Fund Raising

HC Deb 16 December 1976 vol 922 cc1707-9

4. Mr. Viggers

asked the Chancellor of the Exchequer whether he is satisfied with the current operation of Her Majesty's Government's fund-raising systems.

Mr. Healey

These systems have functioned well in recent months, but I am always ready to consider constructive suggestions for improvements.

Mr. Viggers

Does not the right hon. Gentleman accept that the short-term arrangements with the United States and Germany and the sale of BP shares show that the Government's creditworthiness is fraying at the knees? What other lines of credit are open to him? Will he have to flog off something else? Is he aware that he will not get much for his conscience?

Mr. Healey

I can understand the hon. Gentleman's chagrin, but if he had read the full text of the statement by the United States Secretary to the Treasury, the statement yesterday by Dr. Witteveen and the full-hearted endorsement of our general strategy and of yesterday's measures which has now been given by spokesmen of all the strongest economies in the world and by the world's leading monetary authority, he would be less flexible in casting doubt on the United Kingdom's creditworthiness.

Mr. George Rodgers

Is my right hon. Friend aware that in Japan the Government raise about 35 per cent. of their total revenue by corporation tax and spend less than 1 per cent. of their resources on defence? In view of that evidence and the success of the Japanese economy, will he review his current strategy?

Mr. Healey

I am always ready to see what I can learn on behalf of Britain from the experience of other countries. I only wish that we could adopt some of the habits which are current in the economic field in Japan—particularly the very high level of productivity achieved from the same capital equipment as is possessed by many British firms in similar sectors. I will, of course, consider what my hon. Friend has said and see whether it has any lessons for us.

Mr. Budgen

In view of the Chancellor's announcement of enormous public sector borrowing requirements for the next two years, has he any plans for any further borrowings from abroad? If he has no such plans, does he intend to balance the Budget in the foreseeable future?

Mr. Healey

All countries recognise that a certain amount of Government borrowing for capital purposes is very sensible, even in conditions of full capacity use and full employment. I would certainly believe that that was right for the United Kingdom too. When the hon. Gentleman talks about an enormous PSBR, he is perhaps not aware that even at this time our borrowing requirement is lower than the equivalent in Western Germany, which is so often held up to us as a model. In the next two years the PSBR will be only 6 per cent. and 5¼ per cent. of GDP, which is very reasonable by any international standards and was recognised as such yesterday by all the leading financial authorities in Washington.

Sir G. Howe

Will the right hon. Gentleman recollect that month after month he has been telling the House that his policies had the massive endorsement of monetary authorities around the world and that month after month he has been comparing his borrowing requirement with that of other countries, with a sense of complacency? Will he understand that the people of this country are still concerned at his failure to make the real changes that are necessary to give real people in this country the prospect of incentives to work and to succeed by getting down direct tax rates? Is he aware that we are sick and tired of comparative statistics and endorsements from people outside this country and that the people want to see real changes designed to give real people a chance of succeeding in future?

Mr. Healey

Perhaps I have met as many real people as has the right hon. and learned Gentleman. I understand very well—I have noticed it repeatedly—that he suffers from nausea and exhaustion. The plain fact is, however, that we have arranged a massive shift of resources in favour of British industry. That has been recognised over the months by the CBI, which, I think, represents British industry rather better than the right hon. and learned Gentleman does, and which also endorsed the measures announced yesterday.