§ Mr. Gouldasked the Chancellor of the Exchequer what evidence there is that the public sector deficit (a) cannot be financed from real resources or (b) can be financed only by pre-empting resources which are needed by private investors in manufacturing industry.
§ Mr. Denzil DaviesThe size of the public sector deficit which can be accommodated without undue pressure on real resources, and without pre-empting available savings needed in productive industry is bound to vary over time as domestic and external economic conditions change. Success in the fight against inflation, and the creation of conditions in which the performance of United Kingdom industry can be steadily improved require changes both in the allocation of real resources and in the pattern of financial flows associated with the use of real resources.