HC Deb 13 December 1984 vol 69 cc1193-4
3. Mr. Yeo

asked the Chancellor of the Exchequer what is the most recent estimate for the public sector borrowing requirement for 1984–85.

12. Mr. Leigh

asked the Chancellor of the Exchequer if he will make a statement on the public sector borrowing requirement.

Mr. Peter Rees

The PSBR for 1984–85 is projected at around £8½ billion.

Mr. Yeo

Does my right hon. and learned Friend agree that the effect of the coal strike this year has been to increase the public sector borrowing requirement and, therefore, that the consequence of Arthur Scargill has been to reduce the scope for job-creating tax and national insurance cuts in next year's Budget?

Mr. Rees

My hon. Friend is absolutely right. The coal strike has made a very considerable difference, in that it may add, over the financial year as a whole, about £1½ billion to total borrowing.

Mr. Leigh

Does my right hon. and learned Friend agree with the wise words of my right hon. Friend the Member for Hertsmere (Mr. Parkinson) in the debate on the autumn statement last week, to the effect that losing control of the PSBR in a vain attempt to create jobs would be to fail to address the fundamental cause of our problem, which is not shortage of demand, but failure to meet it? That would be a cruel deception on the unemployed, as President Mitterrand found to his cost.

Mr. Rees

My hon. Friend is absolutely right. The only way to create sustained long-lasting jobs is to contain inflation, which is a principal strand in the Government's policies.

Mr. Robert C. Brown

How much will have to be added to the PSBR as a result of the abolition of the GLC?

Mr. Rees

Nothing.

Mr. Skinner

Will the right hon. and learned Gentleman confirm that since the coal strike began orders for more than £1,000 million have had to be laid before Parliament to finance the deficit of the NCB and that there is the prospect that an order for more than £600 million will be laid before Parliament? Does he accept the Chancellor's view that the strike was a worthwhile investment, given that some of his own Back Benchers now refuse to support those orders? Why will the Government not admit that they have caused the economy to run down as a result of the miners' strike and have kept the strike going because they would not negotiate and wanted MacGregor to smash the NUM?

Mr. Rees

The hon. Gentleman has entirely misquoted my right hon. Friend the Chancellor. My right hon. Friend never said that the miners' strike was a good investment —[Interruption] He said that the restructuring of the coal industry was a worthwhile investment, and any hon. Member who cares about the long-term future of this country's coal industry should adopt that point of view.

Mr. Robert Atkins

What detrimental effects would there be for the PSBR if finance were made available to ensure that certain major contracts to sell aircraft abroad did not make a loss? Does my right hon. and learned Friend recognise that the creation and containment of jobs that would result from making such finance available would more than offset any potential losses to the PSBR?

Mr. Rees

I assume that my hon. Friend is referring to the exposure of the Export Credits Guarantee Department. He will know that, in the current state of the world market, that exposure is considerable. He will also know that the ECGD covers a range of Airbus orders. It may even have a favourable impact in my hon. Friend's constituency.

Mr. Dalyell

What is the Treasury's latest price tag for the Falklands?

Mr. Rees

It will not add to the public sector borrowing requirement this year, which was the original question put to me.