HL Deb 14 December 1982 vol 437 cc474-5

2.45 p.m.

Lord Beswick

My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is their estimate of the amount of money which will be realised by the end of the 1982–83 financial year by the sale of shares of public sector concerns; what proportion of this will be retained by those concerns and what proportion will be taken by the Treasury.

Lord Glenarthur

My Lords, receipts sales of public sector concerns which have already been completed will amount to £819 million by the end of the financial year 1982–83, net of all expenses. Three-quarters of those proceeds have been retained by the Exchequer.

Lord Beswick

My Lords, while thanking again the noble Lord, Lord Glenarthur, for his reply, would he not agree that if that very large sum of money realised by the sale of public assets is used by the Government to reduce taxes prior to the next general election it will be both morally wrong and economically damaging?

Lord Glenarthur

My Lords, the receipts have simply gone towards reducing the public sector borrowing requirement.

Lord Kaldor

My Lords, will the noble Lord agree that a reduction of the public sector borrowing requirement is only of economic benefit if it represents a reduction of the taxation out of income, current expenditure or capital expenditure? It is of no benefit whatever if it simply represents capital transfers and then the money is used in substitution for taxes, which do have an effect on effective demand.

Lord Glenarthur

My Lords, the cash that results from these sales is of course welcome in the form of any future relief both to the public sector borrowing requirement and the taxpayer, but the benefits go wider than that. The organisations concerned will be fully subject to the operation of market forces, which will provide by far the best incentive to improved efficiency and the better allocation of resources.

Lord Beswick

My Lords, if it is the case that the great need is to reduce the public sector borrowing requirement, is it not a fact that the Prime Minister wrote to the chairmen of the public sector industries only a few weeks ago asking them to increase capital expenditure?

Lord Glenarthur

My Lords, I am not aware of that particular letter, but I shall certainly look into it.

Lord Byers

My Lords, has the noble Lord not been following the debates in this House in which so many of us have been asking for more effective demand in order to increase the order books of British industry? This is the heart of the argument.

Lord Glenarthur

My Lords, I have been doing so, and I am sure that my right honourable friend will take note of what has been said, including what the noble Lord has said.