§ 1. Mr. Hugh Bayley (City of York)What was the average central Government public sector borrowing requirement per household in the United Kingdom per year for (a) 1992 to 1997 and (b) 1997–98. [41672]
§ The Chief Secretary to the Treasury (Mr. Alistair Darling)Over the years 1992–93 to 1996–97, the previous Government's borrowing averaged £1,500 per household. In 1997–98, under this Government, borrowing has averaged just £50 per household.
§ Mr. BayleyMay I remind the Chief Secretary of the pledge card, which promised that a Labour Government would set tough rules for Government borrowing and spending, and congratulate the Treasury on a pledge well kept? Borrowing at £1,500 per household per year over five years goes way beyond that necessary for the financial cycle. Does he agree that such borrowing under the Conservatives was deferred taxation, so when they were in power we had not only higher taxes, but higher deferred taxation?
§ Mr. DarlingMy hon. Friend is right. The previous Government made a catastrophic misjudgment in the late 1980s when they misread the economic signals, and the economic miracle about which they used to boast became an economic disaster only two years later. That is a reason why borrowing averaged £1,500 per household in the previous Parliament.
In contrast, as my hon. Friend said, we made it clear that we would run public finances prudently. We have reduced borrowing, which now averages about £50 per household and, at the same time, have been able to redirect resources, because of tight control of public spending, into our priority areas—education and health. 1086 He is right to draw attention to the promises that we made at the last election, and we shall deliver each and every one by the end of this Parliament.
§ Sir Sydney Chapman (Chipping Barnet)If in, say, two years, the right hon. Gentleman perchance found that revenue exceeded expenditure, which was the case in two successive years under the previous Conservative Government, would he use the surplus to increase public expenditure or to reduce the PSBR?
§ Mr. DarlingWhat matters is what happens over the economic cycle, as the hon. Gentleman should know. We have made it clear that we are conducting economic affairs in such a way as to achieve long-term economic stability—something which the previous Government were, unfortunately, never able to deliver.
§ Mr. Derek Foster (Bishop Auckland)May I congratulate my right hon. Friend on getting borrowing and spending under control? However, I invite him to look again at the PSBR regulations, especially to allow the Post Office to borrow to invest, to enhance its competitiveness. At the same time, he may consider Newcastle airport, which also longs to borrow to invest, to enhance its competitiveness in the northern region.
§ Mr. DarlingI am grateful to my right hon. Friend for his kind remarks. Although the Government always keep the PSBR under review—indeed, we consider it almost every day, for various reasons—people must bear in mind the fact that borrowing is still borrowing and has to be paid for, no matter how it is classified. There is no easy solution to the problems to which he refers. Borrowing has to be serviced, and the Government must have regard to public exposure to borrowing, whether it is directly under the control of the Government or incurred by bodies over which we have less direct control, but for which we are, none the less, responsible.
§ Mr. Malcolm Bruce (Gordon)Does not the improved borrowing over which the Chief Secretary has presided make it rather absurd for the Government to continue to maintain under-investment in public services, and does it not place them in the embarrassing position of not fulfilling their pledges and causing the situation to deteriorate? When the right hon. Gentleman completes the comprehensive spending review, will he accept that, to deal with the crisis in the public services, he will have to find money for the current year as well as for the three following years?
§ Mr. DarlingYes, we are moving towards the conclusion of our spending review. The hon. Gentleman should review his policies on taxation and spending. I have noticed over the past week that he is in favour of as much spending as possible on just about everything that he can get round to naming, but against any measure of taxation to pay for that spending. A policy of tax and spend is a statable case, but a policy of spend and spend without any means to pay for it is incredible. That is why the hon. Gentleman's party has no credibility whatever on those matters. I remind him that, this year, because we have strictly controlled public spending, we are not only reducing borrowing, but have been able to make £2.5 billion available for education and more than 1087 £2 billion available for the health service. Those amounts would not have been available but for the change of Government. I suggest to the hon. Gentleman, in the nicest possible way, that he reflects on his own policies rather than complaining about ours, which are doing what the country wants to get sustainable long-term stability and good public services that we can afford.