Review of Economy – 2 May 1997

Below is Mr Major’s account, from his book, John Major – The Autobiography, relating to the status of the economy.

JOHN MAJOR:

As I left office the figures told the story of the fall and rise of the economy. On the day I became Prime Minister the tax burden was 36.3%.

On 1st May 1997 it was 36.6%, which, over the span, puts our tax record in a proper perspective. During my premiership interest rates fell from 14% to 6%; unemployment was at 1.75 million when I took office, and at 1.6 million and falling on my departure; and the government’s annual borrowing rose from £0.5 billion to nearly £46 billion at its peak before falling to £1 billion. The economy was growing by only around 0.5% in 1990, shrinking by 1.5% in 1991 before recovering to grow by 3.5% in 1997. During the depths of the recession I inherited, all the economic indicators worsened, but they had all been corrected by May 1997. Above all, we had broken the inflationary psychology that has so bedevilled our economy. In November, the rate of inflation was 9.7%. In May 1997 it was 2.6%. It was a fine legacy.