HC Deb 21 June 1979 vol 968 cc1486-8
9. Mr. Jim Marshall

asked the Chancellor of the Exchequer what is the latest estimate for the public sector borrowing requirement.

12. Mr. Cryer

asked the Chancellor of the Exchequer what is his forecast of the public sector borrowing requirement for 1979–80.

Mr. Biffen

I refer the hon. Members to my right hon. and learned Friend's Budget Statement.

Mr. Marshall

Will the right hon. Gentleman refer to the article written by his hon. Friend the Financial Secretary headed: The Economic Perils of Thinking for the Moment in which I presume the economic policies of the Government are outlined? Is he aware that one of the basic aims put forward in that article is the introduction of a long-term stabilisation programme to defeat inflation and increase public confidence? Can he outline to the House and the country how that proposed scenario fits in with rip-roaring inflation, increasing unemployment, an increasing balance of payments deficit and zero economic growth?

Mr. Biffen

I always pay the closest attention to the views of my hon. Friend the Financial Secretary, certainly to his thinking on long-term economic matters. The public sector borrowing requirement is the centrepiece of the Government's economic policy. We attach the greatest importance to its being reduced from 5½ per cent., expressed as the gross domestic product last year, to 4½ per cent. for the gross domestic product for the year in question. We regard that as being a major part of our attack upon inflation.

Mr. Cryer

Does the right hon. Gentleman agree that there will be much hardship as a result of this attempt to cut the PSBR by a savage attack on public expenditure, upon which the Government are about to embark? Would it not be more meaningful if the Government were determined to tax the big multinational corporations properly and so get their yield of corporation tax nearer to the level of income tax yield, at around £20 billion per annum? Does he not agree further that if cuts in public expenditure are required anywhere, our contribution to the Common Market could be one likely area? Will he also contemplate a savage cut in the amount of money spent on defence, which reaches almost £10 billion?

Mr. Biffen

We have always made it clear that we understand that there will be severe strain involved in the public expenditure cuts that have been presented to the House, both at the time of the Budget and in the Gracious Speech. There is no disposition on the Government Benches towards heavier corporate taxation. We believe that a revival of profitability in the private sector is essen- tial to national economic regeneration. My right hon. and learned Friend the Chancellor has made the most robust speeches about the necessity of reducing Britain's net contribution to the European Community. To deal with the hon. Gentleman's fourth point, we have made it clear, and we are happy to stand by our declaration, that we believe that this country's defences need restoring rather than further undermining.

Mr. Speaker

Order. I hope that Ministers will not feel obliged to answer four supplementary questions in future, because they should not be asked in the first place. One supplementary question is the custom in the House, and it is unfair to other hon. Members for an hon. Member to push in questions which amount to his making a speech.

Mr. Emery

Will my right hon. Friend tell the House what policy the Government have decided upon to control foreign borrowing by nationalised industries? Has any directive been given on this, or do the Government wish to encourage a further amount of that type of borrowing?

Mr. Biffen

No directive has been issued.

Mr. Mike Thomas

Is the right hon. Gentleman aware of the impact the cuts in the PSBR will have on the low paid? Is he aware further that, on the strength of answers given to me by the Financial Secretary to the Treasury, the taxpayer with £2,000 taxable a year will be better off by less than 5p a week as a result of the last Budget? Does the right hon. Gentleman realise that when we take into account increases in council rents and in mortgage repayments, such a person will be worse off while his standard of living will be cut as a result of the cuts in public expenditure?

Mr. Biffen

It is easy to make the assertion that the standard of living of the lower paid is being cut as a result of the public expenditure cuts, but I have seen no evidence to sustain that assertion