§ Sir David Priceasked the Chancellor of the Exchequer if he is satisfied that every item which is included in the Treasury's calculation of the public sector borrowing requirement is in fact a genuine borrowing on public sector account in cash terms.
§ Mr. Biffen[pursuant to his reply, 3 December 1980]: Statistics of the PSBR are compiled from data on the transactions which finance it. The great majority of these are straightforward borrowing or repayment. Some of the transactions am borrowing in a broader sense—for example, increases in notes and coin issued, Generally, changes in holdings or liquid assets—for example, local authorities' deposits with banks—are not treated as financing the PSBR but there are exceptions, the most important of which is changes in the official reserves. The PSBR is the borrowing requirement of the whole of the 254W public sector—as defined in the national accounts—and it is measured almost entirely in cash terms, that is to say, in terms of money actually changing hands during the period of account. The exception is accrued interest on national savings instruments; this is treated as being paid out in the central Government current account and as being simultaneously reinvested as an item financing the PSBR.
An article describing the PSBR and now it is measured was published in Economic Trends, August 1980.