§ 2. Mr. Wainwrightasked the Chancellor of the Exchequer to what extent the trend of public debt interest is higher than his forecast of March.
§ The Chancellor of the Exchequer (Mr. Nigel Lawson)"The Autumn Statement 1984" gives estimated figures for debt interest in 1984–85 and 1985–86 which are respectively about £½ billion and £1 billion above previous estimates.
§ Mr. WainwrightAs the Chancellor of the Exchequer has referred not only to the autumn uprating of the current debt estimate but to the estimate for 1985–86, which is stretching a long way ahead, how does he explain his recent statement that the prospect is of further interest rate cuts? Will the right hon. Gentleman say something about interest rates to reassure British industry?
§ Mr. LawsonI can deal with the hon. Gentleman's puzzlement quite simply. The increase in the estimates to which I referred is an increase over what was envisaged at the the time of the last Budget. When I say that I now see a prospect of interest rates falling, I am talking about falling from their present levels. I am glad to say that that prospect remains as a result of this Government's policies.
§ Sir William ClarkDoes my right hon. Friend agree that as the national debt increases year by year because of overspending, interest charges will obviously increase? As the interest payments on the national debt are now more than £45 million per day, would it not be folly to increase our public expenditure now?
§ Mr. LawsonMy hon. Friend is quite right. It would be folly to increase public expenditure now, and that is 781 why the Government have no intention of doing so. It is a quite remarkable fact that, despite the miners' strike and the events in the United States, where interest rates have risen sharply, the level of interest rates in Britain is no higher than it was at the time of the last general election, and is set to go lower.