§ Mr. Boswell
To ask the Prime Minister if she will make a statement on the achievements of Her Majesty's Government during 1989.
§ The Prime Minister
Economic growth has continued, although at a slower pace than recently, as domestic demand growth has slowed. The actions taken by the Government to reduce the growth of domestic demand and to bear down on inflation are clearly having their intended effect. Investment continued to rise. Business investment, in particular, grew strongly and reached a new record level as a share of GDP. Net start-ups of new businesses—as measured by VAT registrations—set a new record.
The economy has continued to create new jobs; unemployment has continued to fall and is now around two thirds of the average EC level.383W
The Government have maintained sound public finances and by the end of the current financial year will have repaid £30 billion of debt in just three years, saving nearly £3 billion a year in interest payments.
The Government have increased spending on priority programmes while maintaining a downward trend over time in the ratio of public spending to GDP. In 1988–89, the ratio was under 40 per cent. for the first time in over 20 years.
The Government have made further progress in the drive to improve value for money in public expenditure—for example, in the Civil Service, implementing the next steps initiative.
The Government have continued the programme of tax reform whose aim has been to create a climate in which businesses thrive and individual initiative is rewarded. The 1989 Budget increased incentives for share ownership, reformed the life assurance tax regime and simplified that for pensions. Employees' national insurance contributions were reformed and reduced. The differential between leaded and unleaded petrol was increased, encouraging the use of unleaded petrol whose market share has grown to nearly 30 per cent., compared with under 2 per cent. a year ago.
The privatisation programme has continued with the successful sale of the water industry. As a result of this policy and tax reliefs designed to encourage shareholding, 22 per cent. of the adult population own shares.
The new employment service brings together benefit payment and job placement functions. It has helped hundreds of thousands of unemployed people into training and jobs.
Employment training is now offering high-quality training for employment to over 210,000 previously unemployed people. The new youth training programme has been launched as a locally delivered high-quality training programme to equip our young people for the challenges of the 1990s and beyond. Compacts between schools and local employers are being established throughout the country. The Training Agency was established to be responsible for the implementation of these and other training and enterprise programmes.
Training and enterprise councils (TECs) will give local employers responsibility for the design and delivery of training to meet the needs of local industry and commerce. Alredy 50 TECs, covering more than half the working population, have been established and are receiving development funding.
The Dock Work Act 1989 has removed from the statute book the 40-year-old dock labour scheme which has sustained restrictive practices and surplus labour in our ports, thus reducing their efficiency and discouraging investment.
The Employment Act 1989 promotes equality of opportunity for women in employment, removes unnecessary restrictions on young people at work, and paves the way for the removal of the weight of industrial training board bureaucracy from major sectors of British industry.
The enterprise initiative continues to attract strong interest from small and medium-sized businesses. A total of 40,000 applications have been received since January 1988, with demands spread throughout the United Kingdom and across both manufacturing and service sectors.384W
The Government have continued to promote innovation in industry. The market for telecommunications has been liberalised further, notably by the decision to license three consortia to operate personal communications networks, a new form of mobile telephone service that will be based on radio technology.
The Companies Act 1989 has introduced a number of improvements to the regulation of and law on companies, financial services, merger control and insolvency.
The White Paper, "Opening Markets: New Policy on Restrictive Trade Practices" set out the Government's plans for dealing more effectively with anti-competitive agreements.
The DTI environmental programme was launched in May to provide information, advice and encouragement to business to help it successfully address emerging environmental challenges and opportunities.
The Electricity Act 1989 provides for the reorganisation and privatisation of the electricity supply industry in England, Wales and Scotland. Substantial progress has been made in reorganising the industry and the Government intend that the CEGB and the area boards will be reconstructed as Companies Act companies at the end of March 1990.
Government policies on taxation and licensing have ensured that 1989 was another successful year for the United Kingdom continental shelf. Drilling activity in 1989 matched the record levels in 1988.
The Energy Efficiency Office's programme secures recurrent annual savings now worth over £500 million per year. In 1989 it introduced a major best practice programme, to advance and spread good practice in energy efficiency. The Electricity Act 1989 will give further impetus to energy efficiency, both from competition in generation and from the requirement on suppliers to provide customers with specific guidance on this subject.
