HC Deb 13 May 1982 vol 23 cc935-6
7. Mr. Cunliffe

asked the Chancellor of the Exchequer at what stage in each financial year he has available to him outturn figures for the public sector borrowing requirement in the previous year.

Mr. Brittan

As a result of faster reporting by public corporations and local authorities, we now receive provisional figures for the total PSBR within three weeks of the end of the financial year which are sufficiently firm to justify publication.

Mr. Cunliffe

In view of the enormous margin of error in the PSBR, was it not absurd of the Chancellor to force so many cuts in public spending last year when, in pursuit of his target, he is nearly £2,000 million off beam?

Mr. Brittan

I do not agree. Of course there is a problem of getting the figure right when one is talking about a total calculation of £150 billion. I do not believe that we, any more than other countries, can ignore the importance of the level of public borrowing, however difficult it is to predict it with absolute accuracy.

Mr. Horam

I return to what was said by the hon. Member for Loughborough (Mr. Dorrell) on an earlier question, namely, that what industry needs now is an injection of extra demand. That could come from an increase in capital expenditure by the Government. Now that we have better figures for the PSBR, why do the Government continue their over-rigid attitude to financial matters? Does that not show again how little they understand the real needs of industry?

Mr. Brittan

The revised figure that we announced was good news, not bad news. The fact that interest rates in this country are falling at a time when they remain level overseas is in no small way related to the level of borrowing. The reduction in interest rates is one of the most important ways to help industry in its revival. Therefore I am not at all sure that a change of course that would make it more difficult for interest rates to fall would be beneficial to recovery.

Mr. Higgins

Did the Bank of England fund on the basis of the original estimates for the PSBR and set interest rates accordingly?

Mr. Brittan

That question cannot be answered from the Dispatch Box, because questions of timing, as well as the simple point that my right hon. Friend mentioned, are involved.

Mr. Joel Barnett

Why, in monitoring public expenditure, did not the Chief Secretary disclose the large margin of error in 1981–82 until after the Budget?

Mr. Brittan

The right hon. Gentleman will know from his experience that monitoring is not such as always to disclose the figures. I am as concerned as he is about why so large a change came about in such a short time. I am looking into the matter, and share his conncern about it.