asked the Chancellor of the Exchequer on what evidence he bases his view that an excessive public sector borrowing requirement is wholly or largely responsible for inflation, having regard to his reply to the hon. Member for Grimsby on 27 November that his Department has not calculated what the public sector borrowing requirement would be in a state of full employment.

For a given level of activity, the higher the PSBR in any year, the more difficult it is to control monetary growth without high interest rates. This is true whatever is the difference between the actual PSBR and what it would be in any given state of employment.