HC Deb 12 March 1998 vol 308 cc740-1
7. Dr. Gibson

What plans he has to restructure the public sector borrowing requirement in relation to European monetary policy. [32499]

The Economic Secretary to the Treasury (Mrs. Helen Liddell)

The Government have no plans to restructure the public sector borrowing requirement in relation to European monetary policy. The Government's deficit reduction plan is in Britain's interest whether or not we participate in economic and monetary union.

Dr. Gibson

I thank the Minister for that answer, but does she accept that many of my constituents consider it wrong that investment in Norwich City airport suffers and is curtailed as a result of the local government capital control legislation, whereas Stansted is not disadvantaged? Does she think it is time to review that, and that the European budgetary union conventions are a way forward?

Mrs. Liddell

I congratulate my hon. Friend on the concern that he has consistently expressed about his local airport. I am happy to write to him on the specific matter relating to Norwich City airport.

However, any borrowing has to be paid for at some time, and the previous Government allowed public expenditure to get out of control. We now spend more on paying our debts than on our education system. When the Chancellor introduced his Budget last July, he made it plain that we will seek to reduce our deficit, with a view to moving into surplus in the medium term.

Sir Michael Spicer

Never mind European monetary policy; does the hon. Lady agree that it is the Government's duty to apply policies that are in the interests of this country? Having established that the overriding objective of the Bank of England is 2.5 per cent. inflation, will she confirm that the PSBR, fiscal policy and all other economic policies will comply with that overriding policy?

Mrs. Liddell

Fiscal policy is the responsibility of the Government, as the hon. Gentleman should realise. It is interesting that he says, "Never mind European monetary policy." He should take into account the fact that the Labour Government have taken measures since we were elected last May to improve this country's finances. Indeed, as my right hon. Friend the Chief Secretary pointed out, the moves that we made in relation to the Monetary Policy Committee have resulted in the lowest long-term interest rates for 33 years, and, if I may say so, I was still in primary school 33 years ago as well.