The Government have acted to ensure that Britain's growing transport needs are met safely, efficiently and with proper respect for the environment.
Agreement in principle has been achieved on key elements of a liberalised internal market in aviation in the European Community. The Government have intensified aviation security, and have brought forward the Aviation and Marine Security Bill. The Government have approved investment by the Civil Aviation Authority in a new en-route air traffic control centre that will greatly increase capacity.
The Government have agreed external financing limits which will allow British Rail to undertake 75 per cent. more investment in real terms over the next three years than in the previous three years, and London Regional Transport 70 per cent. more. The go-ahead was announced for the extension of the Jubilee line into docklands.
The White Paper "Roads for Prosperity" announced plans to more than double the road programme in England to over £12 billion. The emphasis will be on widening existing routes so as to deliver extra capacity quickly and with minimum environmental effect. Planned investment in road construction over the next three years is 50 per cent. higher in real terms than in the previous three years. "Roads in Wales: Progress and Plans for the 1990s" set out the major investment programme for Welsh roads. In Scotland it has been announced that provision for new construction and improvements of motorways and 385W trunk roads will by 1992–93 be substantially above the current level, while expenditure on maintenance and construction together will also be significantly higher.
The Green Paper "New Roads by New Means" set out proposals for the private financing of new roads additional to the publicly financed road programme. The Government have announced a range of proposals for tackling traffic congestion in London.
The Government have taken important steps to improve transport safety, through the publication of the White Paper "The Road User and the Law", hard-hitting campaigns to improve road safety and the establishment of the marine accident investigation branch.
The Government have responded promptly and introduced comprehensive measures to deal with several outbreaks of food-borne illness and contamination incidents in order to protect consumers throughout the country. A Food Safety Bill has now been introduced in Parliament to ensure that our food safety laws keep pace with the revolution that is taking place in the way in which food is produced, stored and prepared.
The Government have made further progress in achieving a better balance between agricultural production and the environment notably through new powers to introduce nitrate sensitive areas and the introduction of new capital grants favouring the environment.
At the EC Council of Fisheries Ministers in December, the Government secured the best possible deal under the common fisheries policy for British fishermen consistent with conservation.
The outcome of the European Community's farm price review fully reflected the decision taken on stabilisers during the previous year leading to further downward pressure on prices and expenditure. The Community also reached agreement on the reviews of its regimes for beef and sheepmeat and of the provisions for farm structures.
The Government have maintained and reinforced our commitment to environmental protection both at the national and international level. Internationally, the Government have taken a leading part in efforts to respond to global problems such as ozone depletion and climate change. On 8 November at the United Nations I announced that £100 million of aid has been earmarked over the next three years to help preserve tropical forests. The Government's agreement with Brazil to provide help, especially for the rain forests was the first ever of its kind. Domestically, the Environmental Protection Bill has been introduced which provides for a system of integrated pollution control, reform of the law relating to the regulation of waste disposal, measures to deal with litter, and improvement of the existing system of air pollution control operated by local authorities.
The Water Act 1989 paved the way for the separation of the service and supply functions from the regulatory responsibilities within the water industry. A strong new environmental and economic regulatory framework is provided by two new public sector bodies—the National Rivers Authority and the Directorate General of Water Services. Privatisation has brought the prospect of a better-organised, more efficient industry and will enable the 10 new water service companies to use private sector resources to tackle their essential tasks. The Water Act, for the first time, makes it a specific criminal offence to supply water which is unfit for human consumption. Regulations 386W set strict new standards for drinking water quality which include, and in some cases go further than, the standards required by the EC drinking water directive.
The main provisions of the Housing Act 1988 were implemented during 1989; new private lettings were deregulated, housing association finance has been reformed to allow increased use of private money, powers had been provided to create housing action trusts, and council tenants have been given the right to choose a new landlord.
The Government established Scottish Homes as a vehicle for improving choice and quality in Scottish housing. Housing for Wales became fully operational in April. In both Wales and Scotland the Government launched the flexi-ownership scheme on an experimental basis to allow tenants to buy their homes at about the same outlay as their rent.
The Local Government and Housing Act 1989 reforms the law on local government capital and housing finance and permits improved targeting of public expenditure on the renovation of the housing stock in the public and private sectors. The Act also reinforces the rules on conduct of local authority business, gives local authorities new powers to promote economic development, and regulates their interests in companies.
