PSBR: Latest Figures (Hansard, 9 March 1988)

§ The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara)
My Lords, in the first 10 months of 1987–88 there was a negative public sector borrowing requirement of £7 billion.

§ Lord Harmar-Nicholls
My Lords, does my noble friend think that that very satisfactory position will continue in the next 12 months or is the Budget too imminent for him to make a forecast?

§ Lord Brabazon of Tara
My Lords, there will be a new forecast for this current year for which we still await the figures for two months. It will be made in the Budget next Tuesday so there is not much more that I can say at this point.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the diminution in the public sector borrowing requirement has been compensated for many, many times over by an increase in private sector borrowing requirements? Is he further aware that that diminution has led to growing squalor in the public sector in terms of deficiencies in housing, the infrastructure, schools and so on, and that the increase in the latter has resulted in very considerable pressure on our balance of payments and has contributed to keeping interest rates high, which is gravely disadvantaging British industry?

§ Lord Brabazon of Tara
My Lords, I obviously do not accept what the noble Lord says. A low public sector borrowing requirement, even a negative public sector borrowing requirement is a sign that the economy is healthy and growing and that public finances are firmly under control. This year's public sector borrowing requirement is likely to be the lowest since the early 1950s, with the exception of one year 1969–70.

§ Lord Harmar-Nicholls
My Lords, is my noble friend aware that the sour grapes reaction of noble Lords opposite will not be shared by most people? They find this particular grape very sweet.

§ Lord Brabazon of Tara
My Lords, I can only agree with my noble friend.

§ Lord Cledwyn of Penrhos
My Lords, would the noble Lord not agree with my noble friend that high interest rates are disadvantageous to British industry?

§ Lord Brabazon of Tara
My Lords, it would appear from all the figures that have become available recently that British industry is doing rather well in the world at the moment.

§ Lord Cledwyn of Penrhos
My Lords, that does not answer my question. Would the noble Lord be good enough to say whether he agrees that the high interest rate is not advantageous to British industry?

§ Lord Brabazon of Tara
My Lords, as I said, British industry appears to be doing very well at the moment. It might well do better with lower interest rates, but on the other hand we have to keep control of inflation, which is just as important to industry as interest rates.

§ Lord Glenamara
My Lords, is the noble Lord aware that in the city of Newcastle-upon-Tyne the local authority is currently sacking 150 teachers, and a negative borrowing requirement has been achieved by a multiplicity of economies of that kind throughout the country?

§ Lord Brabazon of Tara
My Lords, it is important that public sector expenditure should be firmly under control if we are to have a healthy and growing economy. If the local authority cannot find better ways of saving money than sacking teachers, it is unfortunate.

§ Lord Dormand of Easington
My Lords, in view of the somersault in the Government's economic policy, how much importance do they place on M3 as an indicator of money supply?

§ Lord Brabazon of Tara
My Lords, we are tending to stray rather far from the Question on the Order Paper. I have no doubt that if the noble Lord will be patient until next Tuesday my right honourable friend the Chancellor of the Exchequer in his Budget speech will no doubt answer many of the questions which have been posed.

Lord Bruce of Donington
My Lords, is it not the case that it is not my noble friend who has strayed but it is the Prime Minister who has strayed from her Chancellor of the Exchequer?

§ Lord Brabazon of Tara
My Lords, I would not accept that. But I must say that that question also strays somewhat from the Question on the Order Paper, which concerns the size of the public sector borrowing requirement for this year.

§ Lord Mackie of Benshie
My Lords, can the Minister indicate to us any connection between the decline in the public sector borrowing requirement and the rise in the deficit of the balance of payments?

§ Lord Brabazon of Tara
My Lords, I do not think that there is a connection between the two. The important point is that, unlike certain major countries in the world which have not only a public sector deficit but also a large balance of payments crisis, we have only an unfavourable balance of payments at the moment.

§ Lord Leatherland
My Lords, so that we can get a full picture of the situation, will the Minister tell us how many million people are now unemployed?

§ Lord Brabazon of Tara
My Lords, that strays even further from the Question on the Order Paper than some of the previous questions.