HC Deb 21 June 1979 vol 968 cc1479-80
2. Mr. David Price

asked the Chancellor of the Exchequer what was the increase in the National Debt between April 1974 and April 1979; and what is the annual cost of servicing that debt.

The Chief Secretary to the Treasury (Mr. John Biffen)

Between 31 March 1974 and 31 March 1979, the outstanding National Debt increased by some £46,526 million. The cost of servicing the outstanding National Debt in the last financial year, 1978–79, was £6,458 million. For the current year, 1979–80, the cost is estimated to be £8,150 million.

Mr. Price

Would my right hon. Friend care to indicate what the servicing of that enormous debt means in terms of taxation? Does he not agree that it comes to more than the whole of the cost of income tax and the consequential tax which might be called the Healey head tax and must be ranked along with scutage, Morton's fork, ship money and the window tax as some of the more outrageous impositions placed by bad or evil British Governments upon the people of this benighted country?

Mr. Biffen

If I may be a little more prosaic in answer to my hon. Friend, it is true that the servicing figure of £8,150 million exceeds what is now spent on health and nearly matches what is spent on education.

Mr. Cormack

If it had not been for the financial incontinence of the previous Chancellor, by how much could VAT have been reduced?

Mr. Biffen

That depends upon the incontinence.

Mr. Robert Sheldon

Given that the cost of servicing the debt is so high, is it not true that the 14 per cent. minimum lending rate will not reduce the cost of servicing that debt? Will the Chief Secretary comment on views held in financial circles in this country and elsewhere that the 14 per cent. minimum lending rate is not likely to be the rate for a few weeks but could be the rate for a few months or even longer?

Mr. Biffen

As the right hon. Gentleman knows, no one from this Dispatch Box will postulate when expected changes shall take place in minimum lending rate. He should also know that a 14 per cent. minimum lending rate was a necessity arising from our poisoned inheritance from the previous Administration.