HC Deb 12 July 1984 vol 63 cc1350-1
11. Mr. Gould

asked the Chancellor of the Exchequer what has been the extent of over-funding, defined as the extent to which the rate of gilts has exceeded the levels necessary to finance the Government's borrowing requirement over the last three months for which figures are available.

Mr. Ian Stewart

None, Sir.

Mr. Gould

Does the failure to fund the borrowing requirement during the past three months signify a welcome conversion of the Treasury to a more relaxed monetary policy, or is it yet another instance of the Chancellor and the money markets being at cross purposes? If the latter, when must we expect the inevitable emergence of another Budget, which will impose further cuts on public expenditure?

Mr. Stewart

It is neither of those two things. I am sure that the hon. Gentleman, who is a student of these matters, will know that the PSBR is very heavily front-end loaded this year for normal seasonal reasons, but more particularly because of the withdrawal of postponed accounting for VAT on imports in the autumn. Were the Government to overfund the full extent of the PSBR in the early months of this year, it would produce very heavy distortions in money markets.

Mr. Allan Rogers

Will the Economic Secretary take the opportunity—if not now, later—to correct two statements made by his right hon. Friend the Chancellor of the Exchequer when he misled the House earlier during Question Time?

Mr. Speaker

Order. The question must relate to this particular question, not to previous ones.