to reach 10.2 per cent. in 1987. For 1988 it was forecast to be about 12 per cent. in the Autumn Statement, its highest level for 24 years.

Overseas Assets

37. Mr. Jacques Arnold : To ask the Chancellor of the Exchequer what is his estimate of the stock of United Kingdom net overseas assets at the end of 1987 ; and what earnings were generated by these assets in 1987.

70. Mr. Watts : To ask the Chancellor of the Exchequer what is his estimate of the stock of United Kingdom net overseas assets at the end of 1987 ; and what earnings were generated by these assets in 1987.

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72. Mr. Hayward : To ask the Chancellor of the Exchequer what is his estimate of the stock of United Kingdom net overseas assets at the end of 1987 ; and what earnings were generated by those assets in 1987.

Mr. Paice : To ask the Chancellor of the Exchequer what is his estimate of the stock of United Kingdom net overseas assets at the end of 1987 ; and what earnings were generated by these assets in 1987.

Mr. Moss : To ask the Chancellor of the Exchequer what is his estimate of the stock of United Kingdom net overseas assets at the end of 1987 ; and what earnings were generated by these assets in 1987.

Mr. Major : The stock of net overseas assets is estimated to have been £89.5 billion at the end of 1987. The net earnings on the United Kingdom's net assets in 1987 are estimated to have been £5,463 million.

Incomes

38. Mr. Robert G. Hughes : To ask the Chancellor of the Exchequer what has been the growth of real personal disposable income over the latest 12-month period for which figures are available.

90. Mr. Tredinnick : To ask the Chancellor of the Exchequer what has been the growth of real personal disposable income over the latest 12- month period for which figures are available.

98. Sir Michael McNair-Wilson : To ask the Chancellor of the Exchequer what has been the growth of real personal disposable income over the latest 12-month period for which figures are available.

Mr. Nicholas Bennett : To ask the Chancellor of the Exchequer what has been the growth of real disposable personal income over the latest 12- month period for which figures are available.

Mr. Major : I refer my hon. Friends to the answer my right hon. Friend the Financial Secretary gave earlier today to my hon. Friend the Member for Fylde (Mr. Jack).

Pensioners (Medical Insurance)

39. Mr. Nellist : To ask the Chancellor of the Exchequer how many pensioners do not receive tax relief for private medical insurance.

85. Mr. Graham : To ask the Chancellor of the Exchequer how many pensioners do not receive tax relief for private medical insurance.

Mr. Norman Lamont : At present no pensioners receive tax relief for private medical insurance. From April 1990, anyone paying eligible premiums for a person over 60--including themselves--will benefit from basic rate tax relief given at source, and higher rate relief if appropriate.

83. Mr. Turner : To ask the Chancellor of the Exchequer what is his latest estimate of the total cost to the Exchequer in a full year of tax relief for private medical insurance for pensioners.

Mr. Norman Lamont : I refer the hon. Member to the reply I gave to the hon. Member for Dunfermline, East (Mr. Brown) on 21 February at columns 542-43.

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Exchange Rate

40. Mr. Frank Field : To ask the Chancellor of the Exchequer if he will make a statement on the recent outcome of the Government's policy of achieving a firm exchange rate.

74. Mr. Worthington : To ask the Chancellor of the Exchequer if he will make a statement on the recent outcome of the Government's policy of achieving a firm exchange rate.

Mr. Lilley : I refer the hon. Members to the reply given to the Members for Newport, West (Mr. Flynn) and for Torfaen (Mr. Murphy) on 26 January at column 677.

Interest Rates

42. Mr. Knox : To ask the Chancellor of the Exchequer what assumptions on future rises in interest rates he is making in drawing up his Budget proposals.

Mr. Lilley : The Government never publish assumptions about future levels of interest rates.

46. Mr. McFall : To ask the Chancellor of the Exchequer what effect current interest rates are having on (a) business investment and (b) mortgage payers.

Mr. Lilley : Surveys from the CBI and from the Department of Trade and Industry show that strong investment growth is expected to continue. Higher mortgage interest rates mean that mortgage payers have, for a period, to curb expenditure on other things. This is one of the ways in which they reduce inflationary

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pressures. Both businesses and mortgage payers have far more to fear from a resurgence of inflation than from a period of higher interest rates.

47. Mr. Latham : To ask the Chancellor of the Exchequer whether he will make a statement on the level of interest rates.

Mr. Lilley : Bank base rates are 13 per cent.

Productivity

43. Mr. Hanley : To ask the Chancellor of the Exchequer if he will publish in tabular form the growth of productivity each year for the whole economy since 1980 in the United Kingdom and in each of the other major industrialised countries.

50. Sir David Price : To ask the Chancellor of the Exchequer if he will publish in tabular form the growth of productivity each year for the whole economy since 1980 in the United Kingdom and in each of the other major industrialised countries.

81. Mr. Rowe : To ask the Chancellor of the Exchequer what was the growth of productivity each year for the whole economy since 1980 in (a) the United Kingdom and (b) each of the other major industrialised countries.