During the year substantial progress was made in regenerating the inner cities. The Bristol development corporation was established at the start of the year. Private investment in all urban development corporation areas in 1989 exceeded £7.3 billion and city grant has attracted a further £1 billion to inner-city areas. The total Government commitment to the Action for Cities programmes, launched in March 1988, will be nearly £3.5 billion this financial year.
The Football Spectators Act 1989 was passed. It will provide the means to counter the menace of football hooliganism both at home and abroad. The new national football intelligence unit has been established.
The Government's commitment to the National Health Service has been firmly maintained. Resources have continued to expand. An additional £2.6 billion will be made available for 1990–91 representing a real terms increase of 5.5 per cent. More doctors and more nurses are working in the National Health Service and the number of patient treatments has continued to rise. The Government seek to use these resources more effectively and provide patients with even better services with the widest possible choice. Proposals have been put to Parliament for improving the management of health services and also to allow the growing numbers of elderly and physically and mentally disabled people to live in the community with appropriate support. Legislation was introduced to respond to scientific advance in embryology and the treatment of infertility.
In addition to launching the European Year of Information on Cancer last January, the Government have given support to a number of health promotion and prevention schemes. The Human Organ and Transplant Act 1989 prohibits commercial dealing with human organs for transplants and regulates the transplant of organs between persons who are not genetically related.
The Children Act 1989 provides a comprehensive reform of the law and court jurisdiction on the care and upbringing of children, family services and the protection of children from abuse.387W
The Government have continued to commit greater resources than ever before to social security. In 1989–90 spending will have been 3.2 per cent. higher in real terms than in the previous year, and over one third higher than in 1978–79. We have announced further increases in benefit rates from April 1990 which will bring expenditure on social security to over £1 billion a week for the first time ever, and give greater help to less well-off families, disabled people and carers.
The DSS computerisation programme—one of the largest in the world—is now being steadily introduced into local offices. This, together with the reform and simplification of benefits themselves, is bringing about important improvements in the service the DSS provides to the public. For example, clearance times for income support claims in 1988–89 were on average 22 per cent. better than those for its predecessor, supplementary benefit, in 1987–88.
The Government have continued to implement policies to improve all aspects of the education system in England and Wales and have made important progress in carrying through the provisions of the Education Reform Act 1988. In particular, the national curriculum has begun to be introduced together with arrangements for examinations and assessment in support of it. In higher education the new funding arrangements are beginning to promote greater efficiency and relevance to economic success.
The Government are continuing to create a climate in which the arts will flourish, supported by both the public and private sectors. The Government's three-year programme of funding has been reviewed and increased by 24 per cent. in the next three years. Commercial and individual sponsorship of the arts has continued to rise.
The number of police posts in England and Wales increased by 1,136 during the year, bringing the total to 126,574. The number of civilians supporting the police increased by around 1,300 to 43,600. These increases have been accompanied by action to ensure that the police use their resources effectively.
The Government introduced the Courts and Legal Services Bill to extend choice and improve services to the individual. It will help clients more often to have the advocate of their choice and it will hasten the conveyancing process.
The Government have given high priority to tackling drug misuse through measures to reduce both the supply of and the demand for drugs. Reciprocal agreements or arrangements to trace, freeze and confiscate the proceeds of drug trafficking have been concluded with eight further countries and we have introduced legislation to enable the United Kingdom to ratify the United Nations convention against the illicit traffic in drugs.
Legislation has been passed to strengthen the country's defences against terrorism, to reform section 2 of the Official Secrets Act 1911 and to place the Security Service on a statutory footing. New laws to enhance the controls over the use of firearms have been brought into force. The number of safer cities projects has increased from one to 12. Over £850,000 in grant aid has been approved to fund a number of crime prevention initiatives.
In 1989, work began on six new prison establishments which will provide over 3,000 additional places. Nearly £100 million was spent on major building work at existing establishments, including work on 11 new house blocks which will provide 1,100 new places early in 1990. A new prison for 350 inmates at Banstead in Surrey was brought 388W into use in only 18 months. Work also began on a seven-year programme which will provide integral sanitation in over 6,500 cells in existing establishments.
