§ 12. Mr. Richard Wainwrightasked the Chancellor of the Exchequer by how much the annual cost of servicing the national debt in 1980–81 has changed as a percentage of the cost in 1978–79.
§ Mr. BrittanThere has been an increase of about 55 per cent, in money terms on the 1978–79 outturn of £6,458 million. In real terms, the increase is 12 per cent.
§ Mr. WainwrightDoes the Chief Secretary realise that that large and rapid increase in the burden of servicing the national debt puts a wholly unjustified burden on the economy, and that generations well into the next century will be paying the cost of this perverse policy on interest rates? What will he do to reverse it?
§ Mr. BrittanMy right hon. and learned Friend answered questions about interest rates. On the subject of the national debt, it is of course our intention gradually to reduce the size of the borrowing requirement, and that will have the effect of containing the growth in the total national debt.
§ Mr. DorrellDoes my right hon. and learned Friend recognise that the current cost of servicing the national debt could be significantly reduced if we continued the policy that we have already initiated of issuing Government debt instruments the capital value of which is index linked?
§ Mr. BrittanI appreciate that my hon. Friend has long supported that proposal.
§ Mr. StrawWhile the Chief Secretary is being re-educated in the facts of economic life by his hon. Friend the Member for Bath (Mr. Patten) and others, will he bear in mind that scaremongering about the size of the public sector debt, part of the Conservative attack on the Welfare State, has not only made financing of the public sector more difficult, but bears little relationship to the facts, and that, as a percentage of gross domestic product, this year's public sector borrowing requirement will still be at 6 per cent, historically? I accept that that is not as high as in previous years. Will he bear in mind, too, that the real value of the national debt, far from increasing, has declined by one-third since 1966.
§ Mr. BrittanI do not entirely accept that suggestion. The cost of servicing the national debt has risen considerably. There is a burden, and I do not think that any useful purpose is served by seeking to denounce it.
§ Sir William ClarkDoes not my right hon. and learned Friend agree that, up to 1974, the national debt had been in operation for about 300 years, and that the last Labour Government doubled it in five years?
§ Mr. BrittanIt is right to say that between 1973–74 and 1978–79, the cost of servicing the national debt rose in real terms by 30.5 per cent.