Budget Statement (Hansard, 20 March 1990)

§ The Chancellor of the Exchequer (Mr. John Major)

The Government's economic policy has two main objectives. The first is to bring inflation down again. Until that happens, we cannot reduce interest rates and keep them down. The second is to enable this country to take the opportunities of the 1990s. In western Europe, the single market is nearly on us. And the whole of eastern Europe, where there is great good will for Britain, has opened up in a most dramatic way. We need to make sure that British business can take advantage of these changes.

These two objectives are closely related. Unless we succeed in the first, we are unlikely to do so in the second. Therefore this Budget will take no risks with inflation. It will maintain a strong fiscal surplus. It will, above all. be a budget for savers. It will provide a range of incentives to save and a novel incentive to give. It will bring the introduction of independent taxation for married women. It will introduce important new measures for business and keep up the pace of supply side reform. It will remove an old grievance from the tax system and make the social security system fairer, and it will abolish two taxes.

In framing the Budget, I have had the great advantage of the fiscal reforms of my predecessor, my right hon. Friend the Member for Blaby (Mr. Lawson). He has left the public finances stronger than at any time in living memory and he was also the architect of as comprehensive a tax reform as any other Chancellor this century. That will be an enduring record.

I will come to the detailed measures later. First, I wish to review the performance of the economy in 1989 and look at the prospects for 1990; I will then deal with monetary policy and public sector finances. As usual, the Red Book, together with a number of press releases filling out the details of the Budget measures, will be available from the Vote Office as soon as I have sat down.