106. Mr. Gerald Howarth : To ask the Chancellor of the Exchequer if he will publish in tabular form the growth of productivity each year for the whole economy since 1980 in the United Kingdom and in each of the other major industrialised countries.

Mr. Major : The information requested is as follows :

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|c|Growth of whole economy productivity|c|                                                                                                            

|c|(percentage change on a year earlier)|c|                                                                                                           

               |USA           |Japan         |France        |Germany       |Canada        |Italy         |United Kingdom|<1>G7                        

------------------------------------------------------------------------------------------------------------------------------------------------------

1981           |1.2           |3.0           |1.8           |0.9           |-5.8          |0.9           |2.2           |1.3                          

1982           |-1.7          |1.8           |2.4           |1.1           |6.7           |0.6           |4.3           |0.6                          

1983           |2.6           |1.4           |1.0           |3.1           |5.5           |0.8           |4.2           |2.4                          

1984           |2.9           |4.4           |2.2           |2.6           |2.0           |2.8           |1.0           |2.9                          

1985           |1.7           |4.0           |2.0           |1.3           |0.3           |2.4           |2.0           |2.1                          

1986           |0.7           |1.6           |1.9           |1.3           |1.1           |2.4           |2.4           |1.3                          

1987           |0.9           |3.3           |2.0           |1.2           |0.9           |3.3           |2.9           |1.8                          

<2>1988        |1.7           |4.2           |3.0           |2.9           |-2.6          |2.4           |2.6           |2.4                          

Period                                                                                                                                                

average        |1.2           |3.0           |2.0           |1.8           |1.0           |2.0           |2.7           |1.8                          

<1> Weighted average.                                                                                                                                 

<2> The estimates for 1988 compare with the average level of productivity in the first three quarters (except for France, for which data for the      

first half of 1988 only are available) with the average level in 1987 as a whole.                                                                     

Source: OECD, CSO.

Child Care (Taxation)

44. Ms. Armstrong : To ask the Chancellor of the Exchequer what arrangements he has made with regard to the tax liability of employees in his Department for the proposed child care provision.

Mr. Brooke : My Department is participating in one of two multi- departmental holiday play schemes being run in London during school holidays by the Westminster Play Association. The scheme will be treated in the same way as any other scheme would, where tax liability arises only on the net cost to the employer. Taking account of parental contributions, the scheme is broadly self-financing.

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Tax and Prices Index

51. Mr. Burns : To ask the Chancellor of the Exchequer what was the increase in the tax and prices index in the 12 months to December 1988.

Mr. Lilley : In the 12 months to December 1988 the tax and prices index rose by 4.8 per cent.

Business Expansion and Share Option Schemes

52. Mr. Nigel Griffiths : To ask the Chancellor of the Exchequer if he will estimate the cost in revenue of the business expansion and share option schemes.

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Mr. Norman Lamont : I refer the hon. Member to table 21.1.25 of Cm. 621, "The Government's Expenditure Plans" chapter

21--supplementary analyses and index.

Privatisation

53. Mr. David Porter : To ask the Chancellor of the Exchequer what proportion of the state-owned commercial sector in 1979 has now been transferred to the private sector.

68. Mr. Batiste : To ask the Chancellor of the Exchequer what proportion of the state-owned commercial sector in 1979 has now been transferred to the private sector.

87. Mr. Hind : To ask the Chancellor of the Exchequer what proportion of the state owned commercial sector in 1979 has now been transferred to the private sector.

Mr. Norman Lamont : I refer my hon. Friend to the reply I gave to my hon. Friend the Member for Battersea (Mr. Bowis) on 20 February 1989, at column 478.

Personal Equity Plans

54. Mr. John Marshall : To ask the Chancellor of the Exchequer what is the latest estimate of the number of PEPs taken out in 1988.

Mr. Norman Lamont : Over 100,000 PEPs were taken out in 1988.

Manufacturing Industry

55. Mr. Burt : To ask the Chancellor of the Exchequer what is his latest estimate of the investment intention of British manufacturing industry.

108. Mr. Irvine : To ask the Chancellor of the Exchequer what is his latest estimate of the investment intentions of British manufacturing industry.

Mr. Key : To ask the Chancellor of the Exchequer what is his latest estimate of the investment intentions of British manufacturing industry.

Mr. Major : The latest survey of investment intentions carried out by the Department of Trade and Industry and published in December showed that manufacturing investment was expected to increase by 11 per cent. in real terms in 1989.

Mortgage Interest Rates

56. Mr. Ieuan Wyn Jones : To ask the Chancellor of the Exchequer if he will make a statement on the impact on first-time house buyers of the increase in mortgage interest rates since September 1988.

Mr. Lilley : Increases in mortgage rates mean that all mortgage payers, including first-time house buyers, will for a period need to cut back on other expenditure. But the resurgence of inflation which would have followed if the Government had failed to take action would have been far more damaging.

European Monetary System

59. Mr. Steel : To ask the Chancellor of the Exchequer if he will make a further statement on his policy towards membership of the European monetary system.

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