§ Mr. Richard Shepherdasked the Chancellor of the Exchequer whether, in the course of costing the policy options open to him prior to the decision to raise the minimum lending rate to 17 per cent., he made any estimate of the effect of the net contribution of the United Kingdom to the European Economic Community budget on the minimum lending rate; and if so, whether he will publish it.
§ Mr. LawsonThe increase in MLR to 17 per cent. was necessary to bring the growth of sterling M3 within the target range. The United Kingdom's contribution to the EEC budget affects, among other things, both past and prospective levels of public expenditure, the PSBR and external transactions, which enter directly into the assessment of the appropriate level of interest rates. No separate assessment has been made of its impact.
§ Mr. Richard Shepherdasked the Chancellor of the Exchequer whether, in his most recent estimate of the future course of inflation and the policy options available to deal with it, he made any estimates of the effect on inflation of the effect of the net contribution of the United Kingdom to the European Economic Community budget, and to the common agricultural policy, respectively; and if so, whether he will publish them.
§ Mr. LawsonOfficial forecasts of inflation and analyses of policies take account, as far as possible, of all relevant factors. It would be extremely difficult, and require a large number of arbitrary assumptions, to isolate the effects referred to by my Lon. Friend.