HC Deb 29 November 1973 vol 865 cc566-7
5. Mr. Horam

asked the Chancellor of the Exchequer what is the present level of the Government's borrowing requirement.

Mr. Barber

The central Government's borrowing requirement in the first seven months of this financial year was about £1,000 million. Details are published in Financial Statistics.

Mr. Horam

How does that figure which is still running at an annual rate of well over £2,000 million, and more like £3,000 million, square with the commitment to fight inflation?

Mr. Barber

As I have pointed out before, the Government are running a substantial surplus on our current account. I do not believe that it is right as a principle or in present circumstances that all capital expenditure as well as current expenditure should be covered by taxation. In fact, nearly half of public expenditure capital expenditure is covered not by borrowing but by taxation.

Mr. Healey

Can the Chancellor confirm that the reason why the borrowing requirement appears to be running below the level he predicted in his Budget Statement this year is, first, that people who have enjoyed no increase in their real earnings have been compelled by inflation to pay at least £800 million more in tax and, secondly, that the Government's policies have led to shortages of manpower, materials and money, which have meant the collapse of the public building programme?

Mr. Barber

I am not sure whether the right hon. Gentleman is referring to the central Government's borrowing requirement, with which the Question is concerned, or to the public sector borrowing requirement. As to the financing of the borrowing requirement, so far this year we have had considerable success in selling debt outside the banking system.