In Wales, the economy has continued to grow strongly. Inward investment has continued at a very high level with a number of major projects secured in 1989, including Toyota's £140 million engine plant at Deeside, and Bosch's £100 million project at Miskin. Output of the production and construction industries rose by 4.1 per cent. in the year to the second quarter of 1989. The Welsh Development Agency's budget for 1989–90 is the highest ever in real terms, enabling massive programmes of land reclamation and factory building. We have also announced a two-year extension of the highly successful valleys programme. All this has helped to bring about a fall in unemployment in the year to November 1989 of 30,500 (to 86,400) and 2.4 percentage points (to 6.9 per cent.).
Inward investment in Scotland continued strongly. Major investments in 1989 include an expansion by Compaq at Erskine and Stirling, Seiko Instrument's announcement to establish a manufacturing facility in Livingston and the development by Russell Corporation of its Livingston production centre.
In Northern Ireland the Government have continued their efforts to find an agreed basis on which greater responsibility can be devolved to the elected representatives of the people of the Province.
The security forces have continued with dedication and professionalism to combat terrorism in Northern Ireland within the rule of law. The Government have successfully completed a review of the workings of the Anglo-Irish Inter-governmental Conference.
A new Fair Employment Act was approved by Parliament and with it was established a Fair Employment Commission and a new Fair Employment Tribunal. The strong new powers now in force will ensure the basic right of all those in employment or seeking work to be treated fairly irrespective of the community from which they come.
Short Brothers and Harland and Wolff have been returned to the private sector.
The Education Reform (NI) Order 1989, which was recently approved by Parliament, provides for reform of the education system to improve standards and promote integrated education.
The Government announced their decision to support a new Northern Ireland Community Relations Council. This independent body will encourage and support those organisations working to improve relations between the different communities in Northern Ireland.
In foreign affairs, the historic changes now taking place in the Soviet Union and eastern Europe vindicate the policies of sure defence and strong support for human rights which the Government have consistently maintained. The Government have provided substantial financial and practical help for economic and political reform in eastern Europe, both bilaterally and through the European Community and have indeed taken a leading part in formulating Europe's response to these developments. The Government have also continued to give support to the reform policies of President Gorbachev, who paid a very successful visit to the United Kingdom in the course of the year.
At the same time, the Government have continued to assure Britain's sound defence, by maintaining the strength of our conventional forces and providing for the 389W modernisation of our independent nuclear deterrent with Trident. The Government played a full part in devising NATO's comprehensive concept for arms control and defence which was agreed at the NATO summit in May. We have also taken an active and constructive part in the negotiations for reductions in conventional forces in Europe and the elimination of chemical weapons.
Within the European Community, the Government have ensured that Britain remains a leading proponent of completion of the European single market by 1992, as well as being foremost among member states in implementing agreed single market directives.
Significant measures agreed in 1989 included the second banking directive and agreement on a merger control regulation. At the same time the Government have given enthusiastic support to implementation of the first phase of the Delors report on economic and monetary union, while representing strongly the concern felt in all parts of the House about some of the proposals for stages two and three, which would undermine the powers of national Parliaments.
The Government have taken an active part, too, in resolving international disputes. In particular we have contributed to the successful implementation of the United Nations plan for Namibia. We have used our influence to encourage peaceful change in South Africa, welcoming the steps which have already been taken by President De Klerk. The Government declared their full support for the action taken by the United States to enable the democratically elected Government of Panama to take office.
The Government have announced measures to reassure the people of Hong Kong about their future and to give them confidence to remain there. The Government have also worked for a durable and humane solution to the problem of Vietnamese boat people in Hong Kong, which recognises that for those who are not genuine refugees, there is no alternative to repatriation to Vietnam.
The Government have maintained a substantial and effective aid programme geared to the promotion of economic and social progress and the alleviation of poverty in developing countries. The Government have provided swift and generous humanitarian assistance and taken the lead in trying to resolve and respond to Ethiopia's problems. We have continued to provide widespread support for countries undergoing economic policy reform, especially in sub-Saharan Africa, including $100 million for programme aid in Nigeria. We have played a major role in the successful outcome of the ninth replenishment of the International Development Association and the Lomé IV renegotiation. We will be providing nearly £620 million for the former and some £1.3 billion for the latter, Britain's largest-ever single aid commitment.