Public Sector Borrowing Requirement (Hansard, 2 July 1981)

§ 15. Mr. Latham
asked the Chancellor of the Exchequer whether he will make a statement on the progress made since 10 March in bringing down the public sector borrowing requirement.

§ Mr. Brittan
The strategy for reducing the PSBR was set out in the Financial Statement and Budget Report and is being implemented, for example, in the Finance Bill.

§ Mr. Latham
Will my right hon. and learned Friend confirm that it will be an important part of the half-yearly review under the Industry Act later this year to ensure that the increased taxes in the Budget really have reduced the PSBR?

§ Mr. Brittan
Certainly that is something which must be kept under review.

§ Mr. Cryer
What does the Minister say to the charge that the public expenditure cuts are creating massive unemployment, which a former distinguished Prime Minister has said is breeding race hatred and crime? Will he explain what kind of improved life the people of this nation will face at the end of what that former distinguished Prime Minister described as these incomprehensible policies?

§ Mr. Brittan
I do not believe that expenditure cuts are the cause of unemployment. The cause of unemployment is twofold. First, it is the world recession. Secondly, it is due to the fact that over a very long period we as a nation have paid ourselves more than we have earned. As for the future, I believe that the restoration of our economy on a sound basis will provide the opportunity for advance and the provision of jobs, which will be secure. It seems to me that that is much more ground for hope than to continue to spend money propping up inefficient industry.

§ Mr. Eggar
How big a reduction in the PSBR can we expect as a result of the privatisation of BNOC and other measures?

§ Mr. Brittan
It is not possible to give an estimate at this stage.

§ Mr. Skinner
Is the Minister aware that the PSBR is composed almost entirely of all the money used for dole 1001 payments, redundancy payments and so on? A member of the present Cabinet indeed suggested that when there were 1.6 million unemployed the total amount of money spent on those matters was as much as £7 billion, so it must be nearly £15 billion now. One of the best ways to reduce the PSBR—

§ Mr. Speaker
Order. The hon. Gentleman must ask a question.

§ Mr. Skinner
One of the best possible ways to—[Interruption]—reduce the PSBR—

§ Mr. Speaker
Order. I think that that is the hon. Gentleman's way of asking a question. But he must try to get a question into it.

§ Mr. Skinner
Will the Minister confirm that one of the first ways of reducing the PSBR is to initiate a massive public works programme on the railways, the sewers and canals, and to introduce a 35-hour week without loss of pay, longer holidays, earlier retirement and measures of that kind which will—

§ Mr. Speaker
Order. That is enough to get on with.

§ Mr. Brittan
I can think of no more certain way to bring about economic disaster, if not collapse, than to carry out the policy recommended by the hon. Gentleman. He will recall that somebody who is not unsympathetic to the cause of general reflation estimated that if £4,000 million were spent on reflating the economy the effect would be to reduce unemployment by only 100,000, without taking into account the extremely dangerous consequences for interest rates and our monetary policy that such a policy would entail.