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Borrowing Requirement

Volume 893: debated on Thursday 12 June 1975

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13.

asked the Chancellor of the Exchequer what is his latest estimate for the borrowing requirement for 1975–76.

22.

asked the Chancellor of the Exchequer what change there has been in the public sector borrowing requirement since his Budget Statement.

It is not customary to give forecasts of public sector borrowing except at Budget time.

Is the Minister aware that the borrowing requirement is thought to be at the heart of our economic problem in relation both to inflation and to the worsening balance of trade? Will he deny implications that the borrowing requirement has risen even in the two months since the Budget? It he were able to make such a statement, it would have a good effect on confidence in our currency.

If the hon. Gentleman is referring to an article in The Times Business News the other day, my view is that one cannot base on two months' figures the implications which the article made. As for the borrowing requirement being at the centre of our problems, my right hon. Friend has placed great emphasis on the fact that it should be brought down. There are many other aspects of our problems to be considered.

Will the Minister give an assurance that if the public sector borrowing requirement goes above the estimate which the Chancellor originally put forward in his Budget estimate—whether as a result of changes in Government policies or inflation through wage settlements beyond the assumptions made when the borrowing requirements were drawn up—the Chancellor will bring before the House proposals to cut back public expenditure borrowing requirements to the original estimate?

My right hon. Friend has already indicated his intentions in respect of public expenditure in the past year and the cuts which he intends to make in the increase in the rate of public expenditure. He has also indicated on many occasions, as, indeed, all Chancellors do, that from time to time he will take whatever measures are required.

Will the Minister refute the suggestion made by his right hon. Friend that the public sector deficit in Germany is the same as in this country, since in Germany it is a much smaller proportion of the gross national product than is the case in the United Kingdom? What steps do the Government intend to take to deal with the juggernaut of public service expenditure here, arising largely from the so-called reorganisation of local government and the National Health Service under the Conservative Government? What do the Government intend to do about that expenditure, whose main components are wages and salaries?

There has been an increase in the borrowing requirement in Germany. On the question of local government expenditure, the hon. Gentleman knows of the existence of the council, under the chairmanship of the Secretary of State for the Environment, which has been set up to discuss these